QUINCY, Mass. -- Little is known about supermarket shoppers who go online to view stores' weekly specials and how numerous they are, but more and more retailers believe they need a Web-based circular to compete.
Ahold USA's Stop & Shop here launched an online ad in July, while sister banner Giant of Landover, Md., Albertsons and other retailers upgraded their online circulars.
Peg Merzbacher, Ahold marketing director with responsibility for Giant and Stop & Shop, said Stop & Shop was at a competitive disadvantage by not having a circular. Shoppers could get a list of personalized weekly promotions from the retailer based on their shopping history, but in surveys, they asked for the full online flier, she said. "It was very clear from our customers that they wanted that," she said.
Another retailer, Penn Traffic, late last year rolled out online fliers to its BiLo Foods, P&C Food & Pharmacy and Quality Markets Food & Pharmacy banners using a service powered by Palm Harbor, Fla.-based Webstop.com.
"Customers use the Internet more than they used to," said Marc Jampole, spokesman for the Syracuse, N.Y.-based chain. "We wanted to be there. It's in response to a customer need."
An online ad can be a means to another end. It gives the retailer a way to lure people to its Web site, which can be used to try to sell them other products and services, Merzbacher said.
Ahold also foresees expense savings. After putting its circular online, Stop & Shop planned to stop the costly practice of mailing its printed ad to people who live outside the banner's insert distribution area but request the ad, she said.
Six years ago, it was hard to talk a retailer into putting its ads online, said Robert Hemphill, Webstop's president. "Today, every retailer that has one is looking to upgrade it. ... They're all struggling to do something better."
Hemphill recalled one big retailer in the East that six months ago had no interest in putting its sales data online. As an everyday-low-price retailer, it put little effort into the weekly print ad anyway. Recently, Hemphill said, the retailer told him, "We're really thinking about it, because competition is out there."
Hemphill, whose clients also include Ball's Food Stores in Kansas City, Kan., and Price Chopper in Schenectady, N.Y., said retailers that already have online circulars are interested in upgrading and adding features such as recipes, targeted coupons based on purchase history and e-mailed circulars to shoppers who sign up. Hemphill sees great potential for such an opt-in service, saying, "You've got a database other retailers would die for."
Extra features are important to Ahold, too. The Giant and Stop & Shop circulars, powered by Chicago-based software provider Shoplocal.com, let users create their own shopping lists from sale items, and the retailer is interested in broadening that feature to let them create a list from all items in the store, Merzbacher said.
Bert Hambleton, president of Hambleton Resources, Issaquah, Wash., and a longtime observer of circulars, said retailers are putting ads online out of a sense of duty, not because shoppers demand them, he said. His research has shown that fewer than 3% of shoppers use the online ad, compared with 20% who rely heavily on the printed version. Perhaps that's because the online ad experience doesn't replicate that of the print ad, he said. "There's a tactile sense you just can't replicate with the computer."
Hambleton said he has a couple of retailer clients, which he wouldn't name, that felt their online usership was too low to justify putting their weekly ad online. Instead, they decided to use their Web sites to post basic store information for shoppers and employee testimonials to attract prospective associates.
Tracking the audience size is "a very difficult thing to study," conceded Patrick Flanagan, senior director of client services for Shoplocal. Shoplocal.com visitor tracking has shown, however, that the more interactive the circular, the longer people spend viewing it, he said.
Hemphill said he thinks online circulars could reach as much as 15% of a retailer's customer base, depending on the retailer. A common comment he hears from retailers is, "Heck, we don't know how many people read our print ad. Why would we compare?"
Merzbacher allowed that Ahold considered putting the circular online a cost of doing business, and allowed that navigational enhancements are less important to consumers than price and item information. "I think," she said, "it's more what's in the circular."