July 10, 2012
Circular Logic: Grocers Find Print Works Best
Retail marketing may be changing over to a bright new digital future, but a recent study of the grocery industry suggests that old-fashioned print circulars are still delivering the best results for chains and independents.
A Valassis poll of 60 decision makers representing 50 companies found that 90 percent use weekly circulars as their primary promotional vehicle. Fifty percent said circulars helped to increase sales while 25 percent said the communications helped increase customer retention.
While printed circulars distributed via newspapers were ranked highest in terms of helping grocers to meet weekly sales objectives, many find themselves having to adapt the strategy as a result of declining circulation numbers. Twenty-six percent reported increased use of direct mail circulars and online promotions in the past year.
While print circulars are the key communication piece for grocers today, that will not last for long based on the research findings. Sixty-five percent expect that social media/internet will become the medium of choice for grocery store operators to meet sales goals over the next five years.
"The consumer decision-making journey is more involved than ever," said Therese Mulvey, vice president, marketing intelligence for Valassis, in a statement. "Media preferences are changing, due in great part to consumers’ desire to be connected. It is no longer a ‘how we use print versus digital’ question. It is a ‘how do we best optimize our marketing dollars to maximize the ROI on both.’"
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Discussion Questions
Discussion Questions: Is the printed weekly circular more or less effective today in generating store sales and retaining customers than in the past? How quickly do you see the printed weekly circular being replaced in the grocery channel?
Poll
The circular may be more effective today because we’ve been seeing more shoppers looking for deals over the past few years. As readership drops, newspaper delivered circulars may become less important, but the concept of the weekly deals is likely to survive and thrive.
Print works the best for retailers simply because it remains the only medium that can reach enough shoppers each week to move the needle. Further and of equal importance, both brands and retailers have figured out how to leverage print, and make money in doing so.
Conversely, I have been hearing about the “death of the printed circular” for about 20 years now, and while digital tools and applications are making their way into the consideration set of the consumer, there still is not enough content or coverage for digital to compete with the mighty paper-based incumbents.
With digitally-minded Millennials taking their seat at the table of influence in a few years, paper will be hard pressed to keep its standing as the primary advertising vehicle. But until brands and retailers force the issue, by re-allocating content and resources to digital, even the Millennials may have to learn to look in the mail box or newspaper for their grocery deals!
Until the industry “cracks the code” on effective digital delivery/usage, print will hang in there. Once this is solved it will be a precipitous decline for print.
Walmart’s and Target’s aggressive ad match policy is probably frustrating some retailers. Grocers find themselves subsidizing the advertising budgets of big-box retailers. Maybe it’s time to reinvent the message. It should not be about what’s on sale in the ad, but about the experience. I’ve never gone to Whole Foods, Wegmans or Trader Joe’s because of an ad. I’ve never gone to Walmart because of their ad, but I have gone to Walmart because they will match other ads.
In every quarter from 2006 to 2008, newspaper sales declined over 10% nationally. They leveled off a bit because there are still people who like their paper with morning coffee. However, as the population ages, this group will continue to decline. I cancelled my paper years ago. I and my kids use apps like Groupon and Coupon Sherpa. This is the wave of the future and as more and more apps pop up to deliver us deals, circulars will fade away.
The central question in so many discussion like this is: “What is most human?”
Most of us interface with our universe through five senses that gather information for our minds to process, six if you’re any good at intuition. We process that information as dictated by the subconscious. How the subconscious gets its instructions is too big a topic for discussion here though I would dearly love to get into it. My point is that the more you de-humanize this process the more engagement you lose. After all, would you really send the love of your life an e-card to express your undying adoration? Which is more human — the shoebox filled with tear-stained love letters wrapped up in a pink bow or a digital file with old word docs and emails? OK…maybe this is a bad example.
But even with grocery flyers there’s a sense of connection, something to hold, see, smell, etc. Someone went to trouble and expense to send it to you. It is somehow more real, more personal. Come on…you know that’s true.
If we were to wax quantum, we’d also ask which medium carries the most ‘energy’? Those with the most energy win and it is very difficult to convey human energy through mechanistic technology.
And since this is Nikola Tesla’s birthday I’ll offer this thought from him: “If you want to find the secrets of the Universe, think in terms of energy, frequency and vibration.” We have yet to understand how this applies to retail.
Here’s a shock — Valassis finds circulars effective!
Wait — a second shock — people who use circulars believe they work!
Wait. Wait — a third shock — if you don’t have a better tool — or aren’t aware of a better tool — you make do with the tools you have!
With the decline of newspapers in many communities, circulars remain the last “Print Man” standing and, as others have noted, digital mass communications appears to be a bridge too far for most supermarketers.
Print is NOT dead at all. The various pundits above who are certain that electronic communication will replace print are looking at the wrong end of the telescope to see the stars.
Electronic media works best to “interrupt” people and demands a reasonably immediate response. It is best used for tactical and “in the moment” decisions.
However, shopping is still a PLANNED event that requires strategizing (which stores, what menu items, what is my budget, etc.) and comparing options BEFORE embarking. Is there “impulse” purchasing? SURE. Is there opportunity to interrupt and persuade? NO DOUBT. But to think it will replace print is as wrong-headed as thinking that Blockbuster was going to kill the movie theater business. Going to the movies is about a very different experience than “just” seeing a movie. Similarly, print performs a different function than electronic messaging (when done correctly) in securing shopper attention, educating and informing, and building a better future for the shopper.
The shopper uses and accesses each (electronic vs. print) very differently with a totally separate mindset about the uses of each. There is room for both at the table. In fact, they COMPLEMENT each other and by using both — each becomes better able to do the job it is meant to do.
Two years ago at a conference, I heard a senior supermarket executive say that print circular will be gone in a few years, to be replaced by digital circulars. I didn’t believe it then and I don’t believe it now.
Digital coupons are “hot” nowadays, but FSIs account for the vast majority of coupons distributed. The print circular will go away when the FSI does.
I don’t see it being replaced completely any time in the future, as print is still my most effective weapon. The answer is not always high tech, and I believe it is a combination of everything out there to attract consumers. I know some panelists will disagree with me, but I live this every day, and will continue to pound the print for the foreseeable future.
Also, I can get a very good rate by negotiating yearly contracts and haven’t had an increase in 4 years, so even though the Internet is very useful, so is print, at least for my industry. Not everything has to be high tech, and I still see a lot of print ads being brought into my store with circles around the items they picked out ahead of time.
Wow! Talk about knowing the conclusion before the question is asked. Appreciate having the question asked but do you think an alternate source might add some credibility here? Regardless, no surprises and with better understanding of where grocery customers live and work, indeed circulars are targeting more effectively and choosing product/promotion to highlight more selectively. Analytics is driving the category to do it smarter and with some success. While two-tier pricing is a signage nightmare, it does cause shoppers to reveal their basket details and in turn help to drive decisions on where marketing funds are allocated.
I think the issue is the values inherent in each medium: e-media (the net, email, social media, etc.) are fine for communicating info about specific items — is Gatorade on sale this week? — but they’re lousy for the kind of let’s-see-what’s-on-sale-this-week browsing that print does so well; and I only see that worsening as 19″ monitors are superseded by postage stamp sized i-screens. The rapid decline of (daily)newspapers presents an obvious challenge … perhaps the Shopping News will make a comeback.
Some of the consumers find circulars useful some of the time, but will they shift to digital media? My guess — some of the consumers will find digital media useful some of the time. Will 100% of the consumers use only one medium all the time? I think not. So you have to plan to reach your consumers through whichever media is important to them at a particular point in time.
I think, for the the foreseeable future, that leveraging digital will be more a case of adding more touch points rather replacing the printed circular. Retailers will be showcasing content on digital signage displays in the store, in addition to making the circulars available to consumers in mobile applications.
Solid results from Valassis in this analysis from the vendor side. What is more pressingly important for the industry is that they continue to look at the “Demand” side — what Media does the Consumer say Influences their Grocery decisions.
The BIGinsight Media Behaviors & Influence survey of over 24,000+ Adults, 18+ is consistently clear: Integrated Marketing and proper Media Allocation pay dividends.
When the Consumer is asked of their Media Influence in this category they rank them in this manner:
Coupons (67.6%), In-Store (51.2%), Word of Mouth (36.9%), Advertising Insert (36.3%), Direct Mail (30.5%), Newspaper (30.5%) TV Broadcast (24.6%), Read an Article (17.5%), Magazine (16.6%), Cable TV (14.8%), Internet Advertising (14.1%), Radio (13.1%).
Certainly Outdoor, Video on Mobile Devices, Text Messaging, Social Media, etc. play a role in the mix, but single digit in mentions.
Grocers who are using printed weekly circulars are listening to the consumer/customer — not a novel idea, just good, practical common sense.
Media Mix plays a different role for different grocers, and certainly for different forms of retailers. The printed circular isn’t going to go away any time soon for the grocery industry. That circular may be distributed in the mail, in the newspaper, or in-store. With the consumer watching expenditures, seeking an opportunity to save during their 90+ visits to grocery stores each week, you can count on them READING.
It is my observation that Generation Y and the Millennial’s rarely if ever use a printed ad to locate a shopping objective. Boomers and their parents still prefer to use these printed buggy whips for the things they want and need. As time goes by and the smartphone completely eliminates the dumb wireless phone by becoming easier to use and cheaper to own, the use of printed media and money will steeply diminish. That is what is happening at the present time and in the near future.
Look — vested interest aside — I think this needs to be looked at on a case-by-case basis. Would Spanish language circulars distributed in largely Hispanic immigrant neighborhoods work more effectively than other media? Maybe.
Do the affluent, households of one, etc. pore over circulars to plan their weekly shopping experience? Just not buying it.
Print will be essentially gone within a generation. How fast it goes is another question. I think the Valassis estimate of five years seems reasonable, at least at this point.
Well I decided it was time to talk with one of our promotion experts who spends way too much time with North American and EMEA-based retailers. The customers that he talked to — especially in North America — don’t really “ponder” too heavy on Print vs Digital. They think about how to maximize the channels that a particular consumer gravitates to.
It is true that print is expensive and the traditional insert is hampered by the continuing reduction in newspaper support. But the same insert that appears in our Sunday or Wednesday paper has for quite some time now been published in a PDF format or through many of the electronic page viewing applications that present the pages when you click on the “Weekly Ad” link on the retailer’s landing web page.
The irony of this situation is that it was very expensive to print many different versions of the insert, circular, or other weekly promotional media, but now that consumers are comfortable looking online at the same format as used to appear frequently in paper form.
With respect to EMEA and Asia Pacific, the printed promotional vehicle is still dominant in the grocery and other retail verticals.
Well that’s the scoop from AZ and I will be reading my Wednesday and Sunday inserts…it is kind of an addiction.
It appears the prevailing thoughts from the previous comments are a combination of digital and print will continue to remain in the mix. CPGs consider print (FSIs) as a branding opportunity in addition to an incentive to buy. Why else would they continue to incur the costs for such low redemption rates? One has to really question though just how many eyeballs actually see the messaging. Retailers most likely feel the same way, however, it’s an expensive proposition to print and distribute this weeks specials 52 times a year when margins are razor thin.
But what about the shopper? What makes it easiest for them to get today’s deal? The brass ring is providing relevant offers at the appropriate time, when the shopper is in the aisle with intent to purchase. Additionally, it must be done in such a way that shopper behavioral change is minimal or adoption will be limited.
The convergence of print and digital will continue to evolve and retailers and brands will continue their quest to find the right mix that provides the best ROI. After all, it’s about one more trip and one more item in the basket that makes a difference.
A circular/flyer is far more interesting to read than any pop-up or re-creation of the sales ad on a smart phone, tablet or laptop.
Stores like Harris-Teeter are scaling down the size and scope of their printed ads while ShopRite mails a hefty circular each week. Aldi has in-store signs posted at exits about next week’s ads and Bottom Dollar…hey, they just use the flying piggybank to spread the word about their weekly deals.
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The circular may be more effective today because we’ve been seeing more shoppers looking for deals over the past few years. As readership drops, newspaper delivered circulars may become less important, but the concept of the weekly deals is likely to survive and thrive.
Print works the best for retailers simply because it remains the only medium that can reach enough shoppers each week to move the needle. Further and of equal importance, both brands and retailers have figured out how to leverage print, and make money in doing so.
Conversely, I have been hearing about the “death of the printed circular” for about 20 years now, and while digital tools and applications are making their way into the consideration set of the consumer, there still is not enough content or coverage for digital to compete with the mighty paper-based incumbents.
With digitally-minded Millennials taking their seat at the table of influence in a few years, paper will be hard pressed to keep its standing as the primary advertising vehicle. But until brands and retailers force the issue, by re-allocating content and resources to digital, even the Millennials may have to learn to look in the mail box or newspaper for their grocery deals!
Until the industry “cracks the code” on effective digital delivery/usage, print will hang in there. Once this is solved it will be a precipitous decline for print.
Walmart’s and Target’s aggressive ad match policy is probably frustrating some retailers. Grocers find themselves subsidizing the advertising budgets of big-box retailers. Maybe it’s time to reinvent the message. It should not be about what’s on sale in the ad, but about the experience. I’ve never gone to Whole Foods, Wegmans or Trader Joe’s because of an ad. I’ve never gone to Walmart because of their ad, but I have gone to Walmart because they will match other ads.
In every quarter from 2006 to 2008, newspaper sales declined over 10% nationally. They leveled off a bit because there are still people who like their paper with morning coffee. However, as the population ages, this group will continue to decline. I cancelled my paper years ago. I and my kids use apps like Groupon and Coupon Sherpa. This is the wave of the future and as more and more apps pop up to deliver us deals, circulars will fade away.
The central question in so many discussion like this is: “What is most human?”
Most of us interface with our universe through five senses that gather information for our minds to process, six if you’re any good at intuition. We process that information as dictated by the subconscious. How the subconscious gets its instructions is too big a topic for discussion here though I would dearly love to get into it. My point is that the more you de-humanize this process the more engagement you lose. After all, would you really send the love of your life an e-card to express your undying adoration? Which is more human — the shoebox filled with tear-stained love letters wrapped up in a pink bow or a digital file with old word docs and emails? OK…maybe this is a bad example.
But even with grocery flyers there’s a sense of connection, something to hold, see, smell, etc. Someone went to trouble and expense to send it to you. It is somehow more real, more personal. Come on…you know that’s true.
If we were to wax quantum, we’d also ask which medium carries the most ‘energy’? Those with the most energy win and it is very difficult to convey human energy through mechanistic technology.
And since this is Nikola Tesla’s birthday I’ll offer this thought from him: “If you want to find the secrets of the Universe, think in terms of energy, frequency and vibration.” We have yet to understand how this applies to retail.
Here’s a shock — Valassis finds circulars effective!
Wait — a second shock — people who use circulars believe they work!
Wait. Wait — a third shock — if you don’t have a better tool — or aren’t aware of a better tool — you make do with the tools you have!
With the decline of newspapers in many communities, circulars remain the last “Print Man” standing and, as others have noted, digital mass communications appears to be a bridge too far for most supermarketers.
Print is NOT dead at all. The various pundits above who are certain that electronic communication will replace print are looking at the wrong end of the telescope to see the stars.
Electronic media works best to “interrupt” people and demands a reasonably immediate response. It is best used for tactical and “in the moment” decisions.
However, shopping is still a PLANNED event that requires strategizing (which stores, what menu items, what is my budget, etc.) and comparing options BEFORE embarking. Is there “impulse” purchasing? SURE. Is there opportunity to interrupt and persuade? NO DOUBT. But to think it will replace print is as wrong-headed as thinking that Blockbuster was going to kill the movie theater business. Going to the movies is about a very different experience than “just” seeing a movie. Similarly, print performs a different function than electronic messaging (when done correctly) in securing shopper attention, educating and informing, and building a better future for the shopper.
The shopper uses and accesses each (electronic vs. print) very differently with a totally separate mindset about the uses of each. There is room for both at the table. In fact, they COMPLEMENT each other and by using both — each becomes better able to do the job it is meant to do.
Two years ago at a conference, I heard a senior supermarket executive say that print circular will be gone in a few years, to be replaced by digital circulars. I didn’t believe it then and I don’t believe it now.
Digital coupons are “hot” nowadays, but FSIs account for the vast majority of coupons distributed. The print circular will go away when the FSI does.
I don’t see it being replaced completely any time in the future, as print is still my most effective weapon. The answer is not always high tech, and I believe it is a combination of everything out there to attract consumers. I know some panelists will disagree with me, but I live this every day, and will continue to pound the print for the foreseeable future.
Also, I can get a very good rate by negotiating yearly contracts and haven’t had an increase in 4 years, so even though the Internet is very useful, so is print, at least for my industry. Not everything has to be high tech, and I still see a lot of print ads being brought into my store with circles around the items they picked out ahead of time.
Wow! Talk about knowing the conclusion before the question is asked. Appreciate having the question asked but do you think an alternate source might add some credibility here? Regardless, no surprises and with better understanding of where grocery customers live and work, indeed circulars are targeting more effectively and choosing product/promotion to highlight more selectively. Analytics is driving the category to do it smarter and with some success. While two-tier pricing is a signage nightmare, it does cause shoppers to reveal their basket details and in turn help to drive decisions on where marketing funds are allocated.
I think the issue is the values inherent in each medium: e-media (the net, email, social media, etc.) are fine for communicating info about specific items — is Gatorade on sale this week? — but they’re lousy for the kind of let’s-see-what’s-on-sale-this-week browsing that print does so well; and I only see that worsening as 19″ monitors are superseded by postage stamp sized i-screens. The rapid decline of (daily)newspapers presents an obvious challenge … perhaps the Shopping News will make a comeback.
Some of the consumers find circulars useful some of the time, but will they shift to digital media? My guess — some of the consumers will find digital media useful some of the time. Will 100% of the consumers use only one medium all the time? I think not. So you have to plan to reach your consumers through whichever media is important to them at a particular point in time.
I think, for the the foreseeable future, that leveraging digital will be more a case of adding more touch points rather replacing the printed circular. Retailers will be showcasing content on digital signage displays in the store, in addition to making the circulars available to consumers in mobile applications.
Solid results from Valassis in this analysis from the vendor side. What is more pressingly important for the industry is that they continue to look at the “Demand” side — what Media does the Consumer say Influences their Grocery decisions.
The BIGinsight Media Behaviors & Influence survey of over 24,000+ Adults, 18+ is consistently clear: Integrated Marketing and proper Media Allocation pay dividends.
When the Consumer is asked of their Media Influence in this category they rank them in this manner:
Coupons (67.6%), In-Store (51.2%), Word of Mouth (36.9%), Advertising Insert (36.3%), Direct Mail (30.5%), Newspaper (30.5%) TV Broadcast (24.6%), Read an Article (17.5%), Magazine (16.6%), Cable TV (14.8%), Internet Advertising (14.1%), Radio (13.1%).
Certainly Outdoor, Video on Mobile Devices, Text Messaging, Social Media, etc. play a role in the mix, but single digit in mentions.
Grocers who are using printed weekly circulars are listening to the consumer/customer — not a novel idea, just good, practical common sense.
Media Mix plays a different role for different grocers, and certainly for different forms of retailers. The printed circular isn’t going to go away any time soon for the grocery industry. That circular may be distributed in the mail, in the newspaper, or in-store. With the consumer watching expenditures, seeking an opportunity to save during their 90+ visits to grocery stores each week, you can count on them READING.
It is my observation that Generation Y and the Millennial’s rarely if ever use a printed ad to locate a shopping objective. Boomers and their parents still prefer to use these printed buggy whips for the things they want and need. As time goes by and the smartphone completely eliminates the dumb wireless phone by becoming easier to use and cheaper to own, the use of printed media and money will steeply diminish. That is what is happening at the present time and in the near future.
Look — vested interest aside — I think this needs to be looked at on a case-by-case basis. Would Spanish language circulars distributed in largely Hispanic immigrant neighborhoods work more effectively than other media? Maybe.
Do the affluent, households of one, etc. pore over circulars to plan their weekly shopping experience? Just not buying it.
Print will be essentially gone within a generation. How fast it goes is another question. I think the Valassis estimate of five years seems reasonable, at least at this point.
Well I decided it was time to talk with one of our promotion experts who spends way too much time with North American and EMEA-based retailers. The customers that he talked to — especially in North America — don’t really “ponder” too heavy on Print vs Digital. They think about how to maximize the channels that a particular consumer gravitates to.
It is true that print is expensive and the traditional insert is hampered by the continuing reduction in newspaper support. But the same insert that appears in our Sunday or Wednesday paper has for quite some time now been published in a PDF format or through many of the electronic page viewing applications that present the pages when you click on the “Weekly Ad” link on the retailer’s landing web page.
The irony of this situation is that it was very expensive to print many different versions of the insert, circular, or other weekly promotional media, but now that consumers are comfortable looking online at the same format as used to appear frequently in paper form.
With respect to EMEA and Asia Pacific, the printed promotional vehicle is still dominant in the grocery and other retail verticals.
Well that’s the scoop from AZ and I will be reading my Wednesday and Sunday inserts…it is kind of an addiction.
It appears the prevailing thoughts from the previous comments are a combination of digital and print will continue to remain in the mix. CPGs consider print (FSIs) as a branding opportunity in addition to an incentive to buy. Why else would they continue to incur the costs for such low redemption rates? One has to really question though just how many eyeballs actually see the messaging. Retailers most likely feel the same way, however, it’s an expensive proposition to print and distribute this weeks specials 52 times a year when margins are razor thin.
But what about the shopper? What makes it easiest for them to get today’s deal? The brass ring is providing relevant offers at the appropriate time, when the shopper is in the aisle with intent to purchase. Additionally, it must be done in such a way that shopper behavioral change is minimal or adoption will be limited.
The convergence of print and digital will continue to evolve and retailers and brands will continue their quest to find the right mix that provides the best ROI. After all, it’s about one more trip and one more item in the basket that makes a difference.
A circular/flyer is far more interesting to read than any pop-up or re-creation of the sales ad on a smart phone, tablet or laptop.
Stores like Harris-Teeter are scaling down the size and scope of their printed ads while ShopRite mails a hefty circular each week. Aldi has in-store signs posted at exits about next week’s ads and Bottom Dollar…hey, they just use the flying piggybank to spread the word about their weekly deals.