Promotional Merchandising Memo: Whole Foods Market's Super Bowl In-Store Promotional Merchandising Message: 'Value'

Merchandising: Super Bowl Sunday is 'Game-Day' For Food Retailers

Today, Super Bowl Sunday, is America's most "official" unofficial holiday. It's celebrated by more Americans -- who either gather around the living room or family room TV with family and friends, the coffee tables filled with snacks and beverages, or go to a pub or pizza parlor to view the game there with a gang of fellow celebrants -- than probably all of the official or federal U. S. holidays accept Thanksgiving, Christmas and New Years.

And a small percentage of Americans, as well as even a few folks from other nations, travel to wherever the Super Bowl is being held in order to watch the big game live. And in Tampa, Florida, where this year's Super Bowl is being held, it's a two or three day (OK, even four days for some) "holiday celebration," with pre-game festivities that started yesterday and a full schedule of events leading up to the big game later today.

For those watching the game at home, at a pub or live at the stadium, the celebration doesn't usually end when the game is over either -- it tends to go on until late Sunday night. The Super Bowl is an "event" that happens to include a major football game along with it rather than a football game that also has some celebrating before and after it.

Super Bowl as a retail merchandising promotional event

Super Bowl Sunday is a major merchandising and promotional event for food and grocery retailers. Beginning early in the week, leading up to today's game, grocers bring out their Super Bowl Sunday in-store displays -- snack foods, beverages, prepared foods, snack-related fresh meats and produce, non-foods, you name it -- and signage. Most retailers also focus and lead their weekly advertising circulars (and Web sites) and other media on Super Bowl Week with game related food, beverage and related items.

The event offers a great opportunity for food and grocery retailers to sell lots of higher-margin impulse items -- and more items in general -- that they would normally be able to sell in late January and Early February were the Super Bowl not happening. But because it is happening today, Super Bowl Sunday week is a grocer's (sales) holiday as well.

A pre-Super Bowl field trip to a few Whole Foods Market stores

Since Natural~Specialty Foods Memo (NSFM) has been writing regularly about Whole Foods Market, Inc.'s battle against the U.S. Federal Trade Commission's (FTC) legal challenge to overturn its friendly 2007 acquisition of Wild Oats Market, Inc. (just scroll down the Blog for numerous recent posts and links to past posts), along with the natural grocery chain's struggles of late, including a 71% drop in its stock value over the last 52 weeks, a 40% drop in quarterly income in its last reported fiscal quarter, and other negatives, we decided to visit and check out a few Whole Foods Market stores and see what the leading natural-organic foods' class of trade retailer in the U.S. was up to in terms of Super Bowl Sunday in-store merchandising and promotional activity.

Therefore, on Friday and Saturday we visited a number of Whole Foods Market stores, our eyes and merchandising radar focused on Super Bowl-related in-store merchandising and promotional themes, concepts and product displays.

Below are the highlights of what we found during our field trip:

~First, Whole Foods Market is using an overall theme of "value" in-store with its Super Bowl Sunday promotions and product displays. Regardless of the product displayed, there is a tie-in to the natural grocery chain's ongoing "value-based" merchandising and marketing that it started last year.

For example, in a number of Whole Foods stores we visited, the stores' prepared foods departments were featuring party platters marketed as "Ready to Save Value Packs." The value packs, which included ready-to-heat-and-then-eat Buffalo chicken wings, deviled eggs, celery sticks (no heating on those two, just ready-to-eat) with dipping sauce and other related game day snacks, were placed in dedicated freestanding coolers in both the prepared foods departments, as well as in other parts of the store. The message and pricing was all about "value." The "value pack" items were basics rather than gourmet fare, as described above.

~Value also was apparent in the choice of displays throughout the stores. Many of the Super Bowl-related food and beverage items we saw in the stores were Whole Foods' private label products, including its more "value-oriented" "365-Everyday" store brand. The store brand was discount priced (with signage indicating that fact), and in many cases the retail prices were comparable to similar conventional game day food and drink items being promoted at conventional supermarkets nearby the stores. The Whole Foods private label product displays were all over the stores -- on end-caps, in the aisles, ect. The message was one of "value," be it the pricing on a jar of natural salsa, a package of snack chips or on a can of olives.

~We also noticed Whole Foods' heavily promoting natural snack items from big company vendors like PepsiCo's Frito Lay. Two of the stores we toured had massive "in-aisle" displays of the company's Stacy's brand All-Natural Pita Chips, priced at a substantial discount. The message: "value."

~Pretty much all of the branded and private label snack, party food, beverage and related game day items displayed in the stores had a "value theme." And instead of numerous higher-end or premium organic items like we saw during last year's Super Bowl displays in Whole Foods' stores, this year there was a real focus on more basic and more inexpensive "value-oriented" items, this included reduced-priced micro-brew beer brands as well, rather than numerous higher-priced craft beers like we observed last year.

~In terms of Super Bowl themes and signage, we noticed in-store signs and banners featuring "game-day" slogans and tag lines such as: "It's Game Time," "Get in the Game" and "The Game Plan." The signage took the form of hanging ceiling signs, shelf talkers, display headers, posters, aisle violators and more. No two stores had the exact same signage or combination of signs, which makes sense because of Whole Foods' decentralized merchandising philosophy and program.

~We also saw lots of creativity in the stores around the Super Bowl theme, everything from graphically attractive hand-lettered and hand-drawn signage to more commercially-produced graphics, as well as a mix of both in a couple stores we visited.

~We also observed lots of great cross-merchandising tie-ins -- snacks and beverages, cheeses and crackers and the like. In one store we liked a display that incorporated non-foods items like eco-napkins, eco-cups and other related items with snacks and food and beverage items, all tied-in on the display with signage touting the value message.

Summary:

It's apparent to Natural~Specialty Foods Memo (NSFM), based on the Whole Foods Market stores we visited, that the natural grocer gets it that it needed a value proposition and message for its Super Bowl promotion this year, which is something all retailers, of all formats, need this year in this severe recession, in our analysis.

We found the particular focus on the Whole Foods' store brand items in the displays interesting but not surprising. There's a much more extensive representation of the store brands, particularly the "365-Everyday" value brand, this year in the stores compared to the Super Bowl Sunday promotional displays we saw last year. We aren't surprised because it is with these store brands, especially "365-Everyday," along with branded natural and organic items from bigger suppliers who offer greater promotional allowances, where Whole Foods can best make its 'value statement" (read price-impact) right now, in most cases.

But the stores we visited also had numerous artisan and specialty brands displayed as well, particularly in cross-merchandising-type displays. These included cheeses, craft beers, sodas-beverages and a number of other game-day related food and drink items. These higher-margin items, cross merchandised among lower-priced ones, can, if bought by shoppers, add some margin enhancement for a grocer. And because the Super Bowl is such a once-a-year "special event," many shoppers (mostly men) likely splurged a bit and bought the higher-end items, even though they might have kicked themselves (or were kicked by the significant other) for doing so later at home.

Lastly, we noticed shoppers gravitating considerably to the "value oriented" Super Bowl displays, grabbing multiple items in the snack, prepared foods value pack and other displayed selections. it was clear to us in observing, that these shoppers were responding to the "value message." After all, most of us have to right now. And grocers, regardless of format, need to emphasise "value" at every turn, in our analysis.

We don't know how good overall pre-Super Bowl Sunday (and Super Bowl Sunday) promotional sales were this year for Whole Foods Market -- and the individual stores won't know until the end of business today -- and the grocery chain eon't know fully until Monday morning.

But based on the "value-oriented" themes we found in the stores we visited, along with the numerous reduced-price displays in those stores, it's likely Super Bowl-related sales for the natural grocery chain will be much better for the Super Bowl event this year than had the grocer not focused so much on the "value proposition" and the more "value-based items" in its stores for 2009, instead of promoting more higher-end and premium products and themes. Doing the former ("value-based") could portend a good Super Bowl event selling weekend for Whole Foods Market.

Packaging & POP Memo: Lights, Sound, Video - On Packaging and In-Store Point-of-Purchase Displays

From the Natural~Specialty Foods Memo Editor's Desk: High technology is making its way to product packaging and in-store point-of purchase displays. Specifically, according to a report in the marketing and advertising publication Advertising Age, lights, sounds and streaming video are beginning to show up on product packages and in-store point-of purchase (POP) displays.

Perhaps in today's 24/7 electronic, plugged-in world, packaging and in-store displays are the next logical extension of technologies such as streaming video? On the other hand, do consumers really care, especially when it comes to packaging? And will the added costs of such packaging enhancements really lead to increased sales for the brands and products that use the electronic elements on the product packages?

Perhaps in the case of in-store point-of-purchase displays, features like electronic lights, video and sound can help draw attention to the displays and thus lead to increased sales. After all, various types of interactive POP displays have been around for many years. They just aren't as sophisticated as the ones mentioned in the Ad Age piece.

When it comes to product packaging we are skeptical. In some special cases, depending on the nature of the product, such technology might have some merit. And in the case of new product introductions it might be interesting to create a limited run say of the new products' labels featuring electronic ink or some form of streaming video for promotional purposes.

But in the case of the majority of food, grocery and health and beauty care-general merchandise items we are hard-pressed to think at this point in time consumers will be drawn to such bells and whistles on the outside of the product -- it's labels.

Rather, we think brand building the good old fashion way will still be what's key. Quality, value, price, an attractive package or label, marketed to generate trial and then to build brand isn't going to be replaced by technology applied to packaging in the vast majority of cases.

We are far from Luddites though, so we welcome the innovation, especially for in-store POP displays, and in those particular product packaging cases like we describe above for product packaging. Generally, the more options the better.

And we like enjoy the "Gee Whiz" factor at times as much as anybody.

Of course there is the "green factor" as well. Such as since the packaging will be electronic, won't it have to be disposed of in special ways like most electronic waste is. That could be a real kettle of worms. It's also something it appears to us the developers and users of this new packaging have yet to take into serious consideration.

Read the report from the October 20, 2008 issue of Advertising Age below:

Soon, Your Mayonnaise Label May Have Sight, Sound, Video
Electric Ink Could Be Low-Cost, Energy-Efficient Option for Advertising
By Jack Neff
October 20, 2008

BATAVIA, Ohio (AdAge.com) -- In-store displays and product packaging are getting a whole lot flashier -- literally, with lights and streaming video.

Henkel's Right Guard is testing use of printed electronics to power flashing lights in corrugated in-store displays at Walgreens stores in the Chicago area, a first step for a technology from Arizona start-up company Nth Degree that could eventually bring low-cost streaming video to printed displays, packaging, direct mail or magazine inserts.

Other tests are in the works involving other marketers and formats, according to people familiar with the matter, including one expected next year involving printed electronics on packaging for a Procter & Gamble Co. brand, believed to be a tissue-towel brand. P&G declined to comment on the project.

Anil Selby, VP-business development for Nth Degree, declined to comment on tests involving marketers, though he said the company has been in discussions with P&G, General Mills, Coca-Cola Co. and PepsiCo, among others.

Even for hardened marketers, it's hard to get past the gee-whiz factor. "It's just incredible what they're doing," said Tom Owen, director of in-store merchandising for Henkel of America (formerly known as Dial Corp.), when Nth Degree executives showed him an 8½-by-11-inch sheet of paper running a video snippet from the original "Star Trek" series. (Moving newspaper photographs in Harry Potter movies come to mind.)

Limited rollout

Henkel is taking a disciplined approach to evaluating the technology's commercial potential, which it's been testing in 27 Chicago-area stores, compared with a control group using the same basketball-themed display without the electronic enhancements in 27 other Chicago stores.

"When it comes to investing in something nationwide, cost will be a factor," said Mr. Owen, who has been working with the Alliance in-store marketing unit of corrugated display maker Rock-Tenn Co.

Nth Degree, based in Tempe, Ariz., near Henkel's Scottsdale headquarters, uses "wafer printing," employing conventional presses to print layers of ink that act like circuit boards.

The Right Guard displays use battery packs, but Mr. Selby said it's also possible to affix a wafer-thin power source directly onto paper or a package. He said he sees printed streaming video as part of a second phase of the technology's rollout.

The wafer-based inks are 90% more efficient than fluorescent lighting, environmentally friendly and can be powered using solar collectors, Mr. Selby said. The technology can be mass-produced cost effectively for as little as 20¢ per unit, he added, though initial installations are in the $3 to $10 range. That's one reason the company has targeted store displays that can reach hundreds or thousands of people at once.

Scale, individual attention

Mr. Selby ultimately sees the technology being used for outdoor ads, or as a cost-effective replacement for LED video displays in retail. Nth Degree can make displays individually addressable, allowing different messages in different stores.

Magazines also have been taking a look at electronic-ink technologies, most notably in the case of Esquire, which used it on the cover of its 75th- anniversary issue. Get a behind-the-scenes look at how that cover was put together in a 3 Minute Ad Age.

Shopper Marketing Memo: Use Retail-Specific Data to Create Retail-Specific Shopper Marketing programs Rather Than Taking the 'Cookie Cutter' Approach

Shopper marketing, simply defined as marketing directly targeted to the shopper rather than using the media for example, along with what happens within the retail space, is becoming one of the fastest growing forms of product marketing in the food, grocery and consumer packaged goods industries.

Shopper marketing takes many forms, including simple in-store off-invoice allowance reflections flagged at the shelf, club card discounts, in-store and FSI coupon programs, sweepstakes promotions, product samplings and tastings, giveaways, and combinations of two or more of these activities, as well as other campaigns focused directly on the shopper.

Large consumer packaged goods companies have learned one of the keys to successful shopper marketing is to target a specific program to a specific retail chains customer base. For example, chain A's customers might respond strongly to in-store coupons, while Chain B's shoppers barely participate or go for such campaigns.

Medium-size and smaller food and grocery companies, especially those in the natural and specialty foods space, tend not to seek out this data from retailers--and it is most often available--but rather will create a shopper marketing program, such as coupons or product sampling, and roll it out to all of the retail chains and independents in a market.

While sometimes this can work, more often by using this cookie cutter approach not only do natural and specialty foods' manufacturing and marketing companies miss out on all the sales gains they could achieve in a chain-specific shopper marketing program, they also spend far more money out of their budgets than is needed in order to receive less than successful results. In other words--this cookie cutter approach more often than not results in less bang for the promotional dollar buck than if the marketer would have taken a little more time to gather the available data from each chain and customize the shopper marketing program accordingly.

For example, if there are three major chains in a market, and Chain A's shopper data shows its shoppers respond best to in-store coupon programs, that's the way to go with that retailer.

Conversely, lets say Chain B's data shows such programs get a minimal response from its customers. However, Chain B's shoppers buy big when club card promotions of 15% -to- 20% discounts are conducted. Your road map for Chain B should be clear. No coupons please.

Lastly, lets examine our hypothetical Chain C. It happens to be an upscale regional chain of 90 stores. The upscale retailer's data shows its customers really don't respond all that well to price promotions of any kind--off invoice, in-store coupons, club card deals and the like. Rather, what turns Chain C's shoppers on, and gets them to purchase more, are food tastings or sampling events, especially when the product is gourmet or healthy.

Chain C's shoppers are foodies, and they like quality and new items. Give them a taste of something new in-store, and do so with flair, and they will buy two or three packages regardless of price.

Obviously then, using in-store coupons or a club card program would be a big mistake with this chain. Rather, a marketer wants to allocate its budget for tasting events, as that's where the action is with Chain C's shoppers--and increased product trial and sales.

As you can see, we went from a one-size shopper marketing program for all three hypothetical chains--which is more common among natural and specialty foods' marketers than it is uncommon--to a customized in-store shopper marketing program for each of the three chains.

The key to being able to do this retailer-specific shopper marketing is obtaining the data from the chain. However, if the data isn't there, a marketer can obtain plenty of good anecdotal data on which shopper marketing programs work best from category managers and merchandising managers at a given chain.

These experienced folks know what has worked and not worked in the past, and want marketer programs to work. Therefore, if asked, which often isn't the case, they will generally share all they know about what types of shopper marketing programs are effective in their stores.

In other words, all shopper marketing campaigns are not created equal because every retailer has a unique customer base. For a campaign to be successful, marketers should tailor it to their shoppers’ preferences and include media that influences them to purchase.

For example, according to findings released by Worthington, Ohio-based BIGresearch, a marketing intelligence firm, at the Promotion Marketing Association’s recent first annual Shopper Marketing Summit, 71.6% of Kroger shoppers say coupons influence their grocery purchases; while 59.2% of Safeway shoppers say the same. That's a significant difference in coupon use when it comes to the two respective chains and getting optimum bang for the promotional dollar buck.

The consumer packaged goods research firm conducted a study of shopper marketing looking at these two chains, the number one (Kroger Co.) and number three (Safeway Stores, Inc.) supermarket chains respectively in the U.S.

The data is valuable for food and grocery product marketers, sales promotions managers, National and regional sales managers, brokers and others who create shopper marketing programs.

Even more important is to remember and use the concept of chain and retailer-specific shopper marketing based on learning as much as can be learned about a particular food retailer's customer base and what shopper marketing programs they tend to respond to best. This is true whether the shopper marketing program is in-store only or a combination of in-store and external promotional activity. After all, it's all about getting the best return on investment a marketer can.

Below are some key findings about Kroger and Safeway shoppers, which BIGresearch presented at the recent Promotional Marketing Association's Shopper Marketing Summit:

>Although Kroger shoppers are more influenced by coupons than Safeway shoppers, this form of media is most likely to influence both groups in their grocery purchases. Newspaper inserts follow (51.1% for Kroger shoppers and 48.5% for Safeway shoppers). In-store promotion rounds out the top three as 45.9% of Kroger and 43.5% of Safeway shoppers said the media influences their grocery purchases.

>Kroger shoppers said that the in-store promotion that influences/greatly influences them the most is product samples (60.6%) followed by shelf coupons (47.8%) and store loyalty cards (47.6%).

>Product samples (58.5%) are also most likely to influence/greatly influence Safeway shoppers; however, reading product labels (48.9%) was second for them. Store loyalty cards (46.6%) came in at #3.

>Grocery shoppers “date around.” More than one-third (34.3%) of Kroger shoppers buy their health and beauty products at Wal-Mart. 22.5% of Safeway shoppers pick up their prescriptions at Walgreens.

>More than 75% of both Kroger and Safeway shoppers indicated that gas prices are impacting their spending. 28.8% of Kroger and 28% of Safeway shoppers said that they are spending less on groceries as a result of fluctuating gas prices.

BIGresearch arrived at this data by surveying 7,500-plus respondents and then averaging their responses together to obtain the percentages reported above. As with all survey research, remember you can generalize somewhat to the general population from a sample, especially a large one, but it isn't always the case.

Our key point in offering the Kroger and Safeway data from the research firm's survey isn't so much to give you that specific information or data, that's gravy. Rather, it's to illustrate the importance and power of obtaining retailer shopper-specific data both from specific retail chain's and outside sources, as well as garnering as much anecdotal information a marketer can from retail category managers, merchandising managers and local market region brokers, who have lots of experience setting up shopper marketing programs with specific chains.

Do this, and as a shopper marketing practitioner you will not only generate more trial of new products and increase promoted product sales during the shopper marketing campaigns, but you also will dramatically increase your ROI on each shopper marketing campaign you do.