Many grocers have watched their share of sales in the diaper category increasingly diminish as discount merchandisers, who typically have more clout with manufacturers, offer significantly lower prices. As a result, some supermarkets are fighting back in the most impactful ways they can, delving into baby club programs, some in-store promotions and even emphasizing the variety of diapers they can offer vs. mass merchants.
Catalina Marketing Corp., St. Petersburg, Fla., a supermarket research and marketing company, recently conducted a diapers analysis program in a group of supermarkets in several different eastern markets. The findings helped determine the most basic benefits of promoting the diaper category in grocery stores.
Before entering into the 26-week test program, Catalina Marketing discovered that, on average, baby category shoppers spent 12.5% more than non-baby shoppers in the stores. However, 28% of heads of households who purchase baby food or formula at the test supermarkets didn't purchase diapers at all during their visits.
To entice consumers to begin purchasing diapers in the participating stores, the grocers developed a few simple promotional strategies, which included dollar-off coupons on any brand of jumbo or mega-pack diapers, as well as bounce-back continuity for shoppers who redeem the first coupons given.
The results were impressive, with an average baby category trip lift of 22.2% for the entire program.
The program also revealed that from February to May, baby category shoppers in several market groups shopped approximately 1.25 times per week. This figure is nearly 1.2 times more often than non-baby category shoppers in the same markets, revealing the potential to squeeze a few more diaper dollars out of these shoppers by creatively promoting the category.
Aside from the supermarkets that participated in the study, other grocers have also noticed the potential to entice shoppers to purchase additional diapers through the use of incentive tactics such as sales promotions, baby clubs and offering a wider variety of sizes and brands. For most, competing on price isn't realistic despite the fact that numerous consumers deem savings as a motivating factor in purchasing diapers. According to "Consumer Navigator" incentive behavior research supplied by Valassis Communications, a consumer behavior research company in Livonia, Mich., more than 32% of disposable diaper buyers are coupon shoppers, nearly 29% are primarily store-discount shoppers and over 43% of the disposable diaper buyers studied admit that they're ultimate deal shoppers, meaning that both coupons and store discounts are influencing factors.
The Penn Traffic Co., Syracuse, N.Y., which owns 216 stores in Ohio, West Virginia, Vermont, New York, Pennsylvania and New Hampshire, recently implemented a baby club program as a means to compete with discount retailers whose diaper prices frequently lure customers away from supermarkets.
"We just instituted our baby club in our Big Bear stores in June and the results have been so good that we're now considering doing a kids club, too," said Marc Jampole, spokesman.
"We use our loyalty card called the Wild Card for the program and for every dollar that shoppers spend on baby products, they automatically get the same amount in baby bucks." When a Big Bear shopper spends $100 on baby items, including diapers, they receive $10 to spend on any item in the store.
According to Jampole, Big Bear's computer systems keep track of each consumer's purchases and automatically registers them for membership into the baby club when the first baby item is purchased. This automatic registry system eliminates the need for each person to sign up for the program and keep track of their purchases or receipts.
Jampole said the stores are also trying to be competitive by offering a greater selection of diaper brands and, more importantly, a number of different sizes than mass merchants.
"A lot of the time, shoppers can only find a few sizes, particularly the larger sizes, at discounters like Wal-Mart and at club stores," he said.
"We try to offer more newborn and smaller sizes along with the more typical larger sizes and keep a wide variety of brands in stock to meet all of our shoppers' tastes."
One inherent benefit that most grocers have over discount retailers is the size of their stores, said Jampole. "There's a growing number of people who don't want the enormous square footage of the supercenters and, therefore, choose to shop at a supermarket. If they're running in to pick up a few quick items, they don't want to have to run all over a gigantic store in search of products; they want the convenience of a smaller, more manageable supermarket and they'll pick up diapers on their way through, too," he said. Location is another issue for some shoppers who don't want to travel to the nearest discount store, which is often situated centrally to accommodate a number of communities. Grocery stores, on the other hand, seem to dot the landscape much closer together and, consequently, are frequently closer to more consumers than mass merchants, he added.
While some grocers are finding unique ways to compete for every last penny, others like Highland Park Markets in Glastonbury, Conn., assume more of a laid-back position.
"I don't know that many of our customers come here specifically to purchase diapers," said Tim Cummiskey, grocery manager for Highland Park.
"They usually pick up diapers if they're already here buying groceries, most often when they're running in at the last minute for dinner items and a pack of diapers for the baby at home."
Cummiskey said Highland Park typically carries the most popular brands like Pampers and Huggies, but they have more of the larger sizes as they are the biggest sellers.
Fresh Encounter Inc., Findlay, Ohio, also opts not to get involved in competing with discounters on price, but concentrates some effort on the category in other ways, said Eric Anderson, senior vice president of marketing.
"We don't currently have a baby club, but we do focus on new mothers by sending every new mother a parenting book with coupons for formula, diapers, wipes and other baby items," he said. "We certainly offer all sizes of diapers, but we may not carry every [stockkeeping units] of a particular brand."
With only 30 stores, Anderson said Fresh Encounter is just too small to try to compete with such giants as Wal-Mart and club stores like Costco.
"Our size and format doesn't allow for us to carry all SKUs of diapers, and we generally don't promote our diaper category due to the tremendous pricing pressure from the larger box retailers, he told SN.
Sterk's Super Foods, the nine-store grocery chain in Hammond, Ind., isn't doing much in the way of baby clubs, but store manager Kevin Copper said it does promote diapers through in-store circulars and frequently lower prices for consumers seeking worthwhile discounts.
"We haven't created a baby club at this point, but it's something that we might eventually do to bring in more shoppers," said Copper. "For now, we mostly focus on promoting diapers in ads so our regular shoppers will be encouraged to buy those as well as food items."
As far as variety, Copper says Sterk's carries a very extensive array of brands, including those by big-name CPG manufacturers like Kimberly-Clark. However, because Sterk's primary markets typically cater to quite a few penny-pinching shoppers, the stores also stock shelves with less expensive, economy brands. And for each brand, the retailer attempts to carry as many different sizes in order to meet every consumer's individual needs. "We always carry everything from newborn to training diapers in both the major brands and the less expensive brands," he said.