retail news in context, analysis with attitude

Got the following email from Gary Hawkins, weighing in on the issue of targeted promotions and why broad-based print advertising and FSIs are not long for this world:

Kevin, your coverage of Safeway’s Just for U program and their desire to stop printing a weekly ad seems to have generated some good feedback. Thought I would join the fray...

As I called out in the recent NGA workshop, shopper data has been weaponized, often by the largest retailers able to employ teams of data analysts and sophisticated technology. Shopper insights, precision targeted promotions, and shopper-intelligent merchandising, are the weapons of choice. Safeway is ramping up digital engagement with their shoppers, driven by personalized savings, so as to finally drive a stake through the heart of the printed weekly ad flyer. The analogy is apt: Weekly ad flyers are the walking dead of the advertising world, marketing “zombies”.

If you overlay ad flyer distribution with actual shopper data from most any store you will find a shocking disparity between the number of flyers printed and distributed and the number of shopper households coming into the store in a given week. Retailers pay great attention to waste and shrink in their stores, the same attention and concern should be brought to the waste involved in flyers.

Going further, overlaying shopper data with most any given promotion in a retailer’s ad flyer shows how few shoppers in the store that week actually purchase the promotion. If you extend the analysis and consider the universe of shoppers in a retailer’s market that may receive or see the promotion and then calculate what portion of them actually come into the store and purchase the promoted item it is even more eye-opening.

Personalized marketing - like Safeway’s Just for U program, Kroger’s efforts, and the initiatives of many other big retailers that leverage shopper insights and precision targeting - is highly effective in driving significant gains in basket size, trip frequency, and retention over time. Giving each shopper savings on products he or she wants to buy and finds relevant is simple in concept, challenging in execution - but always powerful.

The results are well-proven; simply look at Kroger’s performance over the past decade since their partnership with dunnhumby, at Safeway’s statements, and what other retailers are doing. One need not look further than how brand manufacturers are spending their marketing funds: An increasing focus on digital, leveraging shopper data, and the ability to direct the right promotion to the right shopper at the right time and in the right place. The world is not changing - it has changed. Retailers today must drive digital engagement with their shoppers and leverage digital to provide relevant savings to each of their shoppers.

Regarding allegations that Anheuser-Busch InBev has been watering down its beer to save money, MNB user Jason Cunningham wrote:

I think that drawing parallels between the current Budweiser lawsuit, alleging criminal and intentional deception, and Maker's Mark 'test' of watering down their product is unfair.
Maker's Mark announced their change and allowed consumers to weigh in with their opinions.  One could argue that Maker's Mark should have had that discussion prior to actually making a change to their product, but to their credit, they switched back to the original formula and thanked their consumers for their valued input.
Budweiser, it is alleged, covertly decided to increase profits by deceiving their consumers and may have violated some labeling laws in the process.  As you often write; in today's world transparency is required.  No matter what, I'm sure Budweiser will struggle to regain the trust of its customers.

From another reader:

I agree that ABI is a reputable company.  I have a feeling that disgruntled employees that were let go are stirring the pot.
Marker’s Mark, was upfront about a recipe change. (this could have increased their profits per unit, since they would have paid less FET (Federal Excise Tax)
And, the alcohol excise tax is based on ABV (alcohol by volume) and the excise tax would be lower if there was less alcohol in the product.

And another:

...As to Maker’s Mark, correct me where necessary, had the good labeling sense to a priori identify the proposed reduced alcohol content. I don’t think it ever got beyond  Maker’s declaring their intention before  the public outcry forced them to come back to their senses.  I agree with you, I can’t believe AB would be so stupid as to not correctly identify alcohol content.

I said yesterday that it seems to me that a simple lab test could resolve this question, which led one MNB user to write:

Kevin, if people are actually suing -- hiring lawyers, preparing complaints, filing suit -- then they've already done the simple lab test you suggest.

You'd think so. But if you're right, and A-B is circling the wagons and just hoping to minimize the damage, then they're in bigger trouble than they realize.

From another reader:

I think honest beer drinkers should sue any one that drinks an A-B brand beer for defamation to true beer lovers…

And another:

I am outraged…… if this is proven to be true…..we’ll have to drink more beer to get the same effect!

To be clear about something I wrote yesterday, when I said the following...

I'm not ready to believe that A-B has done this ... Though I might have said the same thing a few weeks ago about Maker's Mark.

...I was not drawing a direct comparison between the actions between the two companies, but rather that sometimes my beliefs are challenged by reality, and that I need to keep an open mind that even big and great companies can screw up. I just used Maker's Mark because it was convenient, and water also was involved.

We had a piece yesterday about how consumer confidence is improving, according to the Conference Board, which led one MNB user to write:

Consumer confidence improving? …… Who are these people surveyed? Do any of them even fill their gas tanks or go to the grocery store? Have they looked at their paycheck stubs since the first of the year?

Maybe they're invested in the stock market...

And from MNB user Mark Heckman:

"Ignorance is bliss" I suppose.  

The more aware and engaged I am politically and with the economic fundamentals that drive our GDP and employment, this more pessimistic I become.  Perhaps I should learn to "whistle" and join the other confident consumers as we stroll past the graveyard!!

Remember...When you're chewing on life's gristle, don't grumble, give a whistle...

And finally, MNB user Dale Tillotson wrote:

I opened up MNB Wednesday and thought it was the daily racing form, from watered down Clydesdales, to the horse meat beef scandal, and then of course Kevin adds in his view the over/under of when horse meat will be found stateside.

Off to the track.

I feel a song coming on...

I got the horse right here
The name is Paul Revere
And here's a guy that says that the weather's clear
Can do, can do, this guy says the horse can do
If he says the horse can do, can do, can do.

For Paul Revere I'll bite
I hear his foot's all right
Of course it all depends if it rained last night.

Likes mud, likes mud, this X means the horse likes mud
If that means the horse likes mud, likes mud
Likes mud...
KC's View: