January 12, 2007
Delhaize Chains Go Interactive with Circulars
Food Lion, Hannaford Bros., Bloom and Sweetbay are going live with a new interactive online circular program that allows customers of the Delhaize America chains to search weekly specials and recipes, view how-to videos and create an online shopping list manager.
David Palmer, director of loyalty marketing at Food Lion, said the new program created by Adplex of Houston, Tex., “gives us a direct way to communicate one on one with our customers, unlike anything we’ve ever been able to do through traditional marketing methods… in the end, we will be able to create meaningful customer-specific offers based on the individual’s unique interests and shopping habits. Our ultimate goal is to create a Web-based experience that is more enjoyable and relevant to our customers that keeps them coming back week after week. Our VirtualStore is just the beginning of this process.”
Galen Walters, CEO of adplex, said, “VirtualStore gives customers an instant-value, instant-gratification loyalty program. That’s because retailers can provide individualized offers tailored specifically to each customer’s unique interests, desires and needs. Historically, one-to-one marketing has been expensive, time-consuming and cumbersome. VirtualStore is a revolutionary breakthrough because for the first time, the most effective form of advertising is also the most economical, easy to implement and efficient.”
Bruce Daman, director of brand communication, Hannaford Bros., said, “We have a large amount of consumers who are located in remote regions – areas that are not cost-effective to reach through traditional circular mailers. Our new online circular… allows us to easily access these customers. We’ve created more than a Web site, it’s an online community and destination.”
Discussion Questions: Do you see online technology such as that described here as having the capacity to redefine the relationship between retailer and consumer? What elements do you see as being necessary if these types of programs are going to be truly relevant to shoppers?
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Mr. Bishop is accurate. What makes the Delhaize site different from most interactive advertising circular initiatives is what’s under the hood. Dehlhaize utilizes the adplex “Promote” system to feed the data to the site. Promote sits between Merchandising and Advertising to automate the workflow and to create digital expressions of the merchandising data. The data can be ported to the print circular, on-line and in-store initiatives, signs, etc. The VirtualStore can feed “opt-in” permission-based registration to drive customer preferences and make the content even more relevant. The real power of the system is the interconnectivity between the merchandising data and the transactional data that Promote and the VirtualStore utilize for decision making.
There will be a continual melding of online and in-store experiences. They are NOT two different worlds, but one world, and they do work very much alike in fundamental ways.
This type of online loyalty marketing is a small slice of how retailers can use the Internet to their advantage and benefit the customer. Delivering high quality content directly tailored to each customer will strengthen the loyalty bond. Tie this into a personal shopper program focused on non-perishable essentials and ready for pickup when the customer comes to shop for perishables and unique items and you have a high value program.
Retailers spend much too much on wasted advertising. If Delhaize can use the internet to reach its customers, the opportunity to cut waste is phenomenal. The ratio of ads printed each week to weekly customers is appalling. Years ago, led by Time, magazines started printing different ads for different subscribers. The Time issues mailed to doctor’s offices don’t have the same ads as issues mailed to retired people. Mass customization of advertising, like POS coupon programs, can be a great productivity tool.
Online circulars with shopping lists, tailored marketing, consumer newsletters, recipes and videos are already offered by some retailers. The challenge for Delhaize and others is to keep it fresh and relevant to different groups of consumers.
I have heard the promise of “meaningful customer-specific offers” before, and then to get coupons at checkout for dog food when I don’t even have a dog.
There is a lot of work to do to make this work successfully for consumers and retailers.
Yes! Communicating your promotions well is what helps define a successful promotional and marketing program. Any venue which can drive better understanding and disbursement of the message can only help the message. In this case, they are only following what many of the larger retailers have been doing online (like Best Buy) which has already proven to be a great additional vehicle for increased exposure.
The key question here in our experience relates to the ability of the software logic to create offers that are truly relevant for each shopper. This involves a sophisticated analysis of their past shopping behavior, i.e., something that we’ve seen in only a few programs to date.
Unfortunately, the light approach to building targeted offers such as using demographics or superficial analysis of purchase data results in a spam-like promotion that doesn’t work because they aren’t relevant.
The only way to determine if this system can do the job is to look under the hood.
These initiatives can be very useful to both customers and the places they shop. Keep in mind, however, that the basis of the customer relationship rests of how well the retailer meets the core customer expectations. This sounds simple, and in a way it is; the difficult part for retailers is not to get distracted by peripheral issues (such as these online issues), to build systems that meet these expectations automatically, and to gather good data that will tell you what customers really want and how you are really doing. This last element is probably the most difficult, because it involves High-Intensity Information (Information that is both significant and uncomfortable), and every retail organization has manifold, hidden mechanisms that block, distort, withhold, and minimize this information. This leaves retail executives in the unfortunate position of thinking their organization is quite strong when in reality, it is not.
As I say, the IT systems under discussion here can be helpful, but they can’t redefine the relationship between customer and retailer. They are simply not a big enough or important enough part of the basis of the business relationship to begin with.
When I, or people I know, go shopping in a b&m store, we typically know what we want. I don’t see how a one-to-one online relationship can help this. I see this as a waste of money on the retailer’s part — money that could surely be used for better purposes!
While online adds and shopping lists are nice, the average American does not have the time to sit and browse the web looking for deals and making shopping lists. In my store, most of our regular customers are in daily, if not more–always on the go and moving fast. The best things a grocery store can do are: 1. Have friendly and fast employees to help. 2. Good advertisement within the town and in the store. 3. Have low prices. Finally, the best thing I have seen to keep people coming back is customer/employee interaction. Take a few minutes to talk to them and call them by name. Really make them feel like they are welcome and appreciated…that will keep them coming back time and time again.
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Mr. Bishop is accurate. What makes the Delhaize site different from most interactive advertising circular initiatives is what’s under the hood. Dehlhaize utilizes the adplex “Promote” system to feed the data to the site. Promote sits between Merchandising and Advertising to automate the workflow and to create digital expressions of the merchandising data. The data can be ported to the print circular, on-line and in-store initiatives, signs, etc. The VirtualStore can feed “opt-in” permission-based registration to drive customer preferences and make the content even more relevant. The real power of the system is the interconnectivity between the merchandising data and the transactional data that Promote and the VirtualStore utilize for decision making.
There will be a continual melding of online and in-store experiences. They are NOT two different worlds, but one world, and they do work very much alike in fundamental ways.
This type of online loyalty marketing is a small slice of how retailers can use the Internet to their advantage and benefit the customer. Delivering high quality content directly tailored to each customer will strengthen the loyalty bond. Tie this into a personal shopper program focused on non-perishable essentials and ready for pickup when the customer comes to shop for perishables and unique items and you have a high value program.
Retailers spend much too much on wasted advertising. If Delhaize can use the internet to reach its customers, the opportunity to cut waste is phenomenal. The ratio of ads printed each week to weekly customers is appalling. Years ago, led by Time, magazines started printing different ads for different subscribers. The Time issues mailed to doctor’s offices don’t have the same ads as issues mailed to retired people. Mass customization of advertising, like POS coupon programs, can be a great productivity tool.
Online circulars with shopping lists, tailored marketing, consumer newsletters, recipes and videos are already offered by some retailers. The challenge for Delhaize and others is to keep it fresh and relevant to different groups of consumers.
I have heard the promise of “meaningful customer-specific offers” before, and then to get coupons at checkout for dog food when I don’t even have a dog.
There is a lot of work to do to make this work successfully for consumers and retailers.
Yes! Communicating your promotions well is what helps define a successful promotional and marketing program. Any venue which can drive better understanding and disbursement of the message can only help the message. In this case, they are only following what many of the larger retailers have been doing online (like Best Buy) which has already proven to be a great additional vehicle for increased exposure.
The key question here in our experience relates to the ability of the software logic to create offers that are truly relevant for each shopper. This involves a sophisticated analysis of their past shopping behavior, i.e., something that we’ve seen in only a few programs to date.
Unfortunately, the light approach to building targeted offers such as using demographics or superficial analysis of purchase data results in a spam-like promotion that doesn’t work because they aren’t relevant.
The only way to determine if this system can do the job is to look under the hood.
These initiatives can be very useful to both customers and the places they shop. Keep in mind, however, that the basis of the customer relationship rests of how well the retailer meets the core customer expectations. This sounds simple, and in a way it is; the difficult part for retailers is not to get distracted by peripheral issues (such as these online issues), to build systems that meet these expectations automatically, and to gather good data that will tell you what customers really want and how you are really doing. This last element is probably the most difficult, because it involves High-Intensity Information (Information that is both significant and uncomfortable), and every retail organization has manifold, hidden mechanisms that block, distort, withhold, and minimize this information. This leaves retail executives in the unfortunate position of thinking their organization is quite strong when in reality, it is not.
As I say, the IT systems under discussion here can be helpful, but they can’t redefine the relationship between customer and retailer. They are simply not a big enough or important enough part of the basis of the business relationship to begin with.
When I, or people I know, go shopping in a b&m store, we typically know what we want. I don’t see how a one-to-one online relationship can help this. I see this as a waste of money on the retailer’s part — money that could surely be used for better purposes!
While online adds and shopping lists are nice, the average American does not have the time to sit and browse the web looking for deals and making shopping lists. In my store, most of our regular customers are in daily, if not more–always on the go and moving fast. The best things a grocery store can do are: 1. Have friendly and fast employees to help. 2. Good advertisement within the town and in the store. 3. Have low prices. Finally, the best thing I have seen to keep people coming back is customer/employee interaction. Take a few minutes to talk to them and call them by name. Really make them feel like they are welcome and appreciated…that will keep them coming back time and time again.