December 4, 2007
BrainTrust Query: Can a supermarket do without a weekly ad circular?
Editor’s note: We received the following query from a director of operations at a small, independent grocery company. The author requested anonymity for competitive reasons. If you have your own query for our BrainTrust panel, address them to: info@retailwire.com
How many decide where to shop based on the prices in a traditional supermarket circular? Is it possible to get the same or better results with an in-store flyer? Or this combined with radio? As an independent operator with limited marketing funds, we need to justify every dollar spent, so I find myself asking these questions. I know a lot of my customers don’t even read our circular, which hurts – considering the thousands I spend on them each week. I would love to put more of this money into the price of a product or a new program or service.
I think the traditional supermarket ad is completely boring. They all look the same. Same cuts. Same prices. The most interesting ones are from Trader Joe’s, and they don’t even have pictures! Whole Foods does a good job, but I believe they’re still bi-weekly and in-store only.
What are we really gaining with our circular? My biggest competitor is a supercenter. They don’t have an ad…but they do post OUR ad, offering to match prices (or they remove an item, if we’re too cheap). If we somehow lure some of their shoppers over with our prices, will we really get long-term results or will it just be short-term sales gratification from low profit cherry pickers?
Discussion Questions: Can a supermarket successfully replace their weekly newspaper ad with an in-store/website flyer? If they used the money they would save in advertising and put it into mark-down, radio, in-store ad printing, and new programs or services, would they come out ahead? Would consumers end up tuning them out?
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I have been involved with grocery marketing in a variety of different companies and capacities for over 25 years. I have seen grocery chains, both large and small attempt to give up their weekly circular for TV, radio, promotions, EDLP strategies, web strategies…you name it. Every one of them has gone back to circulars within a matter of weeks.
Why is this? In order to understand this, you need to understand what consumers DO with the circulars. While some consumers, who are not price-sensitive, take the circular straight from the newspaper or mailbox to the recycle bin or the garbage, there are many who rely on it to make their purchasing decisions. Some consumers use it for menu planning for the week. They take advantage of specials to put together that weeks meals at a savings. Others use it to cherry pick specials and stock up on sale items. Others use it for comparison, just to make sure their favorite store is competitive on price. Because eating is something people have to do, there are those who make an art out of shopping specials to save money and the circular is their guide. TV, Radio, and Interactive have all made inroads in competing for grocery marketing dollars, but when all is said and done, if a grocer has just one method to get their message out, the last thing to go will be their circular.
I usually just toss the ads in the trash. Its so simple to go to Wal-Mart where they have adjusted their shelf price and they accept other competitors’ ads. If a store is going to advertise, they should only advertise items and services that are unique and special to their store. If there is nothing unique or special about their store then most likely they are on their way out, which is where many traditional grocers are heading. Really, those 10 for $10 ads look silly when you can go to Wal-Mart or Aldi, get the same or similar item for 89 cents and not have to use a frequent shopper card.
I certainly hope these flyers are expendable. They are part of what I see as a massive lack of creativity in retailing–simply pay the shopper to buy. And the people who are most responsive to this are not a very good source of profits, anyway. For the brands, it is more throwing of mud on the wall, hoping some of it sticks.
Has anyone ever tried pricing everything in their flyer 5% higher than the competition? My guess is that it would have about the same effect on sales, but a massive positive effect on profits. If someone knows someone who has tried this, I’d love to hear about it. (Always hoping I’m wrong, so I can quit going down a blind alley. :>)
The honest answer is “it depends.” It depends on all variables of the independent supermarket’s marketing mix–product, presence, pricing and promotion. If you are truly differentiated in a way shoppers value then eliminating or reducing frequency of the circular could free up marketing budget for more loyalty building activities, in-store, online or in your community.
Do you offer service the supercenter can’t? Are you a part of the community in a way a national chain can only hope to be? Is your parking lot truly easier to navigate? Is your staff friendlier? Are your products naturally tailored to the local wants and needs? Are your fresh products fresher? Is your butcher the best in town? Is your in-store environment cozier and more conducive to buying food? Do you offer cooking and recipe help? Are your prices respectable so the gap vs. the supercenter doesn’t insult customers and make them feel guilty for shopping in your store?
If you answered yes to enough of the above questions, it might be time to experiment with ditching the circular and shifting to more engaging and long term oriented promotions. We always recommend starting with some shopper understanding. Interscope’s advice is to hold some focus groups among your target shoppers and ask them how they use your circular and what would they rather have you spend the money on? Then test a few ideas to see what works.
In today’s world, think of the press you could get by using the local radio stations to announce you are ending all that wasted paper and putting the money into renovating your organic produce section or giving giving every shopper a reusable cloth grocery bag with your logo on it?
Some New York area supermarkets throw their flyers away because they want to reduce their loss leader sales volume. I’m also surprised by how many supermarkets don’t offer to email the weekly circular specials to their customers, since email costs a lot less than circulars, and there’s no reason to avoid doing both (circulars + email). Some supermarkets don’t even show the circulars on their web sites.
As for eliminating the circulars completely, it might be worthwhile to test some alternative tactics first. For example, circulars with fewer items and fewer pages for certain zones. Or posting the competition’s prices in the store, using shelf price marking. Very few American supermarkets use electronic shelf labeling, even though they reduce errors, customer complaints, and labor. Electronic or not, shelf labels can show the competition’s price, not just your price.
Another tactic: tell everyone for 4 weeks in advance that you’re “going paperless” for a 4 week test and see what happens.
Weekly ad flyers are very popular in certain demographics. When you analyze consumers in specific segments, the most important are in the golden years, when the consumer is trying to stretch their monthly budget or in a time of inflation when a family of four is trying to make ends meet. Here, eliminating the weekly sale flyer would be a mistake and would impact loyalty from conscious repeat consumers.
It is still amazing but in a recent conference seminar with 48 and over individuals, 30% had no access to internet. Therefore, their buying habits were dominated and persuaded by print media.
Various factors come into the equation when one considers the functionality of the weekly ad circular. I’ll briefly address just one factor: the shopper. A recent survey, albeit of Ontario grocery shoppers, showed that affluent and busy shoppers merely scan circulars. They are not looking for bargains because they have no time to go through the circular and are also looking for distinctive/quality products rather than mass/basic SKUs.
The same survey demonstrated that lower income consumers are more likely to go through circulars. Perhaps the answer, for grocers with a significant number of middle class shoppers, is to print a glossy circular with “quality” products or some semblance of that such as “masstige.”
I think the answer is “yes.” For so many supermarkets, the ad only emphasizes price, and this plays into the commoditization that until recently has hurt grocery. Digital and event-driven marketing would work well for supermarkets and assist in the evolution out of price-driven manipulation of consumers.
Most smaller and local stores have three sets of customer groups they should be marketing to;
1. Core customers who talk to the help, love the store, in this case use the circular and make the store management believe everything they do is perfect. Many stores make the mistake of aiming all their marketing towards this group that they already own and that they can take care of just by being there and continuing to “know their name.” Also they make the mistake of defining all customers in relation to this one group they know and understand when in fact in most situations they are becoming an anomaly.
2. Customers who shop the store but do not have the interest, the need, or the time to verbally communicate with store staff. They want a quick and efficient store that provides the right products in a quick and intelligent easy to shop manner. In store signage and marketing is very effective with this group and seldom provided. This group spends as much or more than core customers (who tend to be seniors on fixed income) but because they are not communicative with store staff, they are treated as second class citizens in spite of the fact that they carry first class money.
3. Customers who should be coming in the store but are not. These people are in the store’s target customer profile but have old perceptions or misperceptions of the store. Events and creative marketing need to be done and directed at this group to get them in the store and show that the store is now appropriate for them.
Note that none of the above is about circulars, which are an old, tired, boring, repetitive method of marketing and, unless you are in a low income community where savings are crucial to the shopper, it should not be a key part of a store’s marketing plan.
Yes, if you have the following three things:
1. A reason for being – do you have a clearly defined niche in the marketplace that is sustainable? Don’t kid yourself it has nothing to do with being the cheapest. HEB and their Central Market formats are anything but cheap.
2. Do you have a strong connection with your customers – are they raving fans of your store? It almost universally comes down to the people you have working and the charisma you create.
3. What is your primary vehicle for attracting new customers? You don’t need an ad but you need a hook. Trader Joe’s uses “Two Buck Chuck,” Costco uses their apple pie and the aura of mystery shopping. For you it might be your deli…is it a deli people will drive out of their way for? Do you get calls from people located far outside of your normal trading area?
If you can’t pass muster with each of the three above then you can go without a price oriented ad and you’ll save money short-term. The money you save you had better stash away because you’ll need it after you slowly but surely go out of business.
Do I think people read the supermarket circulars and use that information to decide where they are going to shop? Yes! My 80-year old mother does so every week. That is the problem. Circulars are so antiquated that they don’t allow you to connect with your core consumer.
You’d be better off spending money on building a great CRM program, and building a database of your loyal customers. Ask them when they would like to receive information regarding specials in your stores (early morning, afternoon, evening). Ask them how they would like to receive these notices (mobile phone, email, html newsletter, etc.). Ask them what types of specials they are interested in(prepared meals, produce, etc). And then deliver them the specials when they want them, and in the manner in which they want to receive them.
The tools are available. The supermarkets who choose to implement them will ultimately be the winners in the space.
You’d have to analyze your sales thoroughly to know the answer. Do shoppers who buy the sale items in a circular spend on higher margin items also? If so, yes keep the circulars. But if the majority of shoppers who buy the sale items choose only the sale items so that you make little to no profit, then you may be better off without the circulars. Your goal isn’t to maximize sales, it’s to maximize profits and for certain retailers, sacrificing circulars and the traffic they generate is the better way to increased profit margins.
As a male with family of 6 including a dog, owner of my own printing and retail loyalty marketing company, I would like to state this. In my 25 years as the primary cook and grocery shopper I have never put a circular anywhere but recycling. Maybe that is just me! But aren’t we all supposed to be turning green? Where is the outcry?
That is one of the reasons I started another company separate from my printing concern. If I were that grocer I would find a strong gas/convenience partner and start a coalition loyalty program. Offer cash reward rebates to consumers and then let them be split with a non-profit of the card holders choosing – thereby transferring one’s loyalty to a cause, onto the merchant. When is the last time anyone ever listed a retailer in the top 10 things they were most loyal to (if you do, you need to get a life)? I would stop trying to create loyalty to an offer and go about building loyalty to my brand. By partnering with other area merchants I would gain valuable marketing data, my consumers would carry fewer cards in their wallet and increase their earn velocity, non-profits and merchant partners would now most likely for the first time begin marketing my store. What a concept!
Yes, that is exactly what my other company does, but he asked–or maybe he should just do the same thing everyone else has done for the last 40 years.
These are exciting times for advertising as it seems it is the hottest business there is. There is no doubt that more and more ad dollars are being shifted into online including online circulars/flyers but the print channel will remain for some time. Even Google, which currently has a big sales effort aimed at shifting print ad dollars to online, has introduced an automated online auction-based print advertising placement product.
Given that, analytics can show that many times print ads are designed around outmoded methods (e.g. purely coop dollars, the “let’s do this year what we did last year,” etc.) which encourage customer behavior that is not efficient for the retailer’s goals and, in fact, netted out, is costing the retailer money. We have found that by segmenting customers and analyzing their purchases and linking them to detailed promotion history the number of pages in print ads could be reduced significantly, the items featured changed to support desired customer behavior and to productive items that help achieve marketing goals. In addition, the increased use of targeting and an integrated online/offline strategy can save a significant amount of printing costs and increase customer satisfaction while dramatically increasing basket size and profitability.
Have you ever seen anyone read one of these flyers?
Customers are harried, time-starved, and crave efficiency. They’ll shop where they want to, and will look for buys while they’re in the store. I think we’ll see better use of dynamic in-store promotions, and at some point retailers will deploy technologies that will help shoppers identify and find the products they want. Right now, it’s all low-tech–store employees who know me point me to great buys I might not have noticed.
As a CPG manufacturer analyst for the past 12 years, I would say I have mixed feelings on this article concerning in-store flyers.
I must first say that this retailer is one of the rare people who doesn’t cover the entire cost of printing from the manufacturer’s pocket. A large part of the company’s trade marketing budget has been spent on advertising in these in-store flyers and they are typically a source of revenue for the larger grocery chains. Additionally, many of the larger retailers have made it conditional that only those items in the in-store ad will receive display space (also at an additional cost). How would smaller brands receive consumer recognition if there were no in-store features?
As an analyst, I recommend the use of features as they provide a great deal of lift over TPR alone. Compare the amount of lift from a TPR to that of a Feature when price is equal and the difference can be dramatic. This retailer should be able to see the same thing (or ask one of his vendors to show him the data that proves it). This could justify his expense or, as many of the larger chains do, justify the expense the manufacturer pays.
From a consumer perspective, actual use of these flyers vary by region and demographic. This retailer may have a point that they are useless for his chain; but the guys across the street may have more success. The ruling factor should be sales lift–if features don’t provide it, no one should be paying for it.
Indeed, paper circulars are not the advertising “only game in town” they once were. And entire hardware store, appliance store, craft store and electronics store ad booklets do regularly end up in the trash because not everyone is looking to purchase a hammer, a fridge, yarn, or a new computer every week. But nearly every family buys food and household products once a week and grocery store circulars will continue to be productive and relevant for the foreseeable future.
Anyone who observes me in the store as I stock up on “loss leaders” can see all the other non-sale stuff I load into my cart as well. But, it was the circular and the sale items that got me to choose that particular store on that particular day in which to spend my money.
Mr. X may get nothing from the responses, but I’ve added several acronyms to my vocabulary!
Back on topic, my FWIW is that, yes my household pays attention to the flyer, though not to the extent of changing where we shop. I can’t see an email or in-store flyer having the same impact (the former being deleted, and the latter not being convenient.)
As to whether or not to advertise specials: if you’re going to put things on sale, it’s (presumably) with the intention that people will buy them, and they won’t if they’re not aware of them.
I’ve long thought of ad circulars as just a way for retailers to get money from branded manufacturers, with inflated price for the little photo and all the time and effort it took to put it together. 😉 It would of course depend on the local demographic, but I’d be tempted to eliminate circulars, call a press conference to announce it, saying I wanted to Save the Earth, and would put all the money saved from the circulars into hiring another body or two to provide better service for my time-crunched shoppers. I’d encourage other supermarkets to do the same (they wouldn’t, but the press would love it) and beat the drum to establish differentiation.
To make a decision on whether or not to continue the circular you need to know your consumers. When coupons were eliminated a number of years ago by several manufacturers as a promotion item with much waste, there was such a hue and cry from those who wanted the coupons that they came back–in a slightly different form for the most part.
Are your consumers the ones who choose to patronize your store because of reading the circular? If yes, then eliminating it will hurt your business. If no, then eliminating it will not hurt your business if your loyal profitable consumers continue to choose your store.
Do you know why your loyal profitable consumers choose your store? That’s the question that needs to be answered before making your decision to continue the flyers or to use some other type of creative promotion.
To me that the most effective of all food retail advertising is not in printed ads, flyers or circulars but in any UNIQUE visuals, “feelings” and comfort that a consumer experiences when in the store whether they be created by value, pricing or quality. But ads do have supplemental value.
Good retailers work on developing warm in-store fuzzies with their customers with what and how they present in their stores more than what they present in any ads. A good retailer knows that creating a “sense of belonging” with customers is retailing best–and most profitable–friend.
I agree with Bernie. We receive tons of these in the newspapers and the mail and they end up going right into the recycle bin. This can and should be eliminated. I think that for most shoppers, especially with the price of gas, it just doesn’t make sense to drive to another store because of the price on certain items. I believe it all balances out in the end. Place the circular at the entrance of the store or be really green by simply utilizing signage that can be reused over and over. Another way to get the message out is to do old fashioned announcements over the PA. Corny maybe, but it saves lots of trees.
The circular/flyer is not going away, anytime soon. It’s wishful thinking.
The retail grocer ad is almost as old as newspaper advertising itself.
What it has blossomed into, is a 12 to 16 page 4 color display of weekly specials, markdowns, information, and meal planning ideas.
While most of you, for reasons I can’ understand, throw them away, there are millions of other loyal shoppers who comb the ads weekly for the best buys they can get, and even some, invest a little extra time pairing coupons with the advertised items to save even more.
Long live the circular/flyer, in whatever form it evolves.
When it comes to the weekly flyer about what’s on sale at the local supermarkets, as a bargain shopper, I always check to see who has the better deal. I live 15 miles outside of two different towns North and South of me. I don’t want to travel in either direction if I can find what I want at the local–buy it all–Shurfine that’s within 4 miles of my home.
If those chain stores want my business, they’ll have to have something I need, cheaper than what that local convenience grocery store has. With the high cost of gasoline these days, who wants to travel 30 miles round trip for milk? Not me! They have to show me what they have on sale to get me to go out of my way, and shop at those stores.
My family is not lower income and we shop the circulars for deals before we go to the store. In our area, there are at least 4 different options for stores within 3 miles of our house. We look at the price of bread and milk as well as the things we normally buy. Our purchase decision is based on the fliers that land in our mailbox on Wednesday every week.
I agree with Ken. Perceived EDLP operators have no use for a circular.
Pricey, alternative “value-add” grocers need to push out circulars or another form of identifying promotions/events to its secondary markets. For example, I wish I always did my shopping at Wild Oats, but frankly, it’s just too pricey. However, I often scan the circular to see what department is offering a >=25% promotion. If the promotion is perceived as a “deal,” that generally triggers a visit to the store.
Hi-Lo grocers that do little to differentiate themselves from the crowd…need a little more help than a weekly circular. These circulars (e.g., Albertsons, Kroger) generally end up in the recycling bin.
Say it isn’t so! Reading the flyers is a Saturday morning tradition at our house and I’m sure I’m not alone. Circulars are an important communication tool as opposed to a marketing tool. One of the big grocery chains uses the weekly ad to communicate new products as well. I like the idea of online flyers but it should be a separate set of specials or promos. I don’t believe chains would benefit from dropping a paper circular.
I noticed that most of the responders to this are men–and are probably not the primary shopper in the family, however, their opinions are valid.
As the primary shopper in my family, I feel that an independent grocery store can definitely get hurt by not running a circular. I plan my weekly menu’s from the ad, not only by price but also for the ideas it gives me as well. I have a primary store I shop in, but will often go between two. The chain is my primary choice, but if the independent has some good values on items I want to buy that week, I will make the switch. Super Target and Wal-Mart do not always have everything I want as far as brands, etc. Without ads at the local chain and the independent, I would probably go to the superstore more often. But I agree–don’t make the ad all about product and price. Give meal ideas, recipes, and services. Show us why you offer more than price…anyone can do that.
It’s interesting how almost all postings here are either opinion or based on personal experience. Doesn’t anyone have any data?
In our category-specific shopping styles database, we know that the level of agreement with the statement “I will go out of my way to shop at a store that has the lowest price” can vary greatly depending on the product category (can be as high as 50%+). If that is true, how would they know who has the best price in a given week without circulars?! While shoppers aren’t SystemBeaters to every category, those categories that are most likely to draw traffic based on price should be featured and some version of circulars still seems like a good way to do it.
In my household we rarely look at the circulars, for several different supermarkets, when it comes either in the mail or with the newspaper. It has absolutely no bearing as to which supermarket we frequent. We go to the one that we know and have developed a comfort. On the other hand, when in the store we might look at the circular…after all, who doesn’t like to save some money. Saving $.50 on an item won’t make me change where I shop.
As long as the “Boomer” segment remains viable and relevant, flyers will not go away any time soon. Though they are apt to be flexible and try new things, their comfort lies in what they know and what their parents knew to be the way to shop.
My experience working with a small Independent chain in Rhode Island taught me that playing with your advertising tactics can be rewarding but it can also be very risky.
For them (and their customers) flyers are and will likely continue to be a very relevant way of life. Try to take away that flyer from even one region you think is not a contributing factor to your store and you will here it from them.
However, it isn’t just a “Boomer” mentality, it is a price conscious mentality as well. Urban, working class lifestyles depend on these ads for pantry stuffing events.
All that said, in time they will most definitely evolve, the question is how?
Certainly with the emergence of “green” awareness, the decreasing cost effectiveness of traditional mass marketing, and the emergence of a number of in-store technologies, it feels safe to say that circulars will have a diminishing share of the supermarket advertising/marketing budget.
As a provider of digital signage solutions, I do have a dog in this hunt as another responder aptly put it, but it is clearly not a one-for-one tradeoff here. Retailers will continue to challenge themselves on how to build brand and bring people through the door. Once inside, it has become clear that the real marketing takes place: demonstrations and sampling, shelf level couponing, merchandising techniques, CRM programs and yes, even digital signage. What is at stake here is the actual mix that will emerge, and clearly that will vary based upon a retailer’s unique (or perceived-to-be-unique) positioning.
Circulars will not disappear entirely, but their share of the budget will be reduced as retailers focus efforts on in-store messaging and programs.
Hot ads or a high-low strategy can be successful but once you start it you are attracting customers with a drug that is hard to kick. Look what happened to Kmart when they tried to give up the ads…bankruptcy. A less expensive way to to get your specials to the customer is on your web page. Ukrop’s seems to be doing a great job at this. Check with them and see how they do it.
If you want to go the EDLP route you must figure about a year for your trade area to figure it out.
The most successful retailers getting my money, which feeds a family of six, get my attention with a few loss leaders in an email ad that are supplemented by the full flyer we pick up as we enter the store. This works for my demographic, but would need to be tested in others before dropping the circular entirely.
Interesting to note that you got more comments about this in a shorter period of time than most topics. Couple of thoughts:
A few years ago I was running marketing and merchandising for a chain many would argue is the best in the country. In a board meeting there, the COO began talking about how nobody read ads anymore and that we should save the money and go in-store. The group followed his comments quickly…. To which I responded with (turns out this wasn’t smart politically), “If you really believe no one reads ads, let’s run t-bone steaks for 99 cents.” After the laughter stopped and the COO turned back from red faced to normal, the group got the point. It’s a matter of what you do with it.
Secondly, the ad is also a reflection of your brand. It’s a price message, but it is a brand message too. Many people move to the market each year and this is the first point of contact with who you are. And…if we could all get together and not run them, that would be one thing. As long as the competition runs them, you cannot allow them to have a weekly dialog with your/the customer base without you.
Plus, I think you have to be careful as an affluent, college educated person to not assume everyone shops like you. There are a lot of people out there who depend on the savings that the ad provides.
As an independent supermarket owner, I can speak on this subject for hours. Most of the experts whose opinions I’ve read are no longer in the trenches day to day, as I am. A circular is necessary for several reasons.
1. A store must advertise key items in order to get “any deal” from the big manufacturers. You must advertise in order to stay competitive, because the food giants insist on an ad to get the performance bill-backs, which are crucial to buying right!!!
2. My community looks forward to all of our great meat and deli deals, which is our niche. By increasing the amount of space in our ad, it has allowed us to grow in a very tough economy.
3. Attending the NGA convention every year allows me to see how effective a great ad can be, and I study all angles to keep my ad fresh with new ideas.
4. The circular I also e-mail to customers weekly, along with internet only deals as well. Therefore, I agree with those who believe that the internet is quite useful.
5. You can run an ad that features your specialties, and allow people to see the difference in print.
6. Print ads can be brought into the store, as many of them do to plan their weekly shopping. You can’t carry a radio ad with you.
7. Another big advantage to print ads is that I can put in a last minute killer deal the day before I go to print, without any problem. It gives me a huge advantage to change course quickly, which gives me a huge edge over the methodical, slower moving big stores.
8. And last… I believe that an aggressive uncluttered circular that is fresh with ideas, and strong in quality perishables will always be welcomed by a community that relies on value, price and, yes, good service, which we not only advertise, but actually give.
The weekly circulars need to be evaluated as a media vehicle to communicate the weekly discounts. If you are a genuine EDLP operator, you won’t have weekly specials, so you can easily dump the circular. If, however you do use weekly discounts to encourage customers to visit your store, then you’ve got to figure out the best and most effective way to make sure customers know about the deals you have.
Even though my company is focused on the electronic side of weekly circulars, with targeted emails and personalized web sites, I still see a role for the printed weekly ad as a key part of the media mix for most retailers. But might it be just as effective with fewer pages? Does it need to be sent to every zip code in the area? Perhaps a smaller, more focused ad might be just as effective, with significantly lower costs.
While it’s easy to say that service and everyday low prices is the best way to win business, the reality is that for most retailers weekly specials are a part of their competitive arsenal. Instead of dumping it altogether, consider how to make it more efficient and more effective.
I have no dog in the hunt. But will just say as a customer, I buy a lot from the ad. In our area, the 2 major players are Kroger and Wal-Mart.
Kroger does an effective job with their ads. Wal-Mart does not. I probably would not shop at Kroger if it were not for the ad, because I have the perception that Wal-Mart is lower on most items. So if Kroger did away with the ad, I probably would not shop there on a regular basis.
So, I think the ads are extremely valuable if they are used effectively.
Weekly circulars are a carry over from mass marketing. Weekly advertising and circulars have been the foundation for High/Low operators. Every day low price retailers do not use weekly circulars and many successful smaller retailers don’t either.
The issues are how best to communicate with your target consumer and what to communicate. Most retailers should spend a little more money building their image and less on just price reductions. The future is targeted communication. Direct mail and email based on Frequent Shopper information is making progress. Kiosks linked to Frequent Shopper cards are being tried. The issue here is getting the customer to visit the kiosk. Future is direct communication via cell phone. Yes, the weekly circular has been a profit center for retailers, but suppliers are more than willing to spend on target over mass communication.
If you drop by the post office and look in the trashcans, you see literally hundreds of supermarket tabloids in there. Take a few seconds and watch people file out of the post office and watch them dump the entire pullout sections in the trash. What a waste of advertising dollars. For my small business, radio works best! It delivers me customers as they are on their way to the stores. They have purchasing on their minds.
Seeing that all retailers are NOT Wal-Mart, which has re-defined EDLP, no retailer that I have seen in 35 years has been an EDLP retailer. Therefore, the weekly ad is very important to them. The market area needs to be redefined and tightened to make sure you are getting the most for your dollar. My wife and myself are the only ones at home now, but my wife still uses weekly ads from retailers to shop. Most consumers that make under $100k a year use weekly ads. Most over $100K do not. The research is out there to support this.
Look at your marketing area at max 25 miles. Most shoppers shop with in 5 miles of their homes and as gas prices increase this will shorten again. Offer your customers , service with a fair price and push that in your ad as well. Make absolutely sure that you put your dollars into your labor service cost. The ROI is great.
Remember, “If you take care of your customers, they will take care of YOU!”
Personally, I would say no, never, never, never. Get that snail mail out of my face. But you’ve got to consider everybody all the time. When they stop publishing books then they should stop publishing circulars.
That colorful paper sits there in people’s homes month after month in places quiet from the constant pull of a computer, waiting with their ideas. People are different when intentionally pulling information and unintentionally finding it.
But the circulars should have more ideas (recipes, holiday, diet, budget, life advice, ways to find sales favorable to both the customer and the retailer). Let them sit longer.
A small store in my community has tried this. They recently switched from being part of a chain of franchised grocery stores to an independent. As such, they cut out their weekly circular.
As a shopper, I am not motivated to go to the store to walk around and see what they have that’s on sale. It’s not a productive use of my time. I think as a result of this move, they seem to be suffering from traffic loss in store. This can be seen in several ways including fewer cars parked outside the store than in the past, dead aisles, and expired product on the shelf.
In my line of work, I know my board members rely heavily on weekly circulars to put together the best shopping deals for their families. If stores quit with circulars, people would obviously still shop, but I think they would be more conservative in their approach about how they spend money. 10/$10 type offers, in-ad coupons that can be matched with manufacturer’s coupons, and cross marketing promotions (like get a free DVD when you buy type offers) are wildly popular with shoppers. And if there are multiple chains in the area, a circular is a great way to stay competitive. People do cross compare to see who has the best deal on oatmeal this week.
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I have been involved with grocery marketing in a variety of different companies and capacities for over 25 years. I have seen grocery chains, both large and small attempt to give up their weekly circular for TV, radio, promotions, EDLP strategies, web strategies…you name it. Every one of them has gone back to circulars within a matter of weeks.
Why is this? In order to understand this, you need to understand what consumers DO with the circulars. While some consumers, who are not price-sensitive, take the circular straight from the newspaper or mailbox to the recycle bin or the garbage, there are many who rely on it to make their purchasing decisions. Some consumers use it for menu planning for the week. They take advantage of specials to put together that weeks meals at a savings. Others use it to cherry pick specials and stock up on sale items. Others use it for comparison, just to make sure their favorite store is competitive on price. Because eating is something people have to do, there are those who make an art out of shopping specials to save money and the circular is their guide. TV, Radio, and Interactive have all made inroads in competing for grocery marketing dollars, but when all is said and done, if a grocer has just one method to get their message out, the last thing to go will be their circular.
I usually just toss the ads in the trash. Its so simple to go to Wal-Mart where they have adjusted their shelf price and they accept other competitors’ ads. If a store is going to advertise, they should only advertise items and services that are unique and special to their store. If there is nothing unique or special about their store then most likely they are on their way out, which is where many traditional grocers are heading. Really, those 10 for $10 ads look silly when you can go to Wal-Mart or Aldi, get the same or similar item for 89 cents and not have to use a frequent shopper card.
I certainly hope these flyers are expendable. They are part of what I see as a massive lack of creativity in retailing–simply pay the shopper to buy. And the people who are most responsive to this are not a very good source of profits, anyway. For the brands, it is more throwing of mud on the wall, hoping some of it sticks.
Has anyone ever tried pricing everything in their flyer 5% higher than the competition? My guess is that it would have about the same effect on sales, but a massive positive effect on profits. If someone knows someone who has tried this, I’d love to hear about it. (Always hoping I’m wrong, so I can quit going down a blind alley. :>)
The honest answer is “it depends.” It depends on all variables of the independent supermarket’s marketing mix–product, presence, pricing and promotion. If you are truly differentiated in a way shoppers value then eliminating or reducing frequency of the circular could free up marketing budget for more loyalty building activities, in-store, online or in your community.
Do you offer service the supercenter can’t? Are you a part of the community in a way a national chain can only hope to be? Is your parking lot truly easier to navigate? Is your staff friendlier? Are your products naturally tailored to the local wants and needs? Are your fresh products fresher? Is your butcher the best in town? Is your in-store environment cozier and more conducive to buying food? Do you offer cooking and recipe help? Are your prices respectable so the gap vs. the supercenter doesn’t insult customers and make them feel guilty for shopping in your store?
If you answered yes to enough of the above questions, it might be time to experiment with ditching the circular and shifting to more engaging and long term oriented promotions. We always recommend starting with some shopper understanding. Interscope’s advice is to hold some focus groups among your target shoppers and ask them how they use your circular and what would they rather have you spend the money on? Then test a few ideas to see what works.
In today’s world, think of the press you could get by using the local radio stations to announce you are ending all that wasted paper and putting the money into renovating your organic produce section or giving giving every shopper a reusable cloth grocery bag with your logo on it?
Some New York area supermarkets throw their flyers away because they want to reduce their loss leader sales volume. I’m also surprised by how many supermarkets don’t offer to email the weekly circular specials to their customers, since email costs a lot less than circulars, and there’s no reason to avoid doing both (circulars + email). Some supermarkets don’t even show the circulars on their web sites.
As for eliminating the circulars completely, it might be worthwhile to test some alternative tactics first. For example, circulars with fewer items and fewer pages for certain zones. Or posting the competition’s prices in the store, using shelf price marking. Very few American supermarkets use electronic shelf labeling, even though they reduce errors, customer complaints, and labor. Electronic or not, shelf labels can show the competition’s price, not just your price.
Another tactic: tell everyone for 4 weeks in advance that you’re “going paperless” for a 4 week test and see what happens.
Weekly ad flyers are very popular in certain demographics. When you analyze consumers in specific segments, the most important are in the golden years, when the consumer is trying to stretch their monthly budget or in a time of inflation when a family of four is trying to make ends meet. Here, eliminating the weekly sale flyer would be a mistake and would impact loyalty from conscious repeat consumers.
It is still amazing but in a recent conference seminar with 48 and over individuals, 30% had no access to internet. Therefore, their buying habits were dominated and persuaded by print media.
Various factors come into the equation when one considers the functionality of the weekly ad circular. I’ll briefly address just one factor: the shopper. A recent survey, albeit of Ontario grocery shoppers, showed that affluent and busy shoppers merely scan circulars. They are not looking for bargains because they have no time to go through the circular and are also looking for distinctive/quality products rather than mass/basic SKUs.
The same survey demonstrated that lower income consumers are more likely to go through circulars. Perhaps the answer, for grocers with a significant number of middle class shoppers, is to print a glossy circular with “quality” products or some semblance of that such as “masstige.”
I think the answer is “yes.” For so many supermarkets, the ad only emphasizes price, and this plays into the commoditization that until recently has hurt grocery. Digital and event-driven marketing would work well for supermarkets and assist in the evolution out of price-driven manipulation of consumers.
Most smaller and local stores have three sets of customer groups they should be marketing to;
1. Core customers who talk to the help, love the store, in this case use the circular and make the store management believe everything they do is perfect. Many stores make the mistake of aiming all their marketing towards this group that they already own and that they can take care of just by being there and continuing to “know their name.” Also they make the mistake of defining all customers in relation to this one group they know and understand when in fact in most situations they are becoming an anomaly.
2. Customers who shop the store but do not have the interest, the need, or the time to verbally communicate with store staff. They want a quick and efficient store that provides the right products in a quick and intelligent easy to shop manner. In store signage and marketing is very effective with this group and seldom provided. This group spends as much or more than core customers (who tend to be seniors on fixed income) but because they are not communicative with store staff, they are treated as second class citizens in spite of the fact that they carry first class money.
3. Customers who should be coming in the store but are not. These people are in the store’s target customer profile but have old perceptions or misperceptions of the store. Events and creative marketing need to be done and directed at this group to get them in the store and show that the store is now appropriate for them.
Note that none of the above is about circulars, which are an old, tired, boring, repetitive method of marketing and, unless you are in a low income community where savings are crucial to the shopper, it should not be a key part of a store’s marketing plan.
Yes, if you have the following three things:
1. A reason for being – do you have a clearly defined niche in the marketplace that is sustainable? Don’t kid yourself it has nothing to do with being the cheapest. HEB and their Central Market formats are anything but cheap.
2. Do you have a strong connection with your customers – are they raving fans of your store? It almost universally comes down to the people you have working and the charisma you create.
3. What is your primary vehicle for attracting new customers? You don’t need an ad but you need a hook. Trader Joe’s uses “Two Buck Chuck,” Costco uses their apple pie and the aura of mystery shopping. For you it might be your deli…is it a deli people will drive out of their way for? Do you get calls from people located far outside of your normal trading area?
If you can’t pass muster with each of the three above then you can go without a price oriented ad and you’ll save money short-term. The money you save you had better stash away because you’ll need it after you slowly but surely go out of business.
Do I think people read the supermarket circulars and use that information to decide where they are going to shop? Yes! My 80-year old mother does so every week. That is the problem. Circulars are so antiquated that they don’t allow you to connect with your core consumer.
You’d be better off spending money on building a great CRM program, and building a database of your loyal customers. Ask them when they would like to receive information regarding specials in your stores (early morning, afternoon, evening). Ask them how they would like to receive these notices (mobile phone, email, html newsletter, etc.). Ask them what types of specials they are interested in(prepared meals, produce, etc). And then deliver them the specials when they want them, and in the manner in which they want to receive them.
The tools are available. The supermarkets who choose to implement them will ultimately be the winners in the space.
You’d have to analyze your sales thoroughly to know the answer. Do shoppers who buy the sale items in a circular spend on higher margin items also? If so, yes keep the circulars. But if the majority of shoppers who buy the sale items choose only the sale items so that you make little to no profit, then you may be better off without the circulars. Your goal isn’t to maximize sales, it’s to maximize profits and for certain retailers, sacrificing circulars and the traffic they generate is the better way to increased profit margins.
As a male with family of 6 including a dog, owner of my own printing and retail loyalty marketing company, I would like to state this. In my 25 years as the primary cook and grocery shopper I have never put a circular anywhere but recycling. Maybe that is just me! But aren’t we all supposed to be turning green? Where is the outcry?
That is one of the reasons I started another company separate from my printing concern. If I were that grocer I would find a strong gas/convenience partner and start a coalition loyalty program. Offer cash reward rebates to consumers and then let them be split with a non-profit of the card holders choosing – thereby transferring one’s loyalty to a cause, onto the merchant. When is the last time anyone ever listed a retailer in the top 10 things they were most loyal to (if you do, you need to get a life)? I would stop trying to create loyalty to an offer and go about building loyalty to my brand. By partnering with other area merchants I would gain valuable marketing data, my consumers would carry fewer cards in their wallet and increase their earn velocity, non-profits and merchant partners would now most likely for the first time begin marketing my store. What a concept!
Yes, that is exactly what my other company does, but he asked–or maybe he should just do the same thing everyone else has done for the last 40 years.
These are exciting times for advertising as it seems it is the hottest business there is. There is no doubt that more and more ad dollars are being shifted into online including online circulars/flyers but the print channel will remain for some time. Even Google, which currently has a big sales effort aimed at shifting print ad dollars to online, has introduced an automated online auction-based print advertising placement product.
Given that, analytics can show that many times print ads are designed around outmoded methods (e.g. purely coop dollars, the “let’s do this year what we did last year,” etc.) which encourage customer behavior that is not efficient for the retailer’s goals and, in fact, netted out, is costing the retailer money. We have found that by segmenting customers and analyzing their purchases and linking them to detailed promotion history the number of pages in print ads could be reduced significantly, the items featured changed to support desired customer behavior and to productive items that help achieve marketing goals. In addition, the increased use of targeting and an integrated online/offline strategy can save a significant amount of printing costs and increase customer satisfaction while dramatically increasing basket size and profitability.
Have you ever seen anyone read one of these flyers?
Customers are harried, time-starved, and crave efficiency. They’ll shop where they want to, and will look for buys while they’re in the store. I think we’ll see better use of dynamic in-store promotions, and at some point retailers will deploy technologies that will help shoppers identify and find the products they want. Right now, it’s all low-tech–store employees who know me point me to great buys I might not have noticed.
As a CPG manufacturer analyst for the past 12 years, I would say I have mixed feelings on this article concerning in-store flyers.
I must first say that this retailer is one of the rare people who doesn’t cover the entire cost of printing from the manufacturer’s pocket. A large part of the company’s trade marketing budget has been spent on advertising in these in-store flyers and they are typically a source of revenue for the larger grocery chains. Additionally, many of the larger retailers have made it conditional that only those items in the in-store ad will receive display space (also at an additional cost). How would smaller brands receive consumer recognition if there were no in-store features?
As an analyst, I recommend the use of features as they provide a great deal of lift over TPR alone. Compare the amount of lift from a TPR to that of a Feature when price is equal and the difference can be dramatic. This retailer should be able to see the same thing (or ask one of his vendors to show him the data that proves it). This could justify his expense or, as many of the larger chains do, justify the expense the manufacturer pays.
From a consumer perspective, actual use of these flyers vary by region and demographic. This retailer may have a point that they are useless for his chain; but the guys across the street may have more success. The ruling factor should be sales lift–if features don’t provide it, no one should be paying for it.
Indeed, paper circulars are not the advertising “only game in town” they once were. And entire hardware store, appliance store, craft store and electronics store ad booklets do regularly end up in the trash because not everyone is looking to purchase a hammer, a fridge, yarn, or a new computer every week. But nearly every family buys food and household products once a week and grocery store circulars will continue to be productive and relevant for the foreseeable future.
Anyone who observes me in the store as I stock up on “loss leaders” can see all the other non-sale stuff I load into my cart as well. But, it was the circular and the sale items that got me to choose that particular store on that particular day in which to spend my money.
Mr. X may get nothing from the responses, but I’ve added several acronyms to my vocabulary!
Back on topic, my FWIW is that, yes my household pays attention to the flyer, though not to the extent of changing where we shop. I can’t see an email or in-store flyer having the same impact (the former being deleted, and the latter not being convenient.)
As to whether or not to advertise specials: if you’re going to put things on sale, it’s (presumably) with the intention that people will buy them, and they won’t if they’re not aware of them.
I’ve long thought of ad circulars as just a way for retailers to get money from branded manufacturers, with inflated price for the little photo and all the time and effort it took to put it together. 😉 It would of course depend on the local demographic, but I’d be tempted to eliminate circulars, call a press conference to announce it, saying I wanted to Save the Earth, and would put all the money saved from the circulars into hiring another body or two to provide better service for my time-crunched shoppers. I’d encourage other supermarkets to do the same (they wouldn’t, but the press would love it) and beat the drum to establish differentiation.
To make a decision on whether or not to continue the circular you need to know your consumers. When coupons were eliminated a number of years ago by several manufacturers as a promotion item with much waste, there was such a hue and cry from those who wanted the coupons that they came back–in a slightly different form for the most part.
Are your consumers the ones who choose to patronize your store because of reading the circular? If yes, then eliminating it will hurt your business. If no, then eliminating it will not hurt your business if your loyal profitable consumers continue to choose your store.
Do you know why your loyal profitable consumers choose your store? That’s the question that needs to be answered before making your decision to continue the flyers or to use some other type of creative promotion.
To me that the most effective of all food retail advertising is not in printed ads, flyers or circulars but in any UNIQUE visuals, “feelings” and comfort that a consumer experiences when in the store whether they be created by value, pricing or quality. But ads do have supplemental value.
Good retailers work on developing warm in-store fuzzies with their customers with what and how they present in their stores more than what they present in any ads. A good retailer knows that creating a “sense of belonging” with customers is retailing best–and most profitable–friend.
I agree with Bernie. We receive tons of these in the newspapers and the mail and they end up going right into the recycle bin. This can and should be eliminated. I think that for most shoppers, especially with the price of gas, it just doesn’t make sense to drive to another store because of the price on certain items. I believe it all balances out in the end. Place the circular at the entrance of the store or be really green by simply utilizing signage that can be reused over and over. Another way to get the message out is to do old fashioned announcements over the PA. Corny maybe, but it saves lots of trees.
The circular/flyer is not going away, anytime soon. It’s wishful thinking.
The retail grocer ad is almost as old as newspaper advertising itself.
What it has blossomed into, is a 12 to 16 page 4 color display of weekly specials, markdowns, information, and meal planning ideas.
While most of you, for reasons I can’ understand, throw them away, there are millions of other loyal shoppers who comb the ads weekly for the best buys they can get, and even some, invest a little extra time pairing coupons with the advertised items to save even more.
Long live the circular/flyer, in whatever form it evolves.
When it comes to the weekly flyer about what’s on sale at the local supermarkets, as a bargain shopper, I always check to see who has the better deal. I live 15 miles outside of two different towns North and South of me. I don’t want to travel in either direction if I can find what I want at the local–buy it all–Shurfine that’s within 4 miles of my home.
If those chain stores want my business, they’ll have to have something I need, cheaper than what that local convenience grocery store has. With the high cost of gasoline these days, who wants to travel 30 miles round trip for milk? Not me! They have to show me what they have on sale to get me to go out of my way, and shop at those stores.
My family is not lower income and we shop the circulars for deals before we go to the store. In our area, there are at least 4 different options for stores within 3 miles of our house. We look at the price of bread and milk as well as the things we normally buy. Our purchase decision is based on the fliers that land in our mailbox on Wednesday every week.
I agree with Ken. Perceived EDLP operators have no use for a circular.
Pricey, alternative “value-add” grocers need to push out circulars or another form of identifying promotions/events to its secondary markets. For example, I wish I always did my shopping at Wild Oats, but frankly, it’s just too pricey. However, I often scan the circular to see what department is offering a >=25% promotion. If the promotion is perceived as a “deal,” that generally triggers a visit to the store.
Hi-Lo grocers that do little to differentiate themselves from the crowd…need a little more help than a weekly circular. These circulars (e.g., Albertsons, Kroger) generally end up in the recycling bin.
Say it isn’t so! Reading the flyers is a Saturday morning tradition at our house and I’m sure I’m not alone. Circulars are an important communication tool as opposed to a marketing tool. One of the big grocery chains uses the weekly ad to communicate new products as well. I like the idea of online flyers but it should be a separate set of specials or promos. I don’t believe chains would benefit from dropping a paper circular.
I noticed that most of the responders to this are men–and are probably not the primary shopper in the family, however, their opinions are valid.
As the primary shopper in my family, I feel that an independent grocery store can definitely get hurt by not running a circular. I plan my weekly menu’s from the ad, not only by price but also for the ideas it gives me as well. I have a primary store I shop in, but will often go between two. The chain is my primary choice, but if the independent has some good values on items I want to buy that week, I will make the switch. Super Target and Wal-Mart do not always have everything I want as far as brands, etc. Without ads at the local chain and the independent, I would probably go to the superstore more often. But I agree–don’t make the ad all about product and price. Give meal ideas, recipes, and services. Show us why you offer more than price…anyone can do that.
It’s interesting how almost all postings here are either opinion or based on personal experience. Doesn’t anyone have any data?
In our category-specific shopping styles database, we know that the level of agreement with the statement “I will go out of my way to shop at a store that has the lowest price” can vary greatly depending on the product category (can be as high as 50%+). If that is true, how would they know who has the best price in a given week without circulars?! While shoppers aren’t SystemBeaters to every category, those categories that are most likely to draw traffic based on price should be featured and some version of circulars still seems like a good way to do it.
In my household we rarely look at the circulars, for several different supermarkets, when it comes either in the mail or with the newspaper. It has absolutely no bearing as to which supermarket we frequent. We go to the one that we know and have developed a comfort. On the other hand, when in the store we might look at the circular…after all, who doesn’t like to save some money. Saving $.50 on an item won’t make me change where I shop.
As long as the “Boomer” segment remains viable and relevant, flyers will not go away any time soon. Though they are apt to be flexible and try new things, their comfort lies in what they know and what their parents knew to be the way to shop.
My experience working with a small Independent chain in Rhode Island taught me that playing with your advertising tactics can be rewarding but it can also be very risky.
For them (and their customers) flyers are and will likely continue to be a very relevant way of life. Try to take away that flyer from even one region you think is not a contributing factor to your store and you will here it from them.
However, it isn’t just a “Boomer” mentality, it is a price conscious mentality as well. Urban, working class lifestyles depend on these ads for pantry stuffing events.
All that said, in time they will most definitely evolve, the question is how?
Certainly with the emergence of “green” awareness, the decreasing cost effectiveness of traditional mass marketing, and the emergence of a number of in-store technologies, it feels safe to say that circulars will have a diminishing share of the supermarket advertising/marketing budget.
As a provider of digital signage solutions, I do have a dog in this hunt as another responder aptly put it, but it is clearly not a one-for-one tradeoff here. Retailers will continue to challenge themselves on how to build brand and bring people through the door. Once inside, it has become clear that the real marketing takes place: demonstrations and sampling, shelf level couponing, merchandising techniques, CRM programs and yes, even digital signage. What is at stake here is the actual mix that will emerge, and clearly that will vary based upon a retailer’s unique (or perceived-to-be-unique) positioning.
Circulars will not disappear entirely, but their share of the budget will be reduced as retailers focus efforts on in-store messaging and programs.
Hot ads or a high-low strategy can be successful but once you start it you are attracting customers with a drug that is hard to kick. Look what happened to Kmart when they tried to give up the ads…bankruptcy. A less expensive way to to get your specials to the customer is on your web page. Ukrop’s seems to be doing a great job at this. Check with them and see how they do it.
If you want to go the EDLP route you must figure about a year for your trade area to figure it out.
The most successful retailers getting my money, which feeds a family of six, get my attention with a few loss leaders in an email ad that are supplemented by the full flyer we pick up as we enter the store. This works for my demographic, but would need to be tested in others before dropping the circular entirely.
Interesting to note that you got more comments about this in a shorter period of time than most topics. Couple of thoughts:
A few years ago I was running marketing and merchandising for a chain many would argue is the best in the country. In a board meeting there, the COO began talking about how nobody read ads anymore and that we should save the money and go in-store. The group followed his comments quickly…. To which I responded with (turns out this wasn’t smart politically), “If you really believe no one reads ads, let’s run t-bone steaks for 99 cents.” After the laughter stopped and the COO turned back from red faced to normal, the group got the point. It’s a matter of what you do with it.
Secondly, the ad is also a reflection of your brand. It’s a price message, but it is a brand message too. Many people move to the market each year and this is the first point of contact with who you are. And…if we could all get together and not run them, that would be one thing. As long as the competition runs them, you cannot allow them to have a weekly dialog with your/the customer base without you.
Plus, I think you have to be careful as an affluent, college educated person to not assume everyone shops like you. There are a lot of people out there who depend on the savings that the ad provides.
As an independent supermarket owner, I can speak on this subject for hours. Most of the experts whose opinions I’ve read are no longer in the trenches day to day, as I am. A circular is necessary for several reasons.
1. A store must advertise key items in order to get “any deal” from the big manufacturers. You must advertise in order to stay competitive, because the food giants insist on an ad to get the performance bill-backs, which are crucial to buying right!!!
2. My community looks forward to all of our great meat and deli deals, which is our niche. By increasing the amount of space in our ad, it has allowed us to grow in a very tough economy.
3. Attending the NGA convention every year allows me to see how effective a great ad can be, and I study all angles to keep my ad fresh with new ideas.
4. The circular I also e-mail to customers weekly, along with internet only deals as well. Therefore, I agree with those who believe that the internet is quite useful.
5. You can run an ad that features your specialties, and allow people to see the difference in print.
6. Print ads can be brought into the store, as many of them do to plan their weekly shopping. You can’t carry a radio ad with you.
7. Another big advantage to print ads is that I can put in a last minute killer deal the day before I go to print, without any problem. It gives me a huge advantage to change course quickly, which gives me a huge edge over the methodical, slower moving big stores.
8. And last… I believe that an aggressive uncluttered circular that is fresh with ideas, and strong in quality perishables will always be welcomed by a community that relies on value, price and, yes, good service, which we not only advertise, but actually give.
The weekly circulars need to be evaluated as a media vehicle to communicate the weekly discounts. If you are a genuine EDLP operator, you won’t have weekly specials, so you can easily dump the circular. If, however you do use weekly discounts to encourage customers to visit your store, then you’ve got to figure out the best and most effective way to make sure customers know about the deals you have.
Even though my company is focused on the electronic side of weekly circulars, with targeted emails and personalized web sites, I still see a role for the printed weekly ad as a key part of the media mix for most retailers. But might it be just as effective with fewer pages? Does it need to be sent to every zip code in the area? Perhaps a smaller, more focused ad might be just as effective, with significantly lower costs.
While it’s easy to say that service and everyday low prices is the best way to win business, the reality is that for most retailers weekly specials are a part of their competitive arsenal. Instead of dumping it altogether, consider how to make it more efficient and more effective.
I have no dog in the hunt. But will just say as a customer, I buy a lot from the ad. In our area, the 2 major players are Kroger and Wal-Mart.
Kroger does an effective job with their ads. Wal-Mart does not. I probably would not shop at Kroger if it were not for the ad, because I have the perception that Wal-Mart is lower on most items. So if Kroger did away with the ad, I probably would not shop there on a regular basis.
So, I think the ads are extremely valuable if they are used effectively.
Weekly circulars are a carry over from mass marketing. Weekly advertising and circulars have been the foundation for High/Low operators. Every day low price retailers do not use weekly circulars and many successful smaller retailers don’t either.
The issues are how best to communicate with your target consumer and what to communicate. Most retailers should spend a little more money building their image and less on just price reductions. The future is targeted communication. Direct mail and email based on Frequent Shopper information is making progress. Kiosks linked to Frequent Shopper cards are being tried. The issue here is getting the customer to visit the kiosk. Future is direct communication via cell phone. Yes, the weekly circular has been a profit center for retailers, but suppliers are more than willing to spend on target over mass communication.
If you drop by the post office and look in the trashcans, you see literally hundreds of supermarket tabloids in there. Take a few seconds and watch people file out of the post office and watch them dump the entire pullout sections in the trash. What a waste of advertising dollars. For my small business, radio works best! It delivers me customers as they are on their way to the stores. They have purchasing on their minds.
Seeing that all retailers are NOT Wal-Mart, which has re-defined EDLP, no retailer that I have seen in 35 years has been an EDLP retailer. Therefore, the weekly ad is very important to them. The market area needs to be redefined and tightened to make sure you are getting the most for your dollar. My wife and myself are the only ones at home now, but my wife still uses weekly ads from retailers to shop. Most consumers that make under $100k a year use weekly ads. Most over $100K do not. The research is out there to support this.
Look at your marketing area at max 25 miles. Most shoppers shop with in 5 miles of their homes and as gas prices increase this will shorten again. Offer your customers , service with a fair price and push that in your ad as well. Make absolutely sure that you put your dollars into your labor service cost. The ROI is great.
Remember, “If you take care of your customers, they will take care of YOU!”
Personally, I would say no, never, never, never. Get that snail mail out of my face. But you’ve got to consider everybody all the time. When they stop publishing books then they should stop publishing circulars.
That colorful paper sits there in people’s homes month after month in places quiet from the constant pull of a computer, waiting with their ideas. People are different when intentionally pulling information and unintentionally finding it.
But the circulars should have more ideas (recipes, holiday, diet, budget, life advice, ways to find sales favorable to both the customer and the retailer). Let them sit longer.
A small store in my community has tried this. They recently switched from being part of a chain of franchised grocery stores to an independent. As such, they cut out their weekly circular.
As a shopper, I am not motivated to go to the store to walk around and see what they have that’s on sale. It’s not a productive use of my time. I think as a result of this move, they seem to be suffering from traffic loss in store. This can be seen in several ways including fewer cars parked outside the store than in the past, dead aisles, and expired product on the shelf.
In my line of work, I know my board members rely heavily on weekly circulars to put together the best shopping deals for their families. If stores quit with circulars, people would obviously still shop, but I think they would be more conservative in their approach about how they spend money. 10/$10 type offers, in-ad coupons that can be matched with manufacturer’s coupons, and cross marketing promotions (like get a free DVD when you buy type offers) are wildly popular with shoppers. And if there are multiple chains in the area, a circular is a great way to stay competitive. People do cross compare to see who has the best deal on oatmeal this week.