NGA: Independents Can Gain Ground with Digital Marketing

Discussion
Feb 23, 2011
Ron Margulis

As mentioned in my
column last week on mobile marketing
, the
independent segment of the supermarket industry has never widely been considered
to be at the vanguard of innovation. In fact, it occasionally seems that independent
supermarket owners are being dragged into the 21st century kicking and screaming.

But
there are certainly some community retailers that understand the potential
impact of new processes and technology. This was proved at a workshop on digital
shopper marketing at the National Grocers Association’s annual convention in
Las Vegas last week where about 50 retailers heard experts discuss how to increase
sales and margins through the enhancement of the store website and the use
of social media, search and (again!) mobile marketing.

Curt Alpeter, executive
vice president of MyWebGrocer, started the session reviewing the digital tools
available to retailers, including search engine optimization. He also discussed
the importance of the shopper having control of how, when and where messages
and offers are communicated.

Arthur Ackles, director of marketing at Roche Bros.,
gave two case studies on how effective digital marketing can be if done right.
In the first example, Roche Bros., an 18-store chain in New England, mailed
cards listing a personalized website with customized offers to 7,600 shoppers.
About 10 percent responded by logging on to the site and 91 percent of those
shoppers read through the entire offer and took some action. The program had
responses four months after initial mailing.

In the second example, Roche spent about
$48,000 to place ads on search engine sites and conduct a search engine optimization
program, which resulted in $1 million in incremental revenue. The retailer
is still seeing about 100 net new customers from the effort per month.

Roche
also has online shopping through MyWebGrocer, with an average basket size of
$150, more than half of which is incremental, Mr. Ackles said. He added that
online sales are now the equivalent of a small store with considerably less
overhead.

Discussion Questions: How important is digital among the marketing tools available to independent retailers? Will digital marketing spending exceed traditional marketing tools by 2015?

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5 Comments on "NGA: Independents Can Gain Ground with Digital Marketing"


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Ryan Mathews
Guest
10 years 2 months ago

I want to begin by respectfully disagreeing with the premise that independent grocers sit low on the innovation totem pole. Frankly, I don’t think that could be more wrong. It’s the 1990 style traditional chains that were the slowest to embrace change.

That said, digital is a tool. Will digital spend exceed traditional ad spend in less than four years? Maybe, but it’s hard to see unless you define digital so broadly that it takes in everything from social networks to mobile telephony and even then there’s a question in my mind about actual cost.

Holiday Market, the local independent supermarket I shop at, has a Facebook page which I suspect costs much less to maintain than a weekly flyer.

Will progressive independents embrace digital marketing? Of course! The question is how popular and effective will it be with their customers.

Max Goldberg
Guest
10 years 2 months ago

Digital is here to stay and small grocers that don’t embrace it in one form or another will be at a significant disadvantage. The beauty of digital is its relatively small entry fee and incredible flexibility. It does not require a large budget to get into digital. It takes commitment, persistence and a willingness to experiment, track results and try again.

Dan Frechtling
Guest
10 years 2 months ago

Digital has demonstrated the ability to act as an equalizer, not just a medium, across key retail functions.

In Real Estate, digital provides a virtual presence where low development costs make it far easier to match big players.

In Merchandising, sourcing arrangements extend shelves beyond what an independent could achieve in a physical store.

In Marketing, technology for targeting and delivering messages facilitates both low cost and highly differentiated communications.

In Operations, third parties enable best in class hosting, order fulfillment, customer support and other services.

In a 15-year span, digital has been a great leveler for industries from retail to entertainment to business services. It’s encouraging to see independents and regionals such as Roche Bros. capitalize as well.

Lee Peterson
Guest
10 years 2 months ago

The ‘digital question’ is not only with marketing spend, but also based on how consumers will interact with the experience provided–web, store, hand held. Those that deny the fact that it’s all three are in peril, independent or not. For a great emulator, just check out Whole Foods’ app–that is the beginning of the inevitable change in the way food retailers will think going forward.

Camille P. Schuster, PhD.
Guest
10 years 2 months ago

Independent retailers often have the advantage of knowing their consumers better than a big chain knows its consumers. Innovation for the sake of innovation is not an answer. Using tools to reach your consumers in a way that fits their lifestyle and providing information that is relevant to them is effective. Independent retailers have the opportunity to do this using whatever tools are most appropriate for their consumers. Whether or not an independent retailers does or does not use a particular tool is not a measure of innovation.

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