Earning Their Loyalty

Showrooming. RedLaser. Amazon Price Check. Same-day shipping. These terms and names have come seemingly out of nowhere and now top of the list of things that worry retailers. The entry of Walmart into grocery turned the retail food industry upside-down, but now Walmart is feeling the same pain as Amazon continues to make inroads on price with an expanded selection.

Operating a brick-and-mortar retail food store isn’t what it used to be. Shoppers are now armed with price information, deeper knowledge of products and the ability to find out just about anything about a product while standing in front of the shelf – including who might be selling it cheaper.

But although the competitive landscape has changed, there is more than one light at the end of this tunnel for traditional food stores. The fact is that much of the angst retailers are experiencing is of their own making. Price has been the primary – if not singular – communication from supermarkets for as long as anyone can remember. But cutting prices – especially in an industry operating on single-digit margins to start with – means that something’s gotta give. In this case, that something has been labor at the store.

Albert Einstein once said we can’t solve problems by using the same kind of thinking that we used when we created them. Although he was referring to lofty topics like energy and matter, it’s great advice for business, too. By focusing on price alone, retailers have conditioned shoppers to listen only for price messages and make most or all of their decisions based on that criterion.

Change the Topic

It’s also been said that if you don’t like what customers say about you, then change the conversation. It takes time, but perceptions can be changed if the message is relevant and feels genuine.

Changing the conversation in this case means talking about the entire value proposition instead of just price. It means integrating online and offline strategies so they drive the same outcomes and are complementary instead of at odds. More than a few retailers are still running their mobile marketing programs through the IT group, while everything else is done in the marketing department.

How do we start changing the conversation by taking the focus off price and promoting the overall value proposition instead? Three foundational steps are necessary to get things moving:

    • Begin with an end in mind. The end in this case is to determine how you want your customers to think about you and your brand. If you can’t be about price – and just to belabor the point, you can’t – then what will you stand for? There are myriad options, from service to selection to expertise, so pick one and make sure you can deliver on it.
    • Keep the shopper at the center. It’s always good to regularly review what’s being done and how it benefits the shopper. The larger the organization, the greater the likelihood that practices have developed to support internal needs, sometimes at the shopper’s expense.
    • Integrate the channels. Online and offline should appear seamless to your customers. Pricing for sure, but everything else, as well. The product images used online and in print need to be the same.
    • That last point can be tricky. Integrating customer touchpoints sounds great, but the practical application can be daunting, to say the least.
Marketing Evolved. Did You?

Most of the marketing vehicles retailers use today have evolved over time. Printed circulars still tend to carry the majority of the message. Targeted loyalty mailers have become more frequent as supermarkets have learned to use the data they collect. Websites and even social media have come along and added to the spectrum, offering numerous ways to connect to and even converse with shoppers. Mobile has complicated things further, and too often become an add-on when it should be the centerpiece of programs.

The difficulty for traditional retailers  has been in how to staff these new functions – oftentimes they were shoe-horned into existing departments without much long-term planning. Loyalty was generally run out of marketing, but the analytical skillsets weren’t available internally. Websites and mobile ended up in IT, as did most e-commerce efforts. Many of these outliers have moved into marketing, but too many remain disconnected.

Integrating the various disciplines means putting them under the same leadership to start. Next, perform a holistic review from the shopper’s perspective and make sure that he or she is seeing what you want the consumer to see from all angles and all media touchpoints. Critical to all of this is a guiding strategy to connect all the dots for the shopper, even when it means more effort and expense internally.

Is any of this easy? No. But sticking with the same old messages about price is a dead-end. Changing the conversation with shoppers requires understanding – and communicating – what you have to offer that truly sets you apart.

Jeff Weidauer is vice president of marketing and strategy for Vestcom International Inc., a Little Rock, Ark.-based provider of integrated shopper marketing solutions. He can be reached at jweidauer@vestcom.com, or visit www.vestcom.com.

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