IN-STORE TACTICS GAIN IN POST-MASS MARKET

JAMES TENSER

CHICAGO -- Proponents of in-store marketing expect it to gain stature in a post-mass market as improving information drives the tailoring of programs to specific retail environments.

"The mass market is dead," said Burt Flickinger III, a principal of the A.T. Kearney consulting firm. "It doesn't matter that Wal-Mart has over 2,000 stores -- you still have to micromarket per division, per store, using varied, well-conceived analytics on a per-ZIP code and sub-ZIP code basis."

Citing current estimates that two-thirds of consumer purchase decisions are currently made at the retail shelf, he predicted that within the next five years more than 80% of all consumer decisions will be made at the point of sale. This fact, he said, "really emphasizes the need for efficient and effective in-store marketing."

Flickinger said that as new retail formats, such as supercenters, gain power in the marketplace, many old ones will "change or die." Suppliers will need to work closely with successful retail partners or risk losing out. He warned, however, against taking one's marketing eye off the supermarket as a class of trade.

"As you look at the tremendous growth in mass and membership, drug, deep discount and C-stores, still remember that today and probably for all of our lifetime the supermarket channel will really be the dominant channel," he said. "In terms of efficient in-store consumer promotion, it will be the most efficient provider simply because it is the best, most experienced, has the traffic that other channels really can't deliver on a daily and go-forward basis."

An issue common to dealing with all major trade classes, Flickinger said, is the tailoring of individualized marketing programs down to the store level.

Win Taylor, president of Campbell Sales Co., said his company is acting on that reality. "We are looking out beyond Efficient Consumer Response and coming to the conclusion that micromarketing will be back -- once we get through the logistics savings and new information technology systems that we put in. It looks like it is back to selling and marketing and putting together strategies that will help build business store by store and neighborhood by neighborhood," he said.

Campbell makes wide use of in-store media such as Catalina Marketing's Check-Out Coupons, especially for new product launches, he said. It also has a tactical value, in responding to "local situations," he added.

In-store programs are generally welcomed by retailers, provided they contribute to a real expansion of sales, said Terry Peets, executive vice president of Ralphs Grocery Co.

Peets explained: "If the in-store medium is moving additional category volume, then it is of consequence to us. If it is simply moving volume to one product at the expense of the other, then that is of less value to us, unless of course it is stimulating new trial of a new product, which of course is a benefit for everybody."

Flickinger, Taylor and Peets were participants in a panel presentation on in-store marketing at last month's FMI convention here.

Flickinger said that a clear understanding of the post-mass market should lead manufacturers to respond proactively with both high-tech marketing and more traditional high-touch techniques such as in-store demos.

"What each of us do with in-store marketing can affect share by as much as 20 points," Flickinger said, warning that this is equally true for store brand and national brand products.

With the balance of power shifting from the manufacturer to the retailer, delivering on in-store marketing and establishing the key continuity relationships with the consumer will largely be managed by the retailer, he said.

"This is an opportunity for co-marketing," he said. "When you have a high volume or expandable consumption category, you really want to drive the co-marketing equation."