#ngashow19

Guest blog by David Kiehle, Senior Vice President and General Manager at Smart.Market, Inc.

Independent grocers are increasingly aware of the impact of industry disruption.

These retailers are facing a new landscape marked by emerging technologies, quickly changing consumer behaviors, and a wide range of traditional and nontraditional competitors building scale through acquisitions and organic growth.

This new environment creates challenges across the independents’ business, and a case in point is in marketing. Independents and their wholesalers are often lacking in resources and expertise. They typically don’t have big marketing budgets. Many don’t operate loyalty marketing programs. Most are without the teams of data analysts more typical of bigger chains. Some are still tied to weekly circulars that deliver the same offers across an entire market to an eroding base of newspaper subscribers.

How can independent retailers compete in this new environment with effective marketing resources and strategies?

Independents are expert at being relevant for their individual customer bases. However, increasingly they need to be on-target not just for their market as a whole, but for each household and each customer in that market. This requires a more sophisticated personalized approach to coupons and other offers, supported by technology. Independents often don’t know the best ways to get started down that path.

There are numerous methods to embracing personalized marketing, some effective, some not so effective. These employ a range of platforms, from digital to print. Independents need to ensure that a personalization strategy is really personal. That means it needs to be targeted to individual households and customers, rather than being merely a segmentation approach that addresses large groups of shoppers.

One of the most effective and cost-efficient personalization strategies is leveraging direct mail, a seemingly mature form of retail marketing, that can be transformed through data-driven personalization techniques to drive profits and traffic. Recent research from the Data & Marketing Association (DMA) shows personalized direct mail campaigns can increase ROI from three to 10 times compared to traditional strategies.

Ironically, personalizing direct mail often results in a hybrid approach between print and digital. It’s actually digitally-driven print marketing. This approach leverages the best of print and digital through a state-of-the-art process called personalized variable direct mail. It not only outperforms traditional campaigns, but consistently outpaces online digital efforts as well.

The result can be a game changer for independent grocers. Here are five ways this kind of personalization can transform marketing for independents.

1-Accelerate Response Rates: Personalized variable direct mail can deliver double-digit response rates consistently, which is markedly higher than traditional direct mail.

2-Capture Performance Analytics: A personalized data-driven program should be able to provide back-end analytics to measure scores of events across a marketing calendar. Ideally a retailer should be able to leverage a database to match consumer purchasing habits back to the individual household level for each store location. This enables the retailer to learn more about its current customers by location and identify others that have similar characteristics and behaviors.

3-Blunt Competitor Strategies: Personalized variable direct mail can be effective in battling a range of competitors, from big chains to hard discounters. Making use of this strategy can help to neutralize new market entries by competitors while at the same time rewarding valued repeat shoppers.

4-Redefine Trade Areas: This personalized approach helps to establish and grow a primary trade area. It’s common to achieve material increases in unique shoppers with each campaign.

5-Engage with Customers: The point of a personalized program is to connect directly with individual customers and households to boost basket sizes. It’s also geared to supporting new customer acquisition by understanding the similarities your core shoppers have with those who are not currently your customers. Marketing pieces can be customized for a wide range of demographics and other attributes to boost performance. This strategy can be particularly effective in gaining the loyalty of millennial shoppers, who are famously resistant to brand loyalty.

David Kiehle, Senior Vice President and General Manager at Smart.Market, Inc.

Guest post by Chris Cialone, Director of U.S. Sales Operations Wonder Rewards

Usually it’s the big chains that get the credit for leveraging the latest in technological innovations. We’re all used to seeing the splashy headlines announcing Kroger, Ahold or Amazon about to launch another new tech-centric feature or capability.  And it makes sense, one would think – the big guys have the big budgets, have innovation labs, and have R&D funding.  But independents have something the retailers don’t have – faster and nimbler decision-making abilities.

Unfortunately, many independents don’t capitalize on this strength, waiting instead for technology to filter down – and by then, customers aren’t as excited and any point of differentiation is long gone.

Today’s regional supermarket chains should find partners that can provide them a technological edge. Companies like Wonder Rewards, who have the ability to launch a turn-key, 100% digital loyalty marketing program that drives incremental sales by attract new customers, retaining the best customers, and offers up-sell and cross-sell opportunities.

Wonder Rewards uses transactional data to:

 Plan out a responsive customer journey

 Analyze data for insights and segmentation

 Design marketing campaigns using insights

 Execute those campaigns with offers and content in personalized texts, notifications or email

 Report on results, re-calibrate and optimize campaigns

What other technology is under-utilized by independents? Globalization. Technology has made the world smaller, it is now possible for a local grocery retailer to expand their customer base to include consumers in other countries, and these consumers LOVE American-made consumer packaged goods. There is a high trust factor to consumable products made in the US under stricter government safety regulations that exists outside of the US. Technology, like that made available to independents allows products sold by grocery retailers to be sold and delivered to the doorstep of millions of consumers in Asian countries. 

In another example of an attention-grabbing headline from a big chain, last August Kroger released a statement saying that “e-commerce enables Kroger to quickly scale to reach new customers and markets where we don't operate physical stores, starting with China.” And that the arrangement will “meet Chinese consumers' growing demand for high-quality, organic food products.”

Independent stores can now do the same with the Wonder Rewards online marketplace. You can expand the size of your customer base from your local market area to include millions of Chinese consumers who appreciate the value and quality of American made consumer package goods.  A logistic partner manages the process from product placement on the online marketplace to shipping direct to your new Chinese customer’s doorstep.

E1 Marketing Edge is an example of an emerging tech-centric company that can expand the size of independent retailers’ market from those within a reasonable driving distance to a global audience, regardless of language or culture. Interested? Stop by booth # 1204 at NGA to learn more.

Chris Cialone, Director of U.S. Sales Operations, Wonder Rewards

Twitter: @Chris_Cialone