Walgreens, Hershey's Team Up for Pilot

JULIE GALLAGHER

DEERFIELD, Ill. — Walgreens here will engage in a shopper marketing pilot with The Hershey Co., SN has learned.

The test will run in two markets during the third quarter with the goal of driving trips and incremental purchases within a key shopper segment.

The pilot will leverage out- of-store touch points as well as in-store communication and merchandising strategies, said Phillip Stanley, vice president of customer marketing at Hershey's.

“We plan on conducting consumer interviews to determine how effective the program is at connecting with this shopper segment,” he said.

The pilot is one of several to be conducted by members of the Retail Commission on Shopper Marketing. Established by the In-Store Marketing Institute and consulting firm The Partnering Group, the RCSM was formed last year to develop a new model of effective collaboration for manufacturers and retailers.

The RCSM comprises merchandising and marketing executives from Food Lion, Giant Eagle, Marsh Supermarkets, ShopRite, Meijer, Schnuck Markets, Supervalu, Walgreens, Wal-Mart and Wegmans, and strategic advisors from Campbell Soup Co., Clorox Co., Hershey's, Hewlett-Packard, Kellogg Co., Kimberly-Clark, Johnson & Johnson, Sara Lee, Chiquita, Mars Advertising, Arc Worldwide and TPN. The Coca-Cola Co. is the lead sponsor of the effort. Strategic advisors have also provided financial support.

“The goal of the commission is to help retailers understand the shopper marketing movement so they can leverage it to their own objectives, and in so doing, help manufacturers find a more receptive audience,” said Peter Hoyt, executive director of the In-Store Marketing Institute.

The RCSM defines shopper marketing as the use of insight-driven marketing and merchandising initiatives to satisfy the needs of targeted shoppers, enhance the shopping experience and optimize business results for retailers and manufacturers.

While CPG manufacturers have been eager to leverage the discipline, supermarkets — for one reason or another — have not been as receptive, Hoyt said.

“There is an awful lot of energy being generated by manufacturers around shopper marketing where they are gleaning insights and bringing them to retailers, but there hasn't been, in most organizations, a person in charge of vetting all of those proposals,” noted Hoyt. “At the same time, retailers have priorities of their own. They'd like to make sure that the shopping experience in their store is unique and identifiable and fits within their own image.”

The RCSM has been working to establish a new industry standard for guiding the shopper marketing collaborative process.

Since last April, RCSM members have been meeting to shape a white paper on shopper marketing best practices that will serve as a blueprint for the industry.

The model will be presented at the In-Store Marketing Summit on April 21 during a four-hour session titled “A Framework for Next-Generation Shopper Marketing: Findings from the Retail Commission on Shopper Marketing.” The summit will be held at the Hyatt Lodge at McDonald's Hamburger University, Oak Brook, Ill.

Pilot results will be incorporated in a final report on the new, collaborative shopper marketing process model, due for release after the tests conclude this summer.

“The ultimate goal of the final Retail Commission on Shopper Marketing report is to increase business together while gaining a better understanding of our customers' needs,” Catherine Lindner, vice president of retail marketing for Walgreens, told SN.

The RCSM pilots will focus on refining the “platform development” and “program development” phases of the shopper marketing process. The Partnering Group, under the direction of its chief executive officer, Brian Harris, will “work backwards” throughout the pilots to document key strategic framework elements, according to the In-Store Marketing Institute.

“Through this pilot program we hope to gain great information and insights about how to drive change in shopper behavior,” said Lindner. “Shopper marketing is the next wave of growth marketing and makes good use of marketing dollars.”

Walgreens chose to team up with Hershey's in particular since it has successfully collaborated with the company in the past.

Lindner is hopeful the pilot will produce actionable steps for better collaboration.

“A number of retailers and manufacturers are looking for ways to better understand how to partner,” she said.