MAKING CONNECTIONS

MICHAEL GARRY

Retailers and manufacturers have traditionally marketed to shoppers through a combination of weekly circulars, in-store displays, coupons distributed through freestanding inserts, and perhaps TV and radio ads.

But Minneapolis-based Supervalu has designed a new scenario for reaching shoppers that emphasizes in-store electronic media and personalization. Called "avenu," it includes coupon-dispensing kiosks, checkout coupon printers, digital screens and audio broadcasts.

"Avenu is the grocery industry's first integrated media and marketing network," said Steven K. Prebble, vice president, customer strategy & management for Supervalu. Prebble, who is spearheading the avenu program, talked about it in what was probably the highlight presentation at GEMCON, the Global Electronic Marketing Conference, which took place Oct. 9-11 at The Canyons, Park City, Utah.

"We think avenu is a unique differentiator for us and a nice first-to-market advantage for us as well," he said. More than 100 brands are participating in the program thus far.

Supervalu actually inherited both Prebble and the avenu concept from Albertsons when it acquired large chunks of the Boise, Idaho-based retailer earlier this year. Albertsons introduced the avenu kiosk, the centerpiece of the program, at 11 Jewel stores in September 2005, but has stepped up the rollout of the kiosks this year. The kiosks are now in about 200 Jewel/Osco stores in Illinois, Iowa, Wisconsin and Indiana, and 350 Albertsons stores in Southern California and Las Vegas.

But avenu, which signifies the shopper's "path through the store," only starts with the kiosk, positioned at the entrance of a store. It continues with 42-inch digital plasma screens, from SignStorey, Fairfield, Conn., in perimeter departments like produce and meat/deli, and audio programming from In-Store Broadcasting Network (IBN), Salt Lake City, throughout the store.

Avenu concludes with 15-inch LCD TV screens, from Premier Retail Networks (PRN), San Francisco, at checkouts, along with coupon printers from Catalina Marketing, St. Petersburg, Fla. The in-store technology is supplemented outside the store by direct marketing, email and Internet marketing.

For Supervalu, avenu represents a multi-pronged method for connecting with customers. "We want to provide customers with value through the power of personalization, both at the entrance kiosks and the [POS coupons], and at home via the Internet," Prebble said. "We also use the emotion of video and the immediacy of point-of-purchase to bring awareness of products and promotional services."

Supervalu plans to roll out avenu to additional stores, though Prebble acknowledged that the company is still determining the type of stores for which avenu is best suited.

Targeted Offers

One or two avenu kiosks are located at the entrance to stores. Shoppers who use the kiosks scan their loyalty card and receive a sheet containing 12 offers, all but one targeted uniquely to the shopper's household. The process takes less than 12 seconds.

The offers, which change daily, are for products purchased in the past or for suggested products that similar shoppers have purchased. Discounts are delivered automatically at the checkout when the card is scanned.

Avenu discounts, listed on receipts as "avenu saving," are over and above discounts offered on the shelf. Shoppers can retrieve the same offers on the Internet by inserting their loyalty card number and printing out the coupons.

Coupons normally sent to customers through direct mail can be delivered via the kiosks. By using the kiosks, shoppers "won't forget the coupons at home, stuck on the refrigerator," Prebble said. "And we're getting [the shoppers] when they're thinking about how much to spend." While kiosks won't replace direct mail, "they will help us become more cost efficient," he noted

The kiosks, which are remotely monitored, are based on software from Concept Shopping, Lisle, Ill. Hardware for the kiosks at Albertsons stores is from Xperex, South San Francisco, Calif.

In an effort to tie traditional merchandising vehicles - circulars and in-store displays - to the avenu program, Supervalu recently created "avenu Extra." This takes one item from the front cover of the circular and adds it at the bottom of the page, promoting "an even better discount for kiosk customers," Prebble explained. Thus, of the 12 offers on the kiosk sheet, 11 are targeted and one is the avenu Extra for every loyalty shopper.

The PRN and SignStorey screens, which feature an avenu icon, show a variety of video and still images covering cooking tips, store information and ads from CPG companies. Some of the content is geared to avenu, such as promotions of avenu Extra items on the PRN screens, "so the next time shoppers see it on the circular they will recognize it," Prebble said.

In one integrated scenario Prebble described, the SignStorey screen in the produce department shows a chef mincing garlic in a spot for pasta sauce. A shopper heading for the pasta aisle hears an audio spot over IBN promoting linguini. And related pasta products are featured on the avenu kiosk and in Catalina coupons.

Promotion Playground

For CPG manufacturers, Prebble described avenu as a "playground to promote items in a value-added way" that takes marketers beyond traditional promotional tools.

"[Manufacturers] are already talking to our category management team to do weekly circulars, secure display space and [discuss] traditional media like TV and radio," he said. Avenu, he added, offers them "an in-store media and marketing network that allows [them] to touch customers in numerous ways."

With avenu, Supervalu is giving manufacturers access to specific customers as well as the ability to reach them in the store through the kiosks. Moreover, manufacturers pay for kiosk promotions only when they are redeemed by consumers at the POS.

"It's cost-effective for manufacturers compared to traditional programs," Prebble said. "It's a unique opportunity for manufacturers to target only customers they wish to target and put a cap on the investment." Overall, manufacturers can invest anywhere from $5,000 to "as much as their budgets will allow," he said.

While manufacturers don't need to use all of the assets of avenu at the same time, Prebble noted. "We recommend they begin to think strategically about linking them."

Daniel Saurer, loyalty marketing manager for the Albertsons division of Supervalu, acknowledged to SN at GEMCON that avenu may represent a leap for some manufacturers. "The challenge with CPGs is that they're used to [temporary price reductions], displays and co-op," he said.

One CPG executive, Dale Brooks, marketing manager-professional marketing/CRM, Johnson & Johnson /Merck, Fort Washington, Pa., regards the avenue kiosks as being "much more targeted, and serving a different objective than the circulars and displays." The ability to offer coupons before the shopping experience, he added, "is optimal, vs. the checkout coupon that needs to wait for the next visit."

Jon Robertson, managing director, Ogden Associates, Morristown, N.J., which hosted GEMCON, praised the avenu program for "bringing category managers and the marketing department together and putting the customer in the center."

Ogden presented Supervalu with the GEM Award for excellence in electronic marketing in the retailer category, in recognition of using avenu to "focus multiple touchpoints for ongoing communication to reinforce marketing messages," Robertson said.

However, Robertson noted that Supervalu needs to be careful about a conflict occurring between national-brand programs such as those taking place through Catalina and the account-specific nature of the avenu program. "They have to make the targeted communications make sense with what is happening globally," he said. "If they don't pay attention, they could cannibalize a manufacturer's offers."

Early In The Game

Though Prebble said he couldn't share specific results from the program, "it's fair to say that we're getting encouraging results," he said.

"We're still early in the game," Saurer said. "We've seen modest gains." Supervalu is studying how shoppers are reacting to the integrated campaigns, whether the right offers are being delivered and which tools are being used by which customers, he added.

Whereas traditional promotional programs usually produce temporary sales spikes that are followed by a return to baseline trends, the avenu program allows manufacturers to build incremental sales over time, Prebble said. "We're looking for changed shopping behavior."

Prebble described a test in which the same offer was run at Shaw's stores using freestanding inserts and at Jewel stores employing electronic targeted vehicles. The Jewel stores experienced a 131.3% lift vs. an 86.5% left at Shaw's.

"It's hugely challenging to launch a program like this," Prebble said. "But I feel passionately about this concept being a change driver in our industry."

Targeting Healthy Lifestyles

While Supervalu's targeted avenu program incorporates multiple electronic marketing vehicles, Stop & Shop, a division of Ahold USA, is also pursuing targeted promotions, albeit using more traditional resources.

In one three-week promotion in January aimed at "healthy lifestyles," the Quincy, Mass.-based chain employed a targeted direct-mail campaign, combined with in-store radio, circulars and signage, to generate incremental sales.

The program's objective was to "reinforce a consumer's desire to live a healthy lifestyle," said Caryn Neidel, manager, customer relationship marketing, Stop & Shop, who described the program during a presentation at GEMCON, the Global Electronic Marketing Conference, which took place Oct. 9-11 at The Canyons, Park City, Utah.

Neidel declined to name the products or vendors involved in the promotion.

The direct-marketing campaign targeted three consumer segments identified through loyalty card data. Some Stop & Shop customers were offered dollars-off coupons for a designated store department in return for purchasing participating products. Targeted shoppers also received recipes and information relevant to the healthy lifestyle theme.

For comparison, shoppers at sister company Giant Food, Landover, Md., were offered the same incentive but in the form of percent-off coupons.

Stop & Shop found that about 25% of shoppers were "aware of the program," while about 50% were aware of it when prompted to recall the program.

Stop & Shop also noticed that the offers with rewards "appeared to be more enticing than previous promotions that didn't include that," Neidel said. Moreover, no appreciable difference was found in the response to the Stop & Shop reward vs. the Giant-Landover reward.

The program, she said, generated incremental sales for both participating products as well as for "overlay" products that were not the focus of the program. She did not provide specifics.

The chain determined that the strongest results of the program came during the first two weeks. "Three weeks was too long for the customer to remain engaged. The numbers in the final week fell back," she said.

Neidel attributed the success of the program in part to the use of "every single promotional asset in the store." In addition, she said, it was important in a multi-week program to ensure store compliance with the promotion's directives. "Marketing and merchandising have to have a real close connection to operations to make sure the program is executed flawlessly in-store."

Overall, Stop & Shop learned that an event needs to be "big and simple, for consumers, merchandisers and CPGs," she said. "The simpler the better."