RETAILERS URGED TO EMBRACE RELATIONSHIP MARKETING

Elliot Zwiebach

SAN FRANCISCO -- Retailers need to think about new ways to establish stronger personal relationships with consumers, according to several speakers at the Food Marketing Institute Advertising and Marketing Executives Conference here this month.

Given the fragmentation of television viewing and the clutter of commercial messages, it's a necessity for retailers as well as manufacturers to find new ways of communicating, said J.P. Beauchamp, vice president, testing and analytic media services, Information Resources Inc., Chicago. "Consumers are not standing still, and it's our responsibility as marketers to embrace technology that shakes up the status quo" by exploring new media to replace the mass media.

Alan Chapman, principal at Wilson Chapman Re, Leawood, Kan., urged retailers to use their Web sites as a marketing tool, "even though Internet shopping represents only 0.4% of the $570 billion grocery business" because a growing number of consumers -- including higher-income, better-educated women -- spend a lot of time online.

"The days of mass merchandising are over," he noted, "so you need more of a targeted approach, and the information you have on customers is the most valuable information you've got if you use it.

"These are consumers who don't read a whole grocery ad but want to know which of the items they buy that are on sale, to receive merchandising suggestions on products they like and have access to information they want," Chapman said. "Their attitude is, 'Give me what I want, not what you want to give me.' If you understand who your customers are and build relationships with them on their terms, you can sell them more."

Frank Chessman, president of Maxxim Marketing, Corona, Calif., said retailers "need to put the 'wow' back in their promotions" to draw customers to their stores and build sales. "But the industry has gotten away from relationship marketing because everyone is in too much of a hurry to get customers out of the store. Rather than being operationally driven, we need to be more market-driven and offer bold promotions that drive customer counts to drive sales. High-impact promotions create frenetic energy and make consumers feel like they're part of something special."

Among his suggestions were continuity games, "which are among the most effective short-term devices to drive sales and which are gaining favor as companies and brands seek to achieve a more personal connection," he said; initiatives aimed at kids "to leverage their parents into the store -- a huge missed opportunity -- because the pester factor can be a powerful weapon for marketers," he noted; gifts with purchases; and club card promotions, such as Winn-Dixie Stores' giveaway of free tickets, plush toys and books in connection with the movie "Because of Winn-Dixie."

Direct-mail programs can also affect purchasing decisions and drive sales, Therese Mulvey, vice president, marketing research, for Baltimore-based Vertis, said, as evidenced by the sales increases that followed psychographic studies she said her company conducted to determine how to influence different groups of consumers using different types of pitches.

Todd Maute, vice president, marketing, Daymon Worldwide, a private-label marketing company based in Stamford, Conn., said supermarket operators should use private label as a sales tool. "It's the best-selling brand in your store across all categories and all segments, but most retailers don't treat it that way," he said. "Treat it as the No. 1-selling brand in the store, not simply as a margin enhancer or a price line."

Rather than using private label as a me-too item that mimics national brands, retailers ought to focus on the exclusivity of the private-label franchise, Maute said. "Consumers create brands based on their perceptions, and trust comes from meeting or beating consumers' expectations.

"There's a direct correlation between consumer loyalty to your private label and loyalty to your store once consumers realize that's the only place they can get that product," he pointed out.

Donna Rando, vice president, market development, for POSnet Services, Jackson, N.J., urged retailers to consider paperless Internet offers, in which they team up with manufacturers to offer reduced prices to consumers on retailer Web sites. She cited the increased sales results following a test by one retailer in New York, in which consumers who entered their frequent shopper card numbers -- or consumers who signed up for the cards on the Web site -- automatically qualified for discounts on specific items on their next shopping trip.

Rando also said retailers could work with vendors to offer free samples through their Web sites or to develop personalized electronic circulars to deliver a list of weekly specials based on regularly purchased items.