EDUCATIONAL LINE TO SHOW AND TELL AT FMI

JOEL ELSON

CLEVELAND -- Learning Horizons, supplied and marketed by American Greetings here, will debut this week at the annual Food Marketing Institute Convention in Chicago after extensive testing at three regional Northeast grocery chains.

The chains -- Star Market Co., Cambridge, Mass.; Hannaford Bros., Scarborough, Maine; and Wegmans Food Markets, Rochester, N.Y. -- began testing the 330-item set of educational-enhancement products last year, according to industry sources. Tests were run in a total of 16 stores among the three retailers. Displays went up near the book department, toy sections or in the cereal or seasonal aisle.

The line, which can be considered a new general merchandise category for grocery chains, is designed for parents to help their children learn skills.

"The premise is that parents have to go out of their way to find products for their children's educational enhancement. So we've put together a line that is a one-stop shopping experience for parents who are interested in helping a child who may be having difficulty in school, or is bored or wants something enriching," said Mark Schantz, executive director of Learning Horizons.

When contacted by SN, the supermarkets where products are being tested had no official comment on the tests or on the product line, which is geared to tap into the $630 million home-education market.

American Greetings also has tested the concept in more than 80 stores, which include mass merchandisers, drug and toy retailers, as well as at its own specialty card shops.

According to Schantz, the line has been packaged to make four statements in the home-education category.

The 20- to 24-foot shelf schematic is made up of workbooks and hands-on learning, science and early learning products. These sections cover science as well as math, language and social studies.

Targeted at children ages 3 to 6 or those in preschool to sixth grade, the product mix includes workbooks, audiocassettes, puzzles, science and math kits, stickers, flash cards and posters. The line is priced from $1.79 for stickers up to $19.95 for science kits. Price points average about $4, with many workbooks priced from $2.25 to $3.50.

The assortment, which delivers 40% profit margins, addresses a field now mostly controlled by retailers of educational supplies, mail-order catalogs and specialty stores, said Schantz.

"It's hard to find a complete offering of these types of products in most retail stores where parents routinely shop. Until now such educational-content products would be found in a teachers' supply outlet or a toy store, but certainly not a mass channel," explained Schantz.

Products are merchandised in color-coded packaging so grocery-store shoppers can quickly find appropriate products at skill levels for their children. A parent seeking a workbook or hands-on tools to reinforce a child's third-grade math skills, for example, can quickly eye the math section and skill level.

The line also should appeal to the 1.7 million public elementary teachers and hundreds of thousands of preschool day care providers across the nation, according to the manufacturer.

"It's a good idea and a natural for a supermarket based on the perfect demographics of families and mothers and children in the store. With the big interest in education today, this is obviously a perfect combination," commented a Star Market official, who asked to remain anonymous. For Star Market, home-learning items have been "a viable entity. They're doing OK, although we're on a learning curve. We're trying to figure out what items sell the best and are the most productive in the display space,"added the official.

During the fourth-quarter holiday shopping period, the line experienced strong turns at the test locations, said a local observer.

Sales in mid-October actually spiked higher after report cards were issued and parent-teacher conferences began, said sources. Best sellers have been laminated wipe-off products, basic skills workbooks and early learning hands-on items like a jumbo peg board, sources reported.

The three grocery chains sparked teacher interest at the beginning of the test period with a direct-mail campaign that the card supplier sponsored to introduce the line. Coupons with the stores' names as well as product samples were sent to teachers at area-wide schools.

Before embarking on the education line, American Greetings conducted market studies "that showed the educational products market to be a tremendous untapped opportunity for retailers," said Schantz, who is a former teacher.

The research also showed that more parents are now taking an active role in helping their children learn, he added.

"While teachers traditionally have purchased most of these products, that's shifting, and a substantial amount are now bought by parents and grandparents," Schantz said.

Everyday sales opportunities include basic skills as well as enrichment products, whether additional home study is recommended by a teacher, or the family simply chooses to provide extra learning opportunities with at-home projects, the manufacturer said.

Interest by parents in helping children with their schoolwork has never been higher, especially with the emphasis states are putting on competency in schools, Schantz added.

"Kids have to pass fourth- to ninth-grade competency tests in more states, and parents are asking themselves, 'how do I help my child?' " he said.

The card manufacturer is developing a smaller 12-foot planogram more suited to a supermarket format. It will be in addition to a 20- to 24-foot shelf schematic for larger combination stores. Display fixtures vary from 60-inch to 84-inch tall profiles.

According to Erwin Weiss, American Greetings senior vice president for consumer products, the Learning Horizon product assortment dovetails nicely with President Clinton's identification of education as the nation's top priority.

"We know that parents of all income levels seek tools to enrich their children's educational progress, and Learning Horizons products met this growing consumer demand," added Weiss.

American Greetings created a national advisory board of educators, parents, curriculum developers and school administrators to suggest products for the new line.

The company also previewed the products at the National Parents and Teachers Association convention last June in Washington, where they received favorable reaction. It also went to 16 suppliers in the educational school supply field to assemble the assortment. In press reports, some analysts were bullish on the educational concept and gave credit to American Greetings for diversifying from its core greeting card business, which has been flat.

"Growth rates are very slim. Cash flows are under increasing pressure and competitiveness of the business [greeting cards] is at an all-time high," noted Eric Bosshard, an analyst at Midwest Research/Maxus Group, based here.

"The company has to continue to evolve their products and this is part of the process," said Michael Killeen, a consumer products specialist and partner in Arthur Anderson's Cleveland office. "They're very astute marketing people, and it's an interesting concept," he added.