Electronic marketing notes

Shopper Report, The, Nov, 2004 by Mona Doyle

An electronic marketing conference called GEMCON got my attention and attendance because of a phrase that I found intriguing. The phrase was "ergonomic touch points" applied to the shopping experience. As it turned out, I didn't learn much about them, but I did learn some other things of value and came back feeling better about the viability and customer focus of many supermarkets than I have in a while. Among the ideas that engaged me at this conference:

1. In today's competitive environment, the best communicator wins. This seems especially important when good communication has the power to actually improve customer service and break through the barriers of distrust that characterize so many of today's business/consumer relationships.

2. Equipment that enables stores to communicate with shoppers as they shop is getting better, sharper, prettier, and more consumer-friendly. The potential here is enormous, because the equipment is getting more consumer-friendly at the same time as more consumers are getting comfortable with electronic technology. Putting 1 and 2 together makes for more than the sum of the parts--the timing feels right for an explosion of meaningful and helpful instore communication in the years ahead. That may be especially important to retailers competing with Wal-Mart, which has done an amazing job of communicating the one thing they feel their shoppers have to know, i.e., that they always have low prices.

3. In spite of the optimism of 1 and 2 above, the fact of the matter is that there isn't much communication excellence and the better equipment is not in enough stores to make a dent of a difference. In fact, I learned that I'm not the only one that sees the shopping experience as getting worse. Reasons for the decline cited by academic analysts include product proliferation and complexity, confusing promotions, excessive clutter, poor signage, and poor service.

4. Retailers don't really address the shopping experience because:

* They rely on manufacturers' product assortment expertise.

* They think of themselves as merchants and real estate agents.

* They haven't been convinced that "shoppability" or the shopping experience make a critical difference.

5. Promotions are being touted as "engagement protocols." Saying that a promotion is an engagement protocol and not just a coupon means that promotions are opportunities to engage shoppers and build relationships.

6. This sounds something like using promotions to replace advertising: Advertising used to be expected to build brand relationships as well as sales, while promotions were designed and expected to build short-term sales. Today, with consumers so hard to reach though advertising, promotion is taking over most of its job. Supposedly, consumers are making emotional connections with promotions that meet their psychic, health, entertainment, or lifestyle needs. (I think promotions have to be very frequent to impact a shopper's relationship to a store. Stores that offer constant, or almost constant, taste samples do impact the shopping experience and the relationship shoppers have with them.)

7. Promotions that identify and reward the best (biggest and/or most profitable) shoppers are increasingly popular. A lot of people believe that the 80/20 rule (80% of your business comes from 20% of your customers) is as true as Murphy's Law. Rewarding the top 10% or 20% for their patronage seems to be viewed as the answer to profitability and survival in a Wal-Mart-dominated world.

Even if you are operating what used to be called a "carriage trade" store which sells high-end merchandise and caters to the rich and famous, focusing fully on top shoppers and rewarding them with special deals can be self-defeating because it leads to a shrinking universe. The shoppers who are regularly spending a lot and shopping regularly at your store probably like you anyway.

It makes lots of sense for supermarkets to make sure that they don't drop any items that their top customers purchase, but what about those low- and middle-tier guys and gals who often avoid or pass by the store because it doesn't carry the items that are most important to them? "I stopped shopping at the supermarket that is closest to me because they dropped the 'hot' version of an item I like a lot. It sounds like a small thing, but I spoke to the manager and filled out forms and they said they'd try to put it back but never did. So I now shop at two stores that carry it."

8. More women are spending more time shopping on the Internet. The increases are attributable to being able to shop whenever, saving time, and avoiding crowds. They are using the Internet for communication and information as well as shopping.

9. Marketing partnerships between manufacturers and retailers are more important than ever. They work and provide benefits for everyone involved.

10. RFID implementation is going to take longer than initially expected.

11. Some supermarkets continue to have upscale programs and downscale ads. When marketing and targeting plans are upscale, price and item ads shouldn't look like firehouse sales because the advertising has always looked that way.