A FIRST STEP

Stephanie Fagnani

Despite the lower prices and larger packs of products for babies that other channels of trade can offer consumers, the one-stop-shop positioning of the traditional supermarket continues to give birth to new promotional possibilities.

And, while new parents of today's world face far different challenges than those of yesteryear, supermarkets are in a good position to appeal to these shoppers, not only through their convenient location, but also through the level of trust they can infuse into consumers, industry sources told SN.

"[Supermarkets] have a potential advantage in terms of trust. If a supermarket can become my solution center for my baby and my family, then there is clearly an opportunity to capture a broader definition of baby care," Alison Chaltas, vice president at marketing and consulting firm Euro RSCG Meridian, Westport, Conn., told SN.

Knowing what really makes this consumer tick is half the battle, she said.

"The very first question that I would ask myself if I were a supermarket retailer is, 'Is there such a thing as the 'baby consumer?' Supermarkets really need to think about the different types of consumers and their different in-store and before-the-store shopping mentalities," Chaltas said, noting the varying needs of first-time vs. second-time parents and families with a stay-at-home mom vs. dual-career households.

Although alternate channels like mass merchandisers and even stores like Toys R Us are capturing sales on loss-leader categories like diapers, statistics from Information Resources Inc., Chicago, show that shoppers are still buying most of their baby food in the supermarket channel. For the 52 weeks ended Dec. 1, 2002, total sales of baby food/juice in the food, drug and mass channels, excluding Wal-Mart, were $877 million.

Of that total, $826 million was generated by the food channel.

To that end, supermarkets have not given up the battle for the baby shopper, and many industry players told SN they recognize the importance in keeping this consumer in their stores.

"Families with young children are extremely desirable customers. Not only do they make regular expenditures on baby-related items, but they shop for the rest of the household as well," said Gregory Grudzinski, director of marketing communications at Bozzuto's, a Chesire, Conn.-based wholesaler serving chains and independent supermarkets throughout New England, New York, New Jersey and Pennsylvania.

In Grudzinski's opinion, supermarkets should strive to take advantage of the high traffic they experience by maintaining commodity margins on staple items, like diapers, and aggressively merchandising the aisle to drive sales of other higher-margin items like supplies, toys and health and beauty care products.

Many of Bozzuto's retailers run baby category promotions two or three times a month and report a great deal of success from staging contests and events like diaper bag giveaways and diaper derbies, he said.

Several other supermarkets rely heavily on baby clubs as the marketing force for the baby aisle. For example, Publix, Lakeland, Fla., introduced a Baby Club in 1996 for new and first-time parents of children up to age two. Based on its success, the company launched a Preschool Pals program last fall that targets children ages two through four and their parents, as previously reported in SN. Some of the features of the program include coupons and a quarterly newsletter for the parents, while the children receive birthday cards, activity books and CD-ROMs.

Likewise, Winn-Dixie, Jacksonville, Fla., also recently rolled out a Baby Rewards Club. Loyalty card members earn points for every dollar spent on baby care products; an instant coupon for $10 is awarded at checkout for every 200 points earned. Other perks of this club include a birthday cake when the child turns one and the chance for the parents to win a camcorder.

Super Fresh Foods, an A&P banner serving the Philadelphia area, has been involved in the baby club business since the spring of 2000, according to Patti Councill, spokeswoman for A&P, Montvale, N.J. Its Baby Bonus Savings Club gives $20 in cash back to consumers after they've spent $200 on baby items from shampoo to food to diapers to baby wipes.

"Our goal is the one-stop shopping; it's really the advantage that we have as a supermarket," Councill said. "We feature everyday-low prices, and the strategy is to be competitively priced with all other outlets that sell baby products," she added.

Again, playing up its location and the level of comfort consumers have for the stores is key for the supermarket channel.

"I think for those retailers who haven't really made it [baby aisle] a destination and a convenience for the customers, they're probably missing the boat," said Dan Mazur, senior vice president of Center Store program management at cooperative Topco Associates, Skokie, Ill., which services 54 member owners in the retail and wholesale channels.

"It's a very important segment of Center Store. If you can grow that business with [consumers that have infants], it certainly will reap benefits for you in the future."

To that end, Topco supplies its members with a private-label line that goes beyond diapers to include categories like training pants, infant formula, baby wipes and health and beauty care products such as powder, lotions, oil, shampoos, suppositories, aspirin and bottle liners, to name a few. Most recently, the company developed a line of infant formula that is being sold under the Top Care label.

"That's been an important category from the standpoint that it goes beyond competitive -- it's often a very low-margin business with the brands and often another loss-leader category. So private label can really help increase the profitability of that area," Mazur said.

And while the company has not committed to anything yet, Mazur told SN it is considering getting into the baby food arena again due to trends in the natural and organics segments, which could mesh well with Topco's Full Circle line of natural and organic products.

"We're thinking it quite possibly could be a brand that we could use to market baby food," he said.

Topco was in the baby food program years ago under the Food Club brand but it was at a more competitive time when "the three major guys were fighting tooth and nail for market share. I think things have settled down a little bit in that area. There can be a lot more done from a corporate-brand point of view, and we're really excited about investigating the baby food thing again," Mazur said.

As consumers become more comfortable with private-label offerings in these types of baby categories, retailers gain even more ground in keeping the shopping dollars in their stores, said Chaltas. But, again, there are additional factors to keep in mind.

"First-time parents don't buy private label; it's the second time around. The first-time parent needs education, trust and solutions; the second- or third-time parent needs speed, reward, peace of mind and cheap," she said.

Supermarkets can fulfill all of these demands and win over consumers by doing something creative with the information they cull through their shopper cards, suggested Chaltas, the working mother of a 2-year-old and a newborn. Winning over time-starved parents could be as simple as providing these shoppers with a free home delivery or an emergency number to call when they are out of diapers and the baby is sleeping, preventing them from leaving the house.

Or, as was her own personal experience, carrying groceries to the car of a parent struggling with a car seat.

"I know personally that I am committed to one supermarket, Shop Rite, because of the incredible service I get when my young children are with me."