There's been a lot of progress in electronic marketing over the years. But there's a lot of important work to be done for more progress to take place. First of all, these in-store promotion programs will not reach their full potential until makers of packaged goods get more involved in the design of the systems and the analysis of the captured shopper data. Not enough of this activity goes on today. At the same time, marketers are reluctant to commit brand dollars to electronic marketing until more of these programs are in place. Unfortunately, system developers and retailers haven't enlisted manufacturers as partners. Some clearly want to be involved. Good ideas are hard to suppress, however, and electronic marketing in the form of frequent shopper and other programs is moving forward. But before explaining why, let's examine the roadblocks on this stretch of the information superhighway. Manufacturer funding is obviously critical to success. But because these systems are still relatively new and unproven, manufacturers have been supporting them modestly. The goal is to get them to switch brand dollars from consumer promotion and advertising budgets over to in-store electronic promotions. This will happen only when a critical mass of retailers offers these electronic systems. These numbers aren't readily available, but it's believed that we're closer than ever before to this critical mass, generally accepted to be 40% of retailers.
But there are bumps on the highway. Electronic marketing expert Glenn Griffiths of McNeil Consumer Products Co. says, "One reason electronic marketing programs fall short of my needs is they have largely focused on retailer needs with some assumptions about what manufacturers want."
Griffiths says these needs are different, but not necessarily conflicting. He sees retailers' needs focused on the "macro level" -- sales at the category, department and store level. Manufacturers' needs are focused on the "micro level" -- growing individual brands.
Partnering at the design stage might yield a better electronic marketing program. That may be just what's needed to propel it to the next level. Partnering at the other end -- analyzing point-of-sale data -- would also be a boost. Some of this is happening already, but much more is needed. Because they view the growth of alternate formats with an appropriate degree of alarm, clear-thinking food retailers are investing in various frequent shopper programs. They aim to maintain the loyalty of a store's best customers -- those buying the most groceries on a regular basis. All the issues surrounding electronic marketing and an idea where this exciting business is headed will be the subject of a special conference next month in Tarpon Springs, Fla. Attendance will almost certainly lead to astonishing business success and the accumulation of incredible wealth. (See Page 11 for details.)