Archive for April 30, 2015

Walgreens Drives Customer Engagement through Personalized Marketing | Loyalty360.org

Resource: Daily News

Walgreens Drives Customer Engagement through Personalized Marketing

By: Jim Tierney, Loyalty360   BACK TO RESULTS

Walgreens has a powerful loyalty program, Balance Rewards, which has a membership hovering around 130 million.Reaching that lofty status, from a membership perspective, didn’t happen over night.  Mindy Heintskill, Senior Director of Loyalty and Vendor Collaboration, Walgreens told attendees during her Tuesday session, “Driving Customer Engagement and Sales Growth through Personalized Marketing,” at the 8th annual Loyalty Expo presented by Loyalty360 – The Loyalty Marketers’ Association, that she started at the company around the time the Balance Rewards loyalty program launched in September 2012.“We’re getting great engagement in the loyalty program,” Heintskill said.

Why did Walgreens start Balance Rewards?  “We wanted to thank our customers and gain customer knowledge and customer behavioral data,” Heintskill said. “It’s important for us to focus on retaining best customers. Data is very important. Walgreens doesn’t make any assortment decisions without looking at customer data. We had the opportunity to be more personalized. We have a commitment to testing. What we’re doing now is very traditional. We have all kinds of tests going on through different forms and different channels. You can’t be customer-centric on your own.”

Source: Walgreens Drives Customer Engagement through Personalized Marketing | Loyalty360.org

 

MH-Comments.  The headline is somewhat buried in this article.  Ms. Heintskill is not only responsible for shopper loyalty, but also “vendor collaboration”.  Too many retailers have not transitioned their vendor partnerships from pure trade support to actually providing targeted content for their loyalty programs.  

This commitment by Walgreens is significant and will bode well for the continued success of their program.

Mobile, Mobile, Mobile

During a recent panel discussion* on the topic of digital coupons, I asked Ajay Amlani, General Manager and Founder of You Technology what his three top areas of priority in terms of increasing the efficacy and volume of digital coupons and content in the coming year.

His answer, without hesitation was adamantly

Mobile, Mobile and Mobile!

He went on to assert that the overwhelming penetration of smart phone ownership and increasing usage during the shopping journey should be enough provocation for anyone with a proactive marketing strategy to include a healthy dose of budget towards reaching shoppers via their mobile device somewhere within their shopping process.
 

Devising a cogent mobile strategy presents an array of choices mobileandtraditionaland complexities that are unknowns to even some of the most experienced marketers. Arguably, before retailers and brands get into specifics on mobile (smart phone) marketing, it should dovetail into a more traditional, comprehensive marketing strategy and a broader Omni-Channel Strategy as the neighboring graphic depicts.
 

While retailers are becoming increasing more comfortable with budgeting and executing Omni-Channel initiatives they are often done as tests or ad hoc. In turn these forays into new media are not strategically linked with more traditional merchandising and marketing programs.
 

So is it the case with Mobile Marketing. The following are quick points of consideration when building a mobile strategy.
 

  • A good place to start the process is to view mobile as a distinct medium to the shopper with the same stature of print, television, radio and outdoor. With an increasing number of shoppers using their smart phones to access circulars, deals, coupons, comparative pricing, and product availability, mobile deserves its own line item in the budget.
  • Secondly, gain an understanding of what is different about mobile vis-à-vis the other forms of communication. Establish the measurable elements associated with mobile and determine accordingly how success is measured. Clicks, Views, Open Rates and other new metrics are vital to understanding the basic level of engagement. If mobile marketing employs SMS texting,  email blasts or banner web advertising, benchmark successful engagement metrics in each of those elements. Be knowledgeable of what constitutes best of breed performance among your key competitors and retail channel.
  • Additionally, keep in mind that of all the Omni-Channel media, mobile is clearly the most pervasive as can serve as a connective tool to all the other facets of a marketing program or campaign. Consequently be prepared to measure impact of mobile communicated programs on sales, customer count, transaction size, category penetration and other traditional metrics. Without eventually correlating the impact of mobile programs with the metrics share holders and senior management value, even successful mobile programs can go unappreciated.
  • Finally, I think it wise to use mobile engagement as a means to better understand your shopper base. With each mobile engagement, be positioned to use the results of the engagement as a means to segment your shoppers. Knowing which shoppers and shopper profiles display a high propensity to engage via mobile is extremely valuable information as plans are made for future mobile outreach.

* From Panel Discussion at the Association for Coupon Professionals Conference, April 16, 2015 in San Antonio, TX

Fumbling at the Goal Line

Retailers often spend inordinate amounts of capital and expense in creating an inviting shopping environment.  Music, fixtures, terrazzo floors, digital signage and wall graphics are all meant to allure shoppers into the store and entice them into spending more.

shutterstock_120974128While all of this expense is well placed, its benefit can be negated in just a few minutes at the checkout line.  Calling upon a popular football analogy, it is tantamount to fumbling at the goal line after a productive long drive.  

Admittedly, checkout systems have improved.  Self checkout can be both a benefit for the shopper (especially one that does not crave interaction with an under trained, minimum wage associate) and the retailer’s labor expense.  However, shelf checkout, coupled with new, but slowly emerging mobile checkout technology, not withstanding, most checkout experiences are pretty much the same as they twenty years ago and they are often excruciatingly slow.

This is especially true in the food channel, where there are more tender options, frequent shopper codes, coupon types, pricing snafus, and numerous other situations that render being the “next one in line” an unforgettable adventure in frustration.

A recent VideoMining Study revealed that the average grocery shopping trip lasts only thirteen minutes, (without checkout time). While this is an average, and stock up trips last significantly longer,  the brevity of time spent on an average trip underscores the need to avoid the excessive time spent at the checkout.

Other studies show that time spent at the checkout ranges from market to market.  In very efficient markets, the checkout wait time can be as few as a minute or less.  In other markets, mostly in the Eastern region of the U.S., checkout wait times can be as long as eight minutes.

Key is keeping the in-store wait time as a very low percentage of the time spent in-store.  

Kroger is one of the leaders in the grocery channel addressing checkout wait times.  In most markets they offer a shopper monitoring system that tracks the number of shoppers that have entered the store and the time they entered.  Using average shopping times, they predict how many check lanes they will require at various times throughout the day.  This system announces this information on video monitor screens where both Kroger associates and shoppers can view the information.

Having a sufficient number of lanes open is indeed a key factor for keeping the checkout process from grinding to a halt.  Associate training is yet another.  Trained associates know the difference between an artichoke and a rutabaga. They understand the various tender types and do not need constant supervision assistance that freezes the line, as their training continues.

Without making the technical investment of a Kroger, retailers can “observe a lot by watching”.   Managing the front end of the store is a requisite for a smooth and shopper pleasing checkout experience. Waiting until lines are five and six deep in frustrated shoppers before opening new checkouts is not good front end management.  Retailers that have a management person with their sole responsibility centered on smooth checkout experience are winning this battle.

A shopper’s last impression of the shopping trip tends to set the tone for their overall experience.  Erring on the side of investing in excellent customer service on the front end will pay dividends in terms of customer satisfaction and their repeat business.

 

Finding the “Sweet Spot” with Digital Coupons

At the recent ACP Conference in San Antonio, I moderated an expert panel discussion on the topic of the status of digital coupons.  For example, coupons that are printed at home or loaded from a website or shopper app directly to the shopper’s retail frequent shopper card or account are defined as such.  As an entity, they are indeed growing in use and evolving in terms of their sophistication and consumer appeal.

As in all things related to the space of retail consumer marketing, I have found the proverbial “Venn Diagramsweetspot” to be helpful in defining both the current status and desired direction of an initiative.

To that end, the adjacent diagram spells out one approach to understanding the elements of digital coupon proliferation and success.

 

1.  Stakeholder ROI:  Namely retailers and brands must see the monetized benefits of creating and distributing paperless coupons as an alternative to other collaborative consumer cost containment methods.  These methods include the FSI (weekly inserted coupon books in Sunday paper), checkout coupons, on pack coupons, etc.

2.  Consumer Ergonomics:  Before any new medium can grow, it must be simple for the consumer to engage.  We all agree that cutting paper coupons out of the newspaper is sub-optimal for the shopper.  The hurdle for any replacement medium, particularly if it is digital, is answering the question….”Can it be engaged by the shopper easier than alternatives?”.

3.  Content:  While satisfactory conditions could exist for the first two aforementioned factors, without meaningful, relevant offers the shopper will not engage.  There must be offers and content aplenty that represents the critical mass of shopper demand.

Satisfying all three elements is critical in finding the “sweet spot” of success, enabling digital coupons to continue to grow in both distribution and redemption.  During our panel discussion, our experts from many of the leading marketing services that promote digital “couponing” offered their views on how the industry is doing vis-a-vis these three elements.

In short, most believe we are at a “departure point” in terms of retailer, brand, and consumer engagement of this new medium.  It is also true that most believe that there is much work to be done before the “sweet spot” is reached.

In the weeks following, I will expand on each of the three elements depicted in the diagram and offer guidance (from the experts) in an effort to expedite the growth and shopper engagement of this new “digitized” way of conveying savings from the brand to the retailer and on to the shopper.

 

mark heckman

 

 

 

From MorningNewsBeat–Michael Sansolo Reminds Us That “Price” is Not Always King

Price Wars, Global Lessons

By Michael Sansolo

The incredibly important role food retailing plays in people’s lives was placed in sharp focus last week in a reverse price war taking place far from the US.

Last Friday, discussion of a potential arms deal with Iran dominated news around the world, and nowhere was that topic as important as in Israel. Yet there was a secondary story in one of Israel’s major newspapers that focused squarely on supermarkets – especially because last Friday was the start of the Jewish holiday of Passover, a celebration that itself focuses squarely on food.

Thanks to numerous economic issues, Israeli shoppers are doing something very strange these days, according to the newspaper Haaretz: They are simply buying less food. That in turn is putting a squeeze on the country’s food retailers, causing them to discount ever more heavily in a failing attempt to win back sales.

As any retailer in the US knows, such policies lead to an additional problem in the form of falling profits. Plus, when everyone is discounting, no one is special or is gaining sales. So productivity measures are falling everywhere.

Israeli retailers responded with a strange marketing tactic.

To explain, virtually the entire industry abandoned price merchandising for the Passover holiday. No price breaks on chickens (usually a centerpiece in Israel), or the holiday’s key food, matzo, or on any of a wide range of products shoppers specifically buy for the eight-day holiday.

According to Haaretz, the trend started with the nation’s largest retailers and everyone down the line quickly followed suit.

What’s more, the supermarkets stopped advertising because they had no sales to trumpet and wanted to save on the cost of marketing. After being immersed in a bitter price war with new discount chains, Israeli food retailing has essentially gone cold turkey. Haaretz said consumers were noticing now – and buying less for the holiday – and one can only imagine how consumers will respond in the long run.

It likely won’t be pretty. At some point, one retailer is going to break from the pack and the war will get jump started.

The celebration of Passover focuses on discussion of a series of historical questions, starting with, “Why is this night different from all other nights?” When the inevitable Israeli price war begins, retailers there should ask themselves, “Why is this price war different from any other?”

The answer is that it is not. Price wars almost never are.

Countless price wars have demonstrated the futility of a race to the bottom. In the end, virtually everyone loses and customer loyalty is reduced to one special at a time. Through the years the more prudent approach of reducing costs to enable price savings, while enhancing differentiation has shown to work much better.

Here in the US, we are coming off a dreadful economic period and we, too, have ample numbers of discount invaders. However, the chains most beloved by shoppers, at least according to Consumer Reports, are those that seemingly found a way to carve a new path. Companies like Wegmans, Publix and Trader Joe’s top the list, thanks to their well-earned reputations for unique and highly pleasing shopping experiences. And all three did a strong job featuring price savings throughout the Great Recession.

You’d think that lesson would be global.