PLEASANTON, Calif. — As it worked to achieve price parity with its conventional competitors last year, Safeway launched a simultaneous marketing campaign to boost foot traffic at its stores — a campaign Safeway calls “Promise.”
Speaking at the chain's annual investor conference here, Steve Burd, chairman, president and chief executive officer, said the campaign initially resulted in “dramatic volume changes” in a relatively short time at four of its nine U.S. divisions, while results at three others were a little less positive, and two didn't show a positive response at all.
However, he acknowledged that the changes Safeway is seeking in price perception among consumers “are going to take several years.”
“Looking into the first quarter, you can see that we continue to build momentum, except at one division, and there are other things going on in that geography to explain that. So you've got eight of nine U.S. divisions showing a pretty measurable response, and as you move through time and as perception improves and people come into the stores more often, you should see more of this positive movement.”
Mike Minasi, president of marketing, said Safeway had three goals in developing the Promise campaign: To build awareness of the chain's lower prices as quickly as possible while making sure consumers understood that the quality of perishables and store service were not going to change; to stimulate traffic; and to improve the company's perception as a chain that offers value.
Accordingly, Safeway boosted media spending by 50% to 75% over normal levels “to move the needle quickly, not over an extended period of time,” Minasi explained — in an effort to communicate a consistent, dedicated message.
Safeway began the marketing campaign in July on a rolling basis that lasted through the end of 2009, integrating seasonal messages at key times, with plans to refresh the message on an ongoing basis, Minasi said.
In the stores, Safeway used yellow shelf tags to highlight the lower prices and to serve as the centerpiece of the campaign. The tags show the old price at the top, which is crossed out, with the new lower price printed below — “not necessarily the most distinctive approach but very clear, simple and straight-forward,” Minasi explained.
Print ads showed pictures of the tags, with some explanatory information underneath dedicated to the Promise messaging, he said. TV ads showed the tags and discussed the Promise message as part of the chain's ongoing “Ingredients for Life” campaign, and radio ads used the tagline, “Fill your cart without emptying your wallet.”
The company also made division presidents available to local news media, “and that made us much more credible [with] that kind of a commitment behind the messaging,” Minasi said.
Safeway surveys indicated that, two weeks into each campaign, awareness of the Promise message ranged from 74% to 93% of customers, he pointed out.
