Safeway’s CEO, Steve Burd touted just last week that their new and expanded CRM program “Just for U” is now reaching 55% of Safeway’s shopper base and doing extremely well. So well, he claims that perhaps, just perhaps by the end of this year, Safeway could actually stop printing a weekly circular and rely solely on the reach of “Just for U” to communicate its marketing programs and offers. It begs the question, “Are finally starting to see the “end days” of Big Paper”?
I refer to the weekly circular and the FSI as “Big Paper” due to the fact paper and printing comprised almost half of my entire annual advertising budget as a retail marketing and advertising VP. Image the savings or better yet, the re-purposing of these resources if we could eliminate the weekly circular? But I’ve heard all of this before. In fact pundits and prognosticators have long predicted the demise of the dreaded, inefficient weekly circular ad.
So what’s different this time. True, Safeway and their key competitor, Kroger seem to be on track to transition much of their promotional marketing content away from mass and to targeted, digital media. That’s significant and new. What is not new is that the rest of the playing field is either invested in EDLP programs, without access to a customer database, or is just too small to command the necessary brand content away from their the broad reach of their mass programs to the much smaller reach of their fledgling digital properties. In addition, Valassis and News America are in no hurry to stop their FSI presses. FSI’s are proverbial cash cows and they will not go down without a fight.
Then there is the issue of targeting. Aside from the costs savings of communicating digital versus paper, the most compelling reason to go digital is the ability to fluidly target and vary both content and pricing all the way down to the individual shopper. But to be able to effectively accomplish targeting, retailers need to address some very formidable obstacles which include;
1. Flexible targeting & modeling software capable of working fluidly across retail channels and customer touch points to include, email, social, POS, SMS, and proprietary Applications.
2. Intellectual property to effectively build targeting strategies that almost necessarily will involve CPG brands and their strategies.
3. A huge offer bank of content as best of class targeting infers that not everyone will see all the offers, just those relevant to them.
4. Highly active and updated email, SMS, and Social Media customer lists.
5. Connectivity between the targeted, digital communications and in-store messaging and signage. The majority of purchase decisions are still made in-store and close to the shelf and brands still covet the brand equity afforded them by traditional paper media. Digital needs this support to be truly effective.
Kroger and Safeway proudly tout they have accomplished much of the aforementioned list. For them, the death of Big Paper may be on the horizon. For many other retailers, much work is left to do before the Rain Forests are saved and the printing presses grind to a final stop.