Driving sales locally - TruServ

Home Channel News, June 18, 2001 by Jason Gonzalez

Having found its national image campaign wanting, TruServ throws ad support to circulars and in-store events

With its new commitment to member profitability looming over all sectors of its enterprise, TruServ is in the midst of changing the philosophy that has driven its advertising programs over the last few years.

Fred Kirst, a veteran merchandiser -- and more importantly, a non-advertising guy -- whom TruServ named to head up its advertising, explained that the national TV campaign focused almost entirely on building the True Value brand and not enough on products. The co-op strongly supported the NASCAR circuit, even though TruServ does not have its own race car. It relied heavily on the same old 24-time, biweekly circular program that predictably featured seasonal and sale items.

Kirst, the co-op's vp-merchandising and advertising, along with TruServ vp-sales and marketing Dave Davis and Rob Liebgott, the senior vp who oversees all four departments, came to an agreement that the co-op's approach to advertising and marketing needed an overhaul. The stronger emphasis had to be placed on motivating existing and potential customers to actually go to a True Value retail store.

"We can't afford to lose sight of the fact that this is a co-op and everything is tied back to enhancing the retail profitability of our membership," Davis explained. "We have to be able to demonstrate to members that the campaigns are going to drive footsteps into their stores right now."

There is little question that this philosophical shift has already occurred within TruServ's corporate walls. For many reasons it had to. In light of the financial difficulties the co-op faced in recent years, TruServ is now presenting itself as a streamlined, refocused operation that is dedicated to scrutinizing every program product and expenditure to maximize retail sales and profits. Advertising, on which TruServ spent a combined $250 million over the past three years, is a high-profile area where members can see the results and judge the return on dollars spent all by themselves.

This year is serving as an important test for the new approach. TruServ has taken some big steps away from pure branding and toward product- and event-driven ads. (In April it discontinued the "Help is Just Around the Corner" image-building commercials, and in October it will launch a joint marketing campaign with McDonald's that places True Value coupons on the fast-food chain's take-out bags.) But as of late May, TruServ's membership, as represented by the member advertising council, had yet to place its stamp of approval on the overall change in philosophy.

When interviewed in late May, Kirst was preparing to present the new agenda to members at a June 12 meeting of the co-op's ad council, which includes representatives from 88 regional groups around the country that speak for 3,744 dealer-members. What Kirst must communicate and get approval on is the following: TruServ shifting its main focus from image/brand-dominated advertising with a supporting message about products to product/service-dominated advertising with a supporting message about brand.

The trick will be to create the kind of excitement about products (especially hardware and tools that are so familiar and commonplace) that would actually draw customers to a store. The solution, as Kirst sees it, is to create a series of events around which it would frame the marketing campaigns.

CREATING CUSTOMER TRAFFIC

The inspiration for this approach was the success TruServ enjoyed last Christmas with a marketing campaign called the Twelve Days of Christmas. That two-week campaign created an event, the 12 days leading up to the holiday, with circulars, 30-second TV and radio spots focused on True Value products and print ads in Parade magazine. In a departure from its regular circular program, where retailers do very little in-store pro motion, True Value dealers put up signs and store decor in support of the campaign.

Kirst maintained that the Twelve Days of Christmas helped members to sell 140 percent more than was forecast on the items that were highlighted, such as trim-a-tree goods and tool sets for dads. "And the forecasts were aggressive," he noted. Consequently, vendors bombarded Kirst with requests to participate in the Christmas 2001 version, at which point TruServ realized that it was on to something.

"We learned that we have to create an event and then the media stack has to tell consumers that there's something good going on at True Value this weekend," Kirst said. "The circulars are the cornerstone of who we are but that said, we also have to have the multimedia to back up the circulars." The stores also must display signage and be ready for the event.

The new approach would have the co-op reduce the circular frequency to focus on six or seven full-blown events each year. In the valleys between those events, it would still advertise but not nearly as heavily.

A handful of True Value dealers contacted by NHCN did not want to or could not comment on the changes because they had not been formally told of its proposals. One of those dealers, based in Illinois, said he would welcome any efforts to bring people into his store.