In today’s challenging economic environment, shoppers are looking for ways to stretch their grocery budgets and are searching for stores that provide exceptional value. There is a clear need for supermarkets to satisfy shopper needs by highlighting great values available throughout their stores. However, actual supermarket responses are often less-than-effective. Many retailers are unintentionally constructing barriers that prevent shoppers from finding and appreciating great values offered. Following is an overview of the top 5 communication “sins” (or mistakes) supermarkets commonly commit that prevent them from getting full credit from shoppers for value offered, as well as steps retailers can take to redeem themselves, i.e., remove the barriers.
Sin #1: Vague and Varied Messages
Many supermarkets throw a basketful of poorly-defined and disparate price/value/savings terms, programs, and offerings “against the wall” hoping that shoppers will find at least one of them compelling. However, this is often wasted effort.
Redemption: Retailers need to develop and implement clear and comprehensive price/value communication programs that educate shoppers about all the ways they can save across the store. Successful programs often start with a single price/value/savings theme. All elements of the program (messages, signs, shelf tags, prices, etc.) are clearly defined and linked to the overall program theme.
Sin #2: Inconsistency across Departments
Retailers commonly employ different sets of price/value communication tactics in the center-store than they do in perishables. The meat department will have their own set of price/value communication vehicles and messages as will the produce department, etc. However, this sub-optimizes the opportunity to send a clear and consistent “total store” message.
Redemption: Since shopper price impression of a retailer is driven by their experiences across the store, i.e., in the center-store aisles and perishables departments, best practice retailers leverage a single price/value program across all departments. This consistency clarifies communication and educates shoppers about all the ways to save, regardless of department.
Sin #3: Subtle Signs and Tags
Some retailers have spent a great deal of money designing and building new stores—many with expensive floors, shelving, fixtures, etc.—and are reluctant to allow promotional signs and shelf tags to “clash” with the creative ambiance. So, they design promotional signs and shelf tags that purposefully blend into the décor, so as not to distract shoppers. Unfortunately, this often means that shoppers miss many of the price/value messages.
Redemption: All elements of a comprehensive price/value communication program should be easily recognizable in-store. While retailers do not necessarily have to use DayGlo orange, pink, or green signs/tags, promotional signs/tags should clearly standout. There are plenty of ways to have signs/tags noticeable to shoppers while complementing the store environment, e.g., through the use of creative designs, color schemes, fonts, etc.
Sin #4: Assuming More is Better
Many retailers attempt to enhance price/value image by dramatically increasing the number of promotional offers throughout the store. There is a common perception that if 1,000 promotional offers is good, 2,000 is twice as good and 3,000 is even better. In fact, some retailers evaluate and reward category managers based—in part—on the number of promotional tags in their categories each week. However, a consequence of this approach is to have some offers that provide very small, insignificant savings which can cause shoppers to lose faith in the value associated with all promotional offers.
Redemption: Providing an impressive number of promotional offers is a great strategy as long as each offer meets a minimum threshold for savings, i.e., every promotional deal must stand on it’s own as a strong value and worthy of shopper attention. This typically requires a minimum savings of 10% on any promotional offer, or at least $0.50 on higher-priced items over $5.00. However, if retailers need to make trade-offs among the number of offers, the duration of offers and the depth of discounts, retailers can most effectively improve price image with “fewer” and/or “shorter” offers yielding “deeper” discounts.
Sin #5: Hiding the Savings
It’s quite common to see price signs on end-caps and special displays—and promotional shelf tags in center-store aisles—that provide a sale price but that do not identify the savings associated with the promotional offer. Common reasons include the complexity of managing multiple price or ad zones that can generate different savings amounts on a single offer in each store or store cluster, and the belief that shoppers can “do the math” on their own.
Redemption: Retailers must “do the math” for shoppers and highlight the dollar savings associated with each offer. This will provide a recurring “savings” message that enhances price image. And, these savings messages are extremely important for all shoppers; those who are active in the category and those who are not. As shoppers look across all the end-caps in a store, they’ll see the dollar savings associated with each and begin to appreciate that the store offers great deals/savings. Similarly, as shoppers push their carts up and down center-store aisles, they’ll see savings on promotional shelf tags thereby reinforcing that a smart shopper can save a lot of money in that store.
Appealing to today’s shoppers requires retailers to avoid the top value communication “sins” and focus on the communication, marketing and merchandising actions that will ensure they get full credit for the values they offer. This is not an option for most retailers. It’s “table-stakes” for playing—and winning—the game.
About The Author
Jon Hauptman leads Willard Bishop’s retail pricing strategy and shopper marketing practice areas. Willard Bishop provides marketing strategies and data modelling to improve the retail consumer experience.
Jon Hauptman, Partner, Willard Bishop