BrainTrust Query: Extra Tagging – Smart Marketing or Not?

Discussion
Oct 28, 2011
Bob Phibbs

Through a special arrangement, presented here for discussion is a summary of a current article from the Retail Doc blog.

Deal-mania is everywhere, from the freakish examples of Extreme Couponers on TV to the daily deals and, the old standard, the Sunday paper inserts. But the extent became clear to me while strolling through my local Rite Aid.

In every aisle I saw coupons taped to the front of many products. It didn’t matter if the product was on a shelf, hanging from a pegboard or stacked on an end-cap.

These little white slips with $2.00 and $1.00 off became the focus of anyone looking to buy almost any product in the store. The products themselves disappeared behind the paper. Which meant we noticed only the ‘deal’; then our eyes glazed over and we moved on. The coupons had no meaning; they were a distraction. If every item could be discounted, the coupons were no longer sale attractors but obstacles in the way of finding what you came in for. That was in New York.

In a similar twist, when I walked into a Safeway in Portland, OR a few days later, they had an additional yellow tag on nearly every product on the shelf. Some were sales tags, some were “new low price” tags, some were “reduced for quick sale” tags and some were club price tags.

Rite Aide’s and Safeway’s extreme tagging strategies made their stores look cheap — and not in a good way. It’s like a panicked marketer said: “Tag as many as possible to raise sales.”

Does anyone give a damn if something is now eighty cents cheaper than it used to be? When a customer needs a niche product, it doesn’t matter what the price is or was; customers aren’t waiting. So who thinks this will positively alter customer behavior? Panicked store marketers.

And these are the same marketing people who are bound to bring panic couponing to customers’ smartphones.

If we become numb to you, annoyed or irritated; if we feel shopping is a chore where not only do we have to take the time to go up and down the aisle, but we also have to navigate through all the “deals”, we’ll go elsewhere where we’re treated like humans, not like rats looking for the cheese.

And because we’re not angry, just frustrated, we won’t call and tell you, we’ll just avoid you. Which of course means you’ll think it’s because you didn’t provide enough deals.

Discussion Questions: Have shelf tags become a nuisance? What effect are tags having on the shopping experience?

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20 Comments on "BrainTrust Query: Extra Tagging – Smart Marketing or Not?"


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David Biernbaum
Guest
7 years 7 months ago

When too many products are discounted with shelf tags the entire store loses credibility and in the long run, sales will actually decline.

Paula Rosenblum
Guest
7 years 7 months ago

Actually the effect of the tags on branded product is interesting.

Because the shopper looks at the shelf tag “deal,” and can easily compare it to the everyday low price of a private label version of the same product, she will realize just how high the everyday price of the branded product is.

So, I think it’s detrimental to the brand as a whole, not to the retailer (who is more than happy to sell private label instead).

Ben Sprecher
Guest
Ben Sprecher
7 years 7 months ago

I love the phrase “panic couponing”; it so clearly encapsulates the mindset that I tend to refer to as “spray and pray.” Throw everything up against the wall and see what sticks.

The problem with that approach, as Bob points out, is that it deluges the shopper with an undifferentiated stream of junk offers, and it numbs him or her to both the features of the individual products, and to the medium (in this case, shelf tags) at the same time.

The solution: relevance. Invest the money that is currently going to driving small, irrelevant, numbing discounts to everyone into giving right-sized, relevant, engaging offers to the *right* shoppers. Done properly, a marketer can drive trial, re-engage lost shoppers, reward top shoppers, reinforce brand image, and save money at the same time. What’s not to like about that?

Dan Berthiaume
Guest
Dan Berthiaume
7 years 7 months ago

I don’t think an abundance of shelf tags with discounted prices is anything new in retail. Shopping has always contained a lot of background noise which most consumers simply learn to filter out. Minimizing tags might help, but shopping as whole tends to be irritating (at least for male consumers such as myself) and to a certain extent that can’t be changed. Online sales are booming for a reason.

Bob Phibbs
Guest
7 years 7 months ago

I encourage readers to checkout the pictures that accompany this article.

David Slavick
Guest
David Slavick
7 years 7 months ago

Am I getting a good deal when I shop the store? Am I delighted to “save more” when purchasing items featured with a lower price, positioned as a unique in-store featured price? Do I care if I can’t see the product label, but I know what the product is as I reach out to take it off the shelf? Should the retailer be concerned that their payroll and display costs are going up with this level of excessive price/feature push on the shelf? Does discounting of this type lessen the effectiveness of two-tier pricing for rewards members? The answers are YES to all of these questions. Desperation? I think not. Trial to observe effect on basket size compared to prior behavior by the shopper — I think so. A trend that won’t end soon — I think so. Newspaper inserts to highlight price/item deals are becoming less effective in influencing purchase, therefore highlighting price on the shelf with ugly/clunky tags is a new necessity.

Doron Levy
Guest
Doron Levy
7 years 7 months ago

I have to agree with The Doc. The extra tagging on product does take away from the merchandising visuals. Producers invest huge amounts of cash on labeling and packaging and most do a great job of conveying a message. Slapping on a coupon or other tag just takes away from that. There are better and cleaner ways to tag and offer coupons at the shelf level.

Hayes Minor
Guest
Hayes Minor
7 years 7 months ago

Tags have become awash in the sea of sameness down most aisles. It’s that “sea” that motivates marketers like myself to strongly encourage brands to start conversations with consumers BEFORE the shelf. Shelf tags clutter the environment, often times cause confusion and can’t possibly be pointed to as ‘effective’ at this point in shopper marketing.

Tony Orlando
Guest
7 years 7 months ago

Stores today are all hurting for business and price really matters to the consumer. With at least 8 drug stores every mile these days, it is a war for business.

Extra tagging is another way to say, “Hey, we’re overpriced, but here is a coupon to fix that.” It is a pain to me, but other smart or extreme shoppers treat is as a game, and they will talk about it with their other extreme shopper friends. My own brother has a basement full of toilet paper, shaving cream, shampoos, and other stuff he bought because it was either free or almost free with the extra coupons. Nothing beats free, and this will never end, so happy hunting for all of you extreme shoppers out there, as it should be a fun holiday season for deals.

David Slavick
Guest
David Slavick
7 years 7 months ago

A higher percent of the US population is under the poverty line than ever before. Shoppers are looking to save and in this environment, sorry, but having shelves “look nice,” leveraging the brilliant packaging/label design work and encouraging conversations just ain’t cutting it. Hate to state the obvious, but those tagging in the name of pulling more product through their channel are doing it for all the right reasons — make a sale. With ever tighter margins in grocery especially, no initiative whether for trial to observe and refine or even maintain as a standard practice is too difficult or disconcerting to try. Two-way dialogue to engender preference, reduce reliance on discounting, lift average spend and improve profitability on the average basket…amen. It’s a double edged sword and right now the knife is falling on the side of clutter, confusion and desperation.

Ben Ball
Guest
7 years 7 months ago

Let’s just hope this is not the ultimate implementation of “shopper marketing.”

Ron Whittington
Guest
Ron Whittington
7 years 7 months ago

As with anything, if sales tags become too prevalent they lose their effectiveness. As a shopper, if I need the product I will buy it regardless of whether it’s on sale or not. We are currently working with a company in London, ZBD Displays, which is making inroads with a new electronic shelf tag technology that allows retailers to change prices and do time-of-day promotions much easier. While the US is slow to pick up the technology, I can see that this will eventually take the place of the paper shelf tag — in the same way the UPC and scanners eliminated label guns and purple ink price stamps for us in my late ’70s Kroger days.

Dave King
Guest
Dave King
7 years 7 months ago

Store labor to sort, find and put up that many extra shelf tags must have been very time consuming.

Christopher P. Ramey
Guest
7 years 7 months ago

Hiding product to show the deal is shortsighted. At least from 30,000 feet.

Customers, on the other hand, buy individual products and they’re looking for deals. We may have a disconnect between what we think is right and what is effective.

Dennis Serbu
Guest
Dennis Serbu
7 years 7 months ago

It all adds to what Dr. Sorensen calls “Shopper Angst.” Add too much of it to the kettle of missteps and you have lost yet another customer. A study a few years back indicated that 70% of shoppers were openly antagonistic towards their neighborhood retailer. Maybe the Execs need to get out and wander a store every once in a while.

Herb Sorensen
Guest
7 years 7 months ago

Not many shoppers feel the need of a good shouting at, which is what this blizzard of tags is. As noted here, the shoppers autopilot soon recognizes this as just additional noise, and an impediment to finding the stuff they want.

Tim Henderson
Guest
Tim Henderson
7 years 7 months ago
Re: the attaching of clipped Sunday insert coupons on shelf products, I’ve never seen that done by a retailer. We’ve all seen instances of other shoppers leaving a coupon or two on the shelf for a potential buyer. Full disclosure, I’ve left my share of such coupons for other bargain-savvy shoppers. But I have to draw a line when the retailer starts attaching the coupons to the products. I have no concerns whatsoever about the store possibly looking cheap. My only concern here is that when retailers attach coupons to products, it’s the loss of a key marketing opportunity by CPGers. Without the manufacturer’s knowledge or consent, their packaging is being altered, and many companies have spent quite a few dollars to create that packaging. If retailers want to get involved in the distribution of clipped coupons at shelf, then they could possibly attach a coupon holder to the shelf so consumers can leave coupons there. Or, the merchant may want to begin distributing communications to shoppers to help establish some ground rules around leaving… Read more »
Carlos Arambula
Guest
7 years 7 months ago

All those shelf tags are a sign of the times.

To believe a cents-off discount’s only function is to attract new consumers into a franchise is simplifying the function of discounts.

During these current times, when the consumer lacks confidence, the discount helps a loyal consumer decide on a purchase when he might otherwise forgo the product — especially in non-essential items.

For the retailer, it gives them the ability to provide a quick comparison to other retailers on price offerings and an opportunity to increase the ticket average per customer.

The shopping experience becomes precisely what the consumer is looking for when budgeting becomes essential. Psychologically, the shopping experience turns from spending to saving.

Kai Clarke
Guest
7 years 7 months ago

Shelf tags are reflective of the increasing sensitivity of the consumer (and the manufacturer) to price. Price is now a key indicator of how a product will compete on the shelf, not its name, or promotion. Today’s products will be deemed successful based largely upon price, price, price….

John Caron
Guest
John Caron
7 years 7 months ago

Become? They already are. The key to the future of couponing is going to be context. In what context am I receiving this coupon and what relevance does it have to me? Mobile will provide retailers and brands the ability to deliver very targeted (I’d call them personalized) offers that are in context of the shopper’s brand preferences, purchase history, location, and current purchases (what’s in their basket). The filter is upside down today, whereby the shopper has to sort through the deals to find what’s relevant to them. In the very near future, the “coupons” will have to “sort” through the shoppers to get delivered to them when the shopper wants them. In that model, the noise and clutter diminishes and the efficacy goes up. Good for the shopper, the brand and the retailer.

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