TARGETING THROUGH E-MAIL

CHRISTINE BLANK

Supermarkets are gradually realizing the value of e-mail marketing as a promotional tool and as a way of communicating with customers.

Many large supermarket chains are sending e-mail coupons to customers through third-party companies, while others are handling e-mail marketing in-house. Although supermarkets with on-line shopping services have a greater incentive to communicate with on-line users, experts say all retailers should be using e-mail to drive traffic to their Web sites and into their stores.

Among the creative ways to drive on-line users into stores are contests requiring shoppers to print out vouchers to take into the store to claim a prize, or on-line children's coloring contests, in which kids can print out pictures to color from the Web site, then take them into the store to win prizes.

Chains also are using e-mail to provide helpful information. For example, the Web site of Wegmans Food Markets, Rochester, N.Y., allows consumers to sign up for the "Pet Gazette," a weekly advice newsletter authored by a veterinarian that contains no Wegmans advertising. Giant Eagle, Pittsburgh, uses opt-in e-mail for an array of promotions based on interests expressed on sign-up. These include updates on the latest video-rental releases, product news and contests. Giant Eagle will send e-mail receipts to those who order prescriptions on-line.

Some e-mail marketing programs are already advancing to a more targeted approach. Chandler, Ariz.-based Bashas' Groceries on the Go division, for example, already e-mails a monthly newsletter and coupons to shoppers who opt in to its mailing list, but e-mails will soon be more customized.

"If you want recipes, we'll give you that. If you buy dog food, we'll let you do that [with an e-mail coupon]," said Mike Gardner, director of Bashas' Groceries on the Go.

Gardner explained that Bashas' wants to distance itself from other marketers, who "spam" on-line users with unsolicited e-mail. "Our concept is that we want to develop a relationship, based on giving them the information they want."

Lifestyle and demographics will be taken into account in the new, customized e-mail program. For example, Bashas' might send a list of time-saving tips or a coupon for diapers to a new mother. "We'll develop more content because it's all part of that relationship. That's what a good friend would do, and Bashas' slogan has always been 'Where You Have a Friend,"' Gardner said.

Shoppers are willing to share lifestyle and demographic information about themselves and their values as long as they can see that there is a value in providing the information, he said. "This is just a concept, but customers we've talked to say they are fine with it," Gardner said. Already, the regular monthly newsletters have been well-received because they are infrequent, and provide advice for using the Web site and on-line shopping service. "We've discovered that this is a brand new way for people to shop. Sometimes it makes sense to them and sometimes it doesn't," Gardner said.

E-mail also can be used to simply communicate with customers, not just to sell products, experts point out. Although Dorothy Lane Market in Dayton, Ohio, sends a monthly e-mail newsletter to shoppers, its primary use of e-mail is responding to questions and special requests submitted daily on its Web site.

"Marketing should not be confused with just selling stuff," said Norman Mayne, owner of Dorothy Lane Market.

Bob's Produce, Fridley, Minn., a retail outlet and on-line mail-order business, sends new product and promotional e-mail to all customers who have opted in, but doesn't schedule them regularly. "They're going to start throwing it away if they get it every week," said Mike Schroer, one of the owners. The e-mail is an effective way to communicate with Bob's Produce's primarily out-of-state customers, who order the retailer's regional items on-line or through a toll-free phone number.

The mail-order business touts Minnesota and regional foods, such as Hedge apples, and Old Dutch Foods' snacks, along with fruit baskets and boxes shipped nationwide. Bob's Produce Ranch private-label salad dressings and steak and barbecue sauces are included in the mail-order offerings, and the retailer also sells select nonfood products, such as Toybox Creations' beanbag and its exclusive plush fruit and vegetable characters.

Bob's Produce e-mail messages are text files that include links back to its site and they are personalized, with the recipient's name at the top. "I think that is very important: It gives a personal aspect, so it's not just a generic letter you get at home," Schroer said.

"Personalization can mean the big difference in whether the e-mails get read or deleted," noted an industry source.

While some retailers have been proactive, Internet analysts are urging companies to target on-line users where they are most often: their e-mail boxes. On-line users spend 91% of their time sending and receiving e-mail, according to Jupiter Communications, New York.

Jupiter notes that the commercial e-mail market will grow to about $7.3 billion in 2005 and cannibalize direct-mail revenues by 13%. Research shows that U.S. consumers will see an estimated 40-fold increase in e-mail volume in that time span, so Jupiter advises that businesses improve their outreach by integrating messages across media channels, growing house lists, and incorporating feedback for improved targeting or risk increasing opt-out rates. According to Jupiter, 65% of companies are spending between 1% and 5% of their marketing budgets on e-mail marketing; an additional 22% are now spending more than 5%.

E-mail is cost-effective and has a high response rate, Jupiter said.