CANDY INDUSTRY URGED TO PROMOTE ONLINE

NANCY BRUMBACK

CHICAGO (FNS) -- Online promotions can reduce costs, extend the reach of traditional promotions and help target customers in the store, according to Robert Rubin, research director for Forrester Research, Cambridge, Mass.

Speaking at last month's fifth annual All Candy Expo here, Rubin outlined the results of a Forrester consumer survey on the use of online and offline promotions and how those results can be used by candy manufacturers and retailers.

The survey, completed in January, involved 5,870 members of Information Resources' Shopper's Hotline panel.

Only 8% are currently defined as "heavy online promotion users," those who actively search the Internet for promotional offers.

But over half, 56%, are light online promotion users and do respond to online promotions when they are offered. Of the respondents, 40% do not use online promotions at all.

The heavy online promotion users tend to be younger and less affluent than the general population, but use the Internet more frequently, Rubin said. They are also heavy users of offline promotions, clipping coupons, seeking free samples and using mail-in rebates.

The Forrester survey identified many opportunities for online promotions based on the activities of light as well as heavy online users. Sixty percent had visited a site with recipes and 20% had downloaded recipes. Over half, 52%, have used the Internet to obtain health-related information, 31% had downloaded coupons, 42% had registered for sweepstakes, 31% had read articles about cooking and 28% had requested samples of products online.

The survey also showed shoppers want promotions via e-mail. "We were shocked," Rubin confessed.

In the survey, 70% said they would like to receive coupons by e-mail, 45% would like recipe ideas and 38% would like to hear about new products.

In suggesting ways candy manufacturers can use the Internet for promotions, Rubin warned against stand-alone Internet promotions. "Integrate online promotions to make offline promotions better," he advised.

As an example, he suggested a Web address "for additional savings" be included with FSI coupon promotions. Consumers who then visit the site can receive additional coupons and, at the same time, will usually provide their e-mail address and other information for future promotions.

And, he added, by having consumers fill in information online, companies reduce their costs of transferring that information to computers when it is submitted on coupons or sweepstakes promotions.

"It costs only pennies to remarket to e-mail addresses," he noted, and those promotions can be expanded to a company's other brands.

Since candy falls into the category of products that are purchased frequently but have relatively low brand loyalty, Rubin suggested candy companies move such promotions as contests and sweepstakes online to reduce their variable costs.

As an example, he cited a current promotion Hershey's is running with the new "Atlantis" movie for a beach towel. Online, Hershey's is offering a form to print out, fill out and mail in.

"They could have had the customer fill out that form online, saved money and had the e-mail list for remarketing," Rubin said.

Candy companies can also target online customers at the virtual checkstand, just as in physical stores, by striking deals with online retailers to have candy promotions available at "checkout," he suggested.

And candy companies should also develop ways to help brick-and-mortar retailers promote more effectively online.

In contrast, candy companies should avoid any expensive online content that tries to get users to stay on the site for extended periods of time, Rubin said. The candystand.com site, with its array of games, took years to develop and would be difficult to copy, he noted.

Avoid promotional portals such as freesamples.com as well, he urged.

"Offer free samples on your site," not someone else's, he recommended. Consumers looking for samples on promotional portals are not worth the effort, he added.

Rubin also recommended asking consumers only for the minimum amount of data possible. "Capture consumer data carefully and with purpose.

"Hire an online consumer experience expert," he suggested, to avoid creating a bad online experience for the customer.

And, centralize all your brands' e-mail activities to avoid flooding consumers' e-mail boxes once you have their addresses, he said.

Ultimately, manufacturers may be able to work with retailers to target promotions to consumers in the store based on past purchase history and online activity, and even use store promotions to manage inventory.

"The lifetime value of the consumer becomes important, and the Internet will make that easier," Rubin said.