Also from Mark Heckman...
February 26, 2013
Safeway could be ready to stop running print ads as early as the end of this year, according to the company's chairman and CEO Steve Burd. Do you see many other grocery chains in addition to Safeway eliminating print ads in favor of digital marketing offers in the future? [more...]
The death of the supermarket circular has been prognosticated many times over my time in this business. In fact, I predicted that paper ads would go away back in the 1990s when loyalty card programs came on the scene, full of the promise that targeted direct to consumer offers and content would render the weekly ad obsolete. I have been wrong about a few things over my career, but never as blatantly as putting the RIP sign on paper ads. They live on.
Certainly Safeway and Kroger have gained a level of critical mass with their loyalty programs where they can at least talk about reducing the number of pages they print each week. In fact Kroger has done so, in some markets, going from eight pages to six, and then publishing many of their "qualifier" items, (items that brands pay the retailer to put in the ad), in the Kroger online version of the ad.
So for those retailers that can reach 60% to 70% of their patrons with digital content, paper is already being spared.
But aside from Kroger and now Safeway, it remains to be seen how many other retailers will have the size and clout to drive content digitally and consequently convince brands that they will receive the same reach and impact as the paper circular.
My instincts tell me that there are too many fortunes being made in the FSI and printing business for the paper coupons and weekly circulars to go away anytime soon. My sense is that Safeway will try to eliminate their weekly ads in some markets by year's end, but will likely find the sales will drop when doing so, and will find that reducing pages of the ad in tandem with a robust direct to consumer digital approach will be the optimal formula for several years to come.