BABY BOOM: FORMULAS FOR SUCCESS

PEGGY BRESNICK KENDLER

Supermarkets across the country have become very adept at drawing parents into stores and encouraging mothers of young children to shop more often and for a longer period of time. Some set aside dedicated space for children to play while parents shop, as others offer customer-loyalty programs through baby and kids' clubs.

The baby aisle represents a tremendous sales opportunity for retailers. According to Information Resources Inc., Chicago, baby products is a healthy category for supermarkets. The market for baby ointments and creams alone totals about $78.5 million for food, drug and mass combined, with supermarket sales accounting for about $29.4 million. Baby foods and snacks pull in much higher numbers, with the total market in this category earning $846.1 million annually; supermarket sales of baby foods and snacks amount to $738.3 million, or about 92.5% of the total.

Helping retailers perfect their baby offerings are companies that design products specifically for in-store childcare centers.

Koala Corp., a Denver-based manufacturer of baby changing stations, also provides family-friendly solutions for businesses, including grocery stores.

The firm has a full program for supermarkets, which includes everything from straps for grocery carts to hold children securely, to dedicated space within stores for watching children while parents shop, according to spokesperson Nate Klatt.

"We have everything from simple activity tables to as sophisticated as the grocery store wants to get," Klatt said. "We also offer soft, modular play equipment similar to that often seen in fast-food restaurants, to our Koala Playsystems, which is a soft foam product that is durable and easily maintained, but soft enough to protect children if they should fall."

The firm targets grocery stores through a combination of direct mail and one-on-one sales interaction. Koala's research has found that parents demand family-friendly facilities and reward those facilities that take care of their children by visiting more often, spending more time in the store and spending more money. "We really push this for grocery stores," Klatt said. "We see this as a competitive trend, one that gives one store a competitive edge over another. Because of that, we see a big opportunity for grocery stores that choose to be family friendly."

One retailer taking advantage of some of Koala's offerings is Minyard Food Stores, Coppell, Texas, an 82-store, family-owned company operating in the Dallas/Fort Worth metropolitan area. Minyard's opened Kid's World areas in two of its new units, one in Plano, in the north end of the Metroplex, and the other in North Richland Hills, in the heart of the Metroplex. It opened one store in the fall of 1999 and the other last month. Both stores have allocated approximately 450 square feet of space to the areas, which are located right at the entrance to the stores.

"We invite parents to leave children from ages 3 to 7, and we provide supervised childcare for up to 60 minutes," said Ron McDearmon, senior vice president.

Within the Kid's World areas, there is a monster truck that kids can climb in, a big screen television for movies, play tables with Legos and different toys, a mock telephone and two Sony PlayStations for older children. When children leave the area, they each receive a gift, which might be a little box of crayons or a small toy.

Each area has at least one supervisor or clerk for each nine children. With more children, the store adds another supervisor or clerk.

Minyard's has implemented security precautions to give parents peace of mind while shopping. For instance, the store requires each parent and child to wear armbands with matching numbers so that parents and their offspring are appropriately matched before leaving the store. Every parent receives a pager while shopping so they can be alerted in case of emergency. In addition, the area has two TV cameras with wide-angle lenses on opposite sides of Kid's World and there are nine 27-inch monitors situated throughout the store so customers can see their children from just about anywhere in the store.

In order to take advantage of the Kid's World area, parents must register their children, providing emergency contact information and a doctor's name. McDearmon said there are currently 614 children registered in a unit that has operated a Kid's World for a year. There are no definite plans to open Kid's World areas in additional stores. Each location is considered individually, based on the neighborhood and the demographics. But for stores where the Kid's World has been implemented, McDearmon has found that for customers who bring their children in, the amount of their purchases is above average. Rosauers, a 17-unit chain headquartered in Spokane, Wash., had a kid's play area in its Coeur D'Alene, Idaho, store for about six months but discontinued it. According to Don Whittaker, grocery merchandiser, it was in a former deli seating area that was underused. "We put in some big plastic toys and slides for pre-school children and had an 18-year-old individual to monitor the area," Whittaker said. "But over time, it became used less and less, so we decided to phase it out."

Rosauers, however, has not phased out its baby aisle-promoting activities. The company participates in the local Baby Fair, held in Spokane on one Sunday each year in the month of March. The Baby Fair includes a number of activities; young children model clothing and there are diaper-changing demonstrations. Each year, the Baby Fair attracts between 5,000 and 7,000 attendees, many of whom are expectant mothers.

Rosauers rents a large enough space to showcase a variety of the different baby products it carries, including everything from diapers to formula to bottles and bibs, pegged toys and baby powder. It is the only supermarket chain represented at the annual event.

"When you really start to think about it, you can go through a grocery store and find all sorts of products that are baby related," said Dennis Voight, merchandiser buyer. "So we have little samplings of items we have in the store, and include floral arrangements and birthday cakes."

For each event, Voight said the store might generate coupons or give away prizes.

A&P has launched a Baby Savings Club program as part of its bonus savings club, so every time a customer shops at an A&P store and uses the bonus card, he or she accumulates dollars. Once a customer has spent $200 on baby-related items -- from diapers, baby shampoo or powder to formula -- he or she receives $20 cash back at the register.

The program originated in the 102 A&P-operated Farmer Jack stores in Detroit, where it has been very successful for several years. The bonus club is in all the A&P supermarkets in the New York Tri-State area, including A&P, Waldbaum's, Food Emporium, Super Fresh and A&P Super Foodmart locations. It was rolled out to New York metro stores this past April, and has been implemented in all of the chain's nearly 400 stores in the Atlantic region. Over the past several months the program has proved effective in increasing sales and encouraging repeat business from those purchasing kid-related items.

There is signage in every store highlighting the program. Bags are emblazoned with "Baby Savings Club," and there are also signs at the end caps.

Food Town Supermarkets, Woodbridge, N.J., is in the process of launching a program called Toddler Town. As part of the program, the chain lowered its retail prices across the board on toddler-related and baby-care specific items, but it is now offering an exclusive currency called S&H Green Points, an electronic relative to the old S&H Green Stamps. According to Bill Donahoe, vice president of merchandising, the chain's basic customer loyalty program gives 10 Green Points per dollar purchased. "With Toddler Town, we give double Green Points," Donahoe explained. "On the purchase of every Toddler Town-related item, we issue double Green Points to the customers so they're able to earn points at twice the normal rate."

The program, just launched this month, was designed to reward the parents of young children. The Green Points customer is typically one trying to stretch his or her budget, Donahoe said. "There are certain specials that we target to our Green Points customers, so what we do is allow those customers to take advantage of special sales," he added.

For instance, the chain recently ran a special for Berio olive oil in the 101-ounce container, which typically sells for $8.99, but by redeeming 1,000 Green Points, a customer could purchase the same family-sized container for $4.99. A customer might be able to get a 12-pack of Coke for 99 cents by redeeming 500 points.

Customers can redeem Green Points for a free quart of Edy's ice cream, Mrs. Smith's Pies, Ocean Spray cranberry sauce and Pepperidge Farm stuffing.

Customers are alerted to the promotion through shelf labels and signage. In addition, Food Town sets aside a block of space in its weekly ads specifically for the Toddler Town program, and it ties in featured baby and toddler products.