Card Data Seen Boosting ROI on Circulars

CHRISTINE BLANK

MIAMI — Tying loyalty card data into weekly circulars and promoting Hispanic events are two ways to boost the effectiveness of circulars, retail advertising professionals said at Food Marketing Institute's Advertising/Marketing Executive Conference here last month.

Only about half of supermarkets with loyalty card programs are leveraging their data to customize circulars and other promotions, said Therese Mulvey, vice president of marketing intelligence for supermarket direct-mail company Advo Inc., Windsor, Conn., which was recently acquired by Valassis Communications.

A higher number of supermarket operators — 69% — leverage their data from loyalty cards in direct-mail programs, Advo found in its recent survey of 80 grocery chains.

“We need to reach specific customers, and lots of them. Mine your data for increased profits and optimize your media to get more sales for the same or less spend,” Mulvey said.

Many grocers are cutting back on circular page counts, Advo found. While 92% of supermarkets surveyed distribute weekly circulars, only 2.2% are publishing circulars that are 16 pages or more.

DOLLAR REALLOCATIONS

But page counts are not declining in recent years because of cost-cutting measures. Rather, some grocers are reallocating ad dollars to direct-mail programs, Mulvey said. In that case, grocery chains should be tying circular and direct-mail promotions together, and basing the promotions on frequent-shopper data, she added.

Some supermarket chains are taking full advantage of information on their most frequent shoppers. Kroger, Cincinnati, for example, is seeking to increase the payoff of its weekly circulars by running promotions tailored to shoppers in those regions, according to one advertising agency executive.

“Kroger has some very robust analytics with their loyalty card marketing, and we can see how their analytics play into their weekly circular,” said Jeff Morris, president of HEILBrice Retail Advertising, Newport Beach, Calif.

After looking at the items their frequent shoppers buy in each region in one division, Kroger sends a different version of the weekly circular to each region, Morris said.

THE HISPANIC SHOPPER

Other grocery chains are differentiating themselves in their markets by conducting relevant Hispanic promotions and corresponding circulars.

“Understand what to communicate [to Latino shoppers]. They shop with great frequency, and they buy a high percentage of perishables,” said George Ferris, partner of FKQ Advertising & Marketing, Clearwater, Fla. “They're not so much hung up on health and wellness as where the product comes from and how fresh it is.”

Know the calendar for Hispanic events and celebrations, too, Ferris said. For example, Mother's Day in Mexico is celebrated on a different day than it is in the U.S. In addition, grocers should recognize that religion, particularly Catholicism, is important to many Hispanics, and tie religious events into product selection and promotions.

While grocers with small budgets often worry about how much advertising they can run, they can be just as effective as companies with big ad budgets, said Amy Hunt, group creative director for Mullen Advertising, Wenham, Mass.

“Small budgets are terrific. We're living in a time where the standards of what we're used to seeing are different: We watch reality TV, we watch YouTube, and there are citizen blogs,” Hunt said. Small grocers can compete against larger chains effectively, they just have to be more “inventive” in how they use their ad dollars, Hunt added.

Still, supermarkets that run consistent messages across advertising media will be most successful, the panelists said. “Have consistency through all of those platforms — if not in your message, at least the tone and voice of it. Every chance you get, make sure your core branding is there throughout every piece you do,” Morris said.

And promotions should be evaluated to determine return on investment and how they resonated with shoppers.

Pathmark, for example, uses online consumer panels to get feedback on various promotions, Morris said.

Marketing and advertising executives can demonstrate ROI to management by projecting sales on items featured on the front page of the weekly circular, Ferris suggested. Then, tie the featured products into other advertising that week, and measure product sales at the end of the week, he added.