CHECKOUT 1996-04-01

JOHN KAROLEFSKI

As soon as we get used to the idea that mass marketing is out and micromarketing is in, we still find ourselves trying to catch up with the future. The latest and greatest change, of course, is brand marketing on-line. There's certainly a lot of hype nowadays, and several Web sites from retailers and brand marketers already exist. Nobody knows when or if this activity will ever reach critical mass to become a major channel of distribution for packaged goods. It's only the beginning of what could lead to a customized interactive virtual supermarket. For the sake of argument, let's say access to the Internet someday becomes as pervasive as cable television. Consumers would check out the Web site of an automaker if they were looking to buy a car. They would go to the site of a hotel chain or airline to plan a vacation and make reservations. Would consumers surf over to, say, a Procter & Gamble site to check out new products? Not likely. But time-pressed consumers would go to the Web site of the local supermarket for grocery shopping and home delivery. So it's clear that the marketing of branded packaged goods on-line would be through the food, drug and mass trades. The most obvious promotional activities are sweepstakes and coupons redeemable only through the local supermarket. Various comarketing programs are possible with brand marketers taking advantage of links on their trading partner's site. Of course, retail sites could also offer advertising. A critical mass of on-line grocery shopping could have wide-ranging implications for the physical supermarket, too. First of all, there wouldn't have to be so many stores because home delivery could be handled through a warehouse. With less shopping in the physical store, point-of-purchase displays and electronic marketing would be reduced in importance. There could be fewer premium products on the shelf because only less affluent shoppers would be in the stores. The dual-income, time-pressed consumers would be on-line. All these possibilities have not escaped the attention of Steven Reinemund, top executive of Frito-Lay. What do you think he talked about in his keynote address at last month's snack food convention? Baked Lays, his mega-new product? No, he talked about the "virtual supermarket." The full story begins on Page 1.

John Karolefski is editor of Brand Marketing.