RETAILERS THAT HAVE developed more targeted offers for shoppers are finding more creative ways to deliver those offers, especially via electronic media. Shoppers, for example, might receive emails alerting them to special offers, or they might use their loyalty card or fingerprint scan to print out a list of targeted offers at an in-store kiosk.
Other communication vehicles include POS receipts and display monitors, fuel pumps, telemarketing and call centers. A few retailers are offering shoppers access to mobile devices that deliver personalized discounts or ads.
Stores are also making greater use of digital screens in stores to disseminate information, including marketing messages, to shoppers. To make this medium a viable vehicle for CPG marketers, however, requires a way to systematically measure the in-store audience exposed to the message. This year, Nielsen In-Store, a new division of Nielsen Co., New York, is attempting to fill that void.
Nielsen, via the PRISM (Pioneering Research for an In-Store Metric) Consortium that it helped form, began collecting audience data from 160 stores operated by 17 retail chains. It expects to make an industry database, representing standard audience numbers for the participating chains, available in the second quarter of 2008.
While the use of data continues to grow, a parallel trend is for retailers to figure out ways to better integrate the many applications that both employ and generate that data. One strategy emerging this year is to purchase many of the retail software applications from a single provider. Those applications, which form the foundation of the business and IT infrastructure, are known collectively as an enterprise resource planning (ERP) solution.
Companies such as Ahold USA, Brookshire Grocery Co. and Supervalu are making major investments in ERP solutions, which are provided by such vendors as SAP, Oracle, Tomax and Lawson Software.
With its one-vendor approach, an ERP solution immediately solves the integration problem posed by maintaining an assortment of “best-of-breed” systems, which nonetheless remain the more common choice of supermarket retailers. But some retailers that prefer to keep a variety of systems are turning to a new IT concept, service-oriented architecture. SOA not only helps retailers to integrate disparate applications but also to realign their applications to support new business processes.
Giant Eagle, Pittsburgh, is one of the early food retail adopters of SOA, applying SOA technology from Oracle in a number of integration projects.
Keeping data and systems secure continued to be a pressing concern in 2007. In mid-February, Stop & Shop, Quincy, Mass., discovered that PIN-pad terminals at five Rhode Island stores and one Massachusetts store had been tampered with. Moreover, at two of those stores, in Coventry and Cranston, R.I., credit and debit card data were siphoned out of those terminals and used to make fraudulent purchases at other retailers. Arrests were subsequently made in the case.
Meanwhile, retailers had to devote resources to meeting the Payment Card Industry Data Security Standard (PCI DSS) set by the credit card associations to secure consumer data. Under new Visa rules, banks that failed to get level 1 merchants to comply by Sept. 30 — or level 2 merchants to comply by year's end — risked fines of between $5,000 and $25,000 per month per retailer. (Those fines can be passed on to the non-compliant retailer.) Level 1 retailers process more than 6 million card transactions annually, while level 2 retailers process between 1 million and 6 million card transactions per year.