CPGmatters: Supervalu Boosts Brands by Re-engineering Center Store

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Aug 10, 2010
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By Dale Buss

Through a special arrangement, presented here for discussion is
a summary of a current article from the monthly e-zine, CPGmatters.

When
it came to the crucial but outmoded center of their stores, Supervalu executives
realized that shoppers were drowning in merchandising messages, price promotions
and other communications — hurting the company’s
CPG suppliers as well as the chain’s own performance.

“We would talk to customers and they would tell us that they didn’t
think the center store was clean,” Shawne Murphy Johnson, Supervalu’s
group vice president of brand strategy and marketing, told CPGmatters. “Then
when we dug into what they meant by that, it wasn’t what you might think;
it wasn’t things like, ‘The floor didn’t look swept.’ They
were actually commenting about the amount of messaging in the center store
and telling us it was way too much, or just confusing. They were feeling ‘over-spoken
to.'”

Supervalu found shoppers had gotten frustrated by increasingly
dimensional brand promotions that were attached to and hanging from shelves
and that actually made it more difficult for them to access the products themselves.
And some in-store media underperformed. For example, floor graphics would get
dirty by the end of their cycle.

As a result, brand marketers — including
Procter & Gamble and Mars — are
working with Supervalu banners as well as marketing services giant Valassis
to rationalize and reduce signage in the center aisles, emphasize promotional
pricing at the shelf, heighten the effectiveness of brand messaging at point
of purchase, and provide consumers with more relevant and useful information
about the products and how they can be used.

Supervalu worked with Valassis
to come up with three basic types of streamlining and accompanying improvements
in message efficacy.

The first involved signage. Instead of one or two or even
three-dozen different types and sizes of signage in the center store, Supervalu’s
new plan has just two essential iterations. One of them is a four-by-six-inch
sign at shelf’s
edge that communicates the brand, product attributes and key values. The second
type trumpets price.

The second manifestation of Supervalu’s streamlining
came in how it handles point-of-sale coupons. Valassis and Supervalu contrived
a new on-shelf coupon dispenser, just a few inches square, to attack this challenge.
It allows CPG brands to use miniature signage on the dispenser that shoppers
see from three sides. And the hard-plastic fixtures have clean and unobtrusive
lines. Mars, for example, “loves this fixture because it really takes
what they’re
trying to do with their packaging and brings it out to the consumer by putting
the same image that’s on the packaging on the box. It’s pure branding,” said
Mike Kowalczyk, in-store general manager at Valassis.

Third, Valassis and Supervalu
overhauled how they dispense “consumer
information” such
as recipe sheets and nutritional brochures. CPG brands including Bertolli and
McCormick were interested in effectively communicating with shoppers how they
could make meals using olive oil and spices, for example. But this imparted
too much information for a mere sign, and putting a stack of flyers inside
the supermarket door wasn’t going to cut it either.

So Valassis came up
with a standardized, cardboard “Take One” dispenser,
with a changeable header, that it calls InfoPop, which can dispense recipe
sheets, coupons, sweepstakes entries, mail-in rebate forms and all variety
of important brand information to shoppers.

Overall, Ms. Murphy Johnson said, “instead
of 15 or 16 different [in-store marketing] vehicles, we’re down to just
five or six. Instead of four different sizes of things, we have one size. And
we’re not putting messaging
on the floor anymore.”

Discussion Questions: What do you think of Supervalu’s attempts to de-clutter
messaging around the center store? What move (rationalizing signage, on-shelf
coupon dispenser, “Take One” recipe dispenser, etc.) do you think
holds the most promise for improving center store performance?

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19 Comments on "CPGmatters: Supervalu Boosts Brands by Re-engineering Center Store"


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Bob Phibbs
Guest
10 years 8 months ago

A classic example of the analytical approach to shoppers, “more signs = more information = higher sales when feeler personalities want choices whittled down so shopping is easier. Look for shopper personalities to become more valuable in coming years.

Ryan Mathews
Guest
10 years 8 months ago

I think it’s a great move!

The store is a media and like any media it must follow the laws of effective communication.

Nobody could watch a television station that simultaneously broadcast hundreds of shows at once or listen to a radio station where the deejay played 40 tunes at the same time.

Why should a store be any different?

As to the most effective move–put me down in the sign rationalization camp.

Steve Montgomery
Guest
10 years 8 months ago

Visual clutter is an issue for many retailers, not just supermarkets. The idea that a few signs or other forms of customer communication is good so more must be better has been around a long time. As the article points out what the consumers sees in the individual messages but a mass of “stuff” that as the article points out can be perceived as making the store dirty.

I see part of this effort as a retailer taking control of their retail space rather than letting it be controlled by a myriad of vendors. That is something we advocate all out clients do.

David Livingston
Guest
10 years 8 months ago

Maybe I’m disconnected but recipe sheets, coupons, sweepstakes entries, and mail-in rebate forms to me are very annoying and distract from what is really important–the price of the product. Aldi would never insult their customers with such nonsense. Someone has to pay for all that clutter; even if the clutter is reduced, it’s still there. Smart consumers know they are paying higher prices to fund the clutter and advertising. I realize that plain vanilla chain stores need to dazzle the consumer with visual aids to make up for their lack of price competitiveness. Finding the right mix is important and perhaps it simply got out of hand at SuperValu.

Ben Sprecher
Guest
Ben Sprecher
10 years 8 months ago
This is a classic example of the Econ 101 concept called “the tragedy of the commons.” When you have a free public good (like a traditional town commons for grazing your sheep), it is in each individual’s self-interest to use that public resource by grazing their sheep there, even though it lowers the value of the pasture for everyone else. Eventually, the commons becomes over-grazed, and it is worthless to everyone. In the case of supermarket center-stores, the “commons” is all the available 2-D and 3-D space on shelf-edges, floors, and aisles that anyone can use. Each company sees some incremental opportunity by adding one more display, one more shelf-talker, one more floor sticker. But each new addition further overwhelms the shoppers’ senses and dulls the impact of all the other messages. In the end, you have such visual clutter and cacophony of signage that nothing works, and the shopping experience is ruined. In a broader sense, this is the logical end-result of untargeted shopper communication. Each shelf-talker or floor sticker is visible to everyone,… Read more »
Mark Johnson
Guest
Mark Johnson
10 years 8 months ago

They seem to be a little late to the game, with Kroger and Safeway miles ahead of them at this point. The effective use of shopper marketing, loyalty, and engagement strategies will determine how much they can get out of their redesign.

Joan Treistman
Guest
10 years 8 months ago
I am surprised whenever retailers and marketers are surprised that consumers are not paying attention to the signage and display material that clutters their shopping environment. It’s not difficult to document the in-store buying process (call me and I’ll tell you how). You can observe shoppers making their choices and OMG, no signs are observed or used. Consumers oftentimes make a beeline for the category display, recognized by packaging for the products themselves and then use packaging for the brands to help them decide what to buy. I’ve been using eye tracking for over thirty years to record what shoppers don’t see and what they see in the store. Upon interviewing the shoppers immediately after the process they are shocked to see (when it’s pointed out to them) all the signage, but hard pressed to consider using it in the future…unless they were having difficulty finding what they are looking for and the signs seem to have some immediate communication advantage (rarely). But signage was never what consumers expected to use. It wasn’t part of… Read more »
Gene Detroyer
Guest
10 years 8 months ago

Been there, done that.

How many times have over the last 40 years have supermarkets gone through this process? Some retailers have actually stuck to their rules and regs for signage. Most have slowly had the restrictions broken down.

The problem is that obnoxious signage works. It is meant to interrupt. It is meant to confuse. It is meant to make the shopper do something they would not normally do. As long as it works, marketers and suppliers will continue to try to implement it.

While the shopper says they want a cleaner environment, they will be the first to react to bold signage activity.

Gene Hoffman
Guest
Gene Hoffman
10 years 8 months ago

What Supervalu is doing will be good for CPG companies, make the center store cleaner, appeal to its shoppers and produce better sales results for Supervalu, which have been soft.

But organized cleanliness, desirable as it may be to shoppers and CPG companies, may not be enough for all of SVU’s important constituencies. Supervalu should build upon this fine move and further energize its shopping and pricing environments to win the hearts of Wall Street once again.

Mark Price
Guest
Mark Price
10 years 8 months ago

The famous jam study demonstrates how consumers purchase more often when there are fewer messages to contend with. Supervalu seems to be moving in that direction. Taming the CPG manufacturers and structuring communications to present a cohesive experience is a positive step forward.

The next step is SKU rationalization–reducing the number of facings or different SKUs, in each category to the ones that really matter. After all, how many variations of orange jam do people need? The fewer varieties, up to a point, the higher the revenue from the category. What you want to do is prune the category to what really matters, without losing the key brands that consumers expect.

Supervalu is on their way for this initiative as well. When they are done, they will have taken a significant step to improve the experience for their core customers, who are the most important to the business.

Warren Thayer
Guest
10 years 8 months ago

Rationalizing signage is long overdue for many retailers. Manufacturers afraid of being left out will push signage that they think meets their own needs (and often it doesn’t), without consideration for the consumer or the retailer. Weak retailers give in and just let the signage go up, rather than take a firm stance. Supervalu is taking control back, and putting more thought into merchandising strategy and tactics. Good for them.

Camille P. Schuster, PhD.
Guest
10 years 8 months ago

Great example of talking with consumers, hearing what they say, and experimenting to modify the store to provide what consumers want. The next step is talking with the consumers to hear what they say about the experiment and try a new experiment. Great example.

Cathy Hotka
Guest
10 years 8 months ago

Great move! …But why now, and not years ago? It is annoying for customers to have to negotiate countless tags and signs that announce supposedly discounted prices and promotions ($3.99 per gallon is a Safeway EDLP price? Really?) No wonder traditional grocery stores have seen their market share erode.

tony schiano
Guest
10 years 8 months ago

Simplifying the customer’s experience is always a good thing. But saying that SVU is ‘reclaiming” its center store from CPGs is disingenuous. All that clutter is there because SVU got paid by suppliers to put it there. Their efforts now are noble, but not at the root of their problems: which are leadership, vision, strategy, extremely high pricing, and poor ops and execution.

Ralph Jacobson
Guest
10 years 8 months ago

Every grocery retailer needs to step back and view their center store shelves from the shopper perspective. Does it look like “everything’s on sale”? Then that’s the first issue. The store loses credibility if that’s the case.

Then take a look at the signing. Even one or two types of signs can become a flood of information overload to which the shopper becomes blinded. They don’t read ANY of it after a while.

Start fresh. Highlight the vital few items to draw them to a purchase decision, then backfill their shopping with complimentary items that are promoted with a clean, simple, cluttered appearance.

Kai Clarke
Guest
10 years 8 months ago

Boring! Standardized signs and messages destroy the value of unique branding and marketing! Consumers look for shelf talkers that point out value and savings! SV is moving down the wrong path with their standardization…change involves being different, not the same….

James Tenser
Guest
10 years 8 months ago
If indeed the retail store may be regarded as a communications environment for brand messages (as I frequently maintain in this forum), then the Supervalu decision carries several important implications for shopper marketers. One, we may postulate that there is an optimal level for in-store messaging that balances several factors, including: media revenue to the retailer; ability to stimulate profitable category sales; beneficial impact to the store banner reputation; and shopper experience and perception. Zero messages would self-evidently be too few, but there would be a diminishing-to-negative return on incorporating too many. Optimizing the in-store communications environment and defining messaging rules should thus be a systematic pursuit for the retailer. Two, from this story I infer that Valassis has evidently won the contract to be Supervalu’s lead in-store communications adviser. This seems to leave its arch competitor News America In-Store out of the aisles. To me it makes sense for a large retailer to retain counsel in this area, since in-store access to shoppers is a significant asset that should be managed for optimal benefit.… Read more »
Shilpa Rao
Guest
10 years 8 months ago

Good move on Supervalu’s part. Uncluttered stores are definitely more pleasant to shop. And I totally resonate with fact that the floor stickers were making it look more unclean.

Apart from clearing the clutter, retailers also need to focus on the key themes in the store and it’s important that these themes propagate to every aisle to deliver a unified message in the store.

Standardizing the shelf edge promotional labels really makes it easy to access the products. However, these need to be artfully designed or else they’d be lost, without the target customer ever noticing them.

Justin Time
Guest
10 years 8 months ago
I am one of the few believers in the center store. I think there is so much potential in that vast space found in every supermarket, be it Aldi, or Wegmans, or in between sized A&P Fresh Market. That being said, product packaging is the absolute first thing a customer looks at when he/she is roaming the center store aisles. The package has to stand out from the clutter. Own Brands at Great A&P has been addressing this issue for several years. When I want Italian, all I have to look for is the distinctive packaging of a 150 SKU base private label line, Via Roma. When I want organics, all I have to see is the GreenWay symbol, and I am assured of the highest quality organics at the lowest prices. When I want the highest quality private label over the counter items in HBA, I reach for the standout products with the distinct blue red and black labeling of Live Better. This bright bold, whimsical packaging on white background, stands out from the… Read more »
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