Harveys Optimizes Promotions

MICHAEL GARRY

NASHVILLE, Ga. — Headquartered here in rural South Georgia, Harveys Supermarkets has created a marketing strategy that understandably caters to its small-town traditional roots. Yet Harveys, an 81-store division of Delhaize America that includes 70 Harveys and 11 Reid's supermarkets, is savvy enough to know that even rural shoppers are gravitating to big-market high-tech tools, which are increasingly factored into marketing plans.

Such traditional and modern approaches are part of what Lisa Overman, Harveys' ebullient director of marketing and advertising, calls promotion optimization, a topic she plans to discuss this month in a workshop at the Promotion Optimization Institute's Charting Your Course to Trade Promotion Optimization Summit. The event will take place in Chicago from March 13 to 15.

An MBA candidate at St. Joseph's University, Overman also plans to obtain a certification in collaborative marketing from the Promotion Optimization Institute, which will begin its certification program this fall.

For Harveys, promotion optimization starts with cultivating relationships with small, local suppliers.

"Large companies have lots of money to work with when it comes to marketing," Overman said. "But you have regional and local companies that don't necessarily have money to spend. So we try to work with those closer geographic partners to optimize sales."

Harveys' shoppers are looking for the grass-roots flavor that local vendors can supply. "They want cheeses made locally – maybe their neighbor makes it," Overman noted.

She added that it’s easier for a mid-size chain like Harveys to implement local programs than for 1,200-store sister company Food Lion. As a result, Harveys is trying to share marketing insights with Food Lion as well as other Delhaize America sister retailers Hannaford Bros., Bloom, Bottom Dollar and Sweetbay.

Produce growers – those who produce Georgia's famed peaches, as well as growers of strawberries and peanuts – are often the beneficiary of Harveys' local marketing partnerships. These can include such simple steps as in-store signage and product sampling.

"Produce managers will slice a peach open and say to customers, 'Take a bite of this Georgia-grown peach,' so they can see how fresh and sweet it is," observed Overman. "It's all about making employees aware of the importance of local flavors."

Efforts like these can boost sales of the targeted products by 30%, she said. Harveys tries to be innovative in finding low-cost ways to promote local growers. For Lane Peaches, a family-owned operator in South Macon, Ga., she has visited the farm and taken pictures of family members that are used in store signage. In return, Lane donates peaches for local events in a joint sponsorship with Harveys. In-store radio spots can feature interviews with local growers who describe their relationship with Harveys.

"That resonates with shoppers," Overman said. "They think, 'My grocery store cares about me because they care about people who work in my community.'"

The local approach is also applied to Georgia-based sausage makers and chicken growers. For example, Harveys partners with Claxton Poultry Farms, Claxton, Ga., in a promotion called "Cheap Chicken Mondays" in the deli department, discounting fried and rotisserie chickens and featuring Claxton's logo in store ads. In some cases, Harveys will receive payment for ads; in others it will barter for support for other areas of its business.

"It all boils down to relationships," said Overman.

In keeping with its small-town flavor, Harveys held fast for years to a no-loyalty-cards policy. But two years ago the chain bowed to "changing times" and implemented a card program "to be able to have a one-to-one conversation with customers," said Overman.

Shoppers can use a loyalty card or a plastic loyalty "key" that can be attached to a keychain. The loyalty program enables Harveys to develop promotions with vendors that "are relevant to the customers they want to touch," she said.

For example, in a promotion with Frito-Lay, "we may want to target a customer who shops once per week, spends $15 but doesn’t buy chips." In other cases, Harveys will make offers to groups of shoppers – who live in a given area, have children and pack lunches – "on products most important to them." Vendors may offer loyal customers a coupon to try a new flavor.

In addition to direct mail, Harveys is making use of technology to deliver targeted, vendor-supported offers, including email and a six-month-old mobile club. For the latter, shoppers who opt in receive text messages with coupons that can be downloaded to their loyalty card or key for electronic redemption at the POS. The mobile club, she said, is "slowly growing"and perceived as a tool for up-and-coming shoppers. Email also allows shoppers to download offers electronically or print them.

Between 14% and 15% of shoppers open email offers and about 34% of those redeem them, said Overman. Emails also provide a chance to get a preview of the next ad flier. Harveys even allows shoppers to type in their phone number into a store kiosk introduced last year and receive a sheet of targeted offers valid for that day only – showing yet another way a retailer can try to optimize promotions.