Retailers: Advertising is Numbers Game

Apr 30, 2003
George Anderson

By George Anderson

Daniel Edelman, chairman, The Bon Marche, told attendees at the annual convention of the Newspaper Association of America in Seattle that papers needed to boost circulation if they wanted to receive a higher percentage of his company’s advertising dollars.

The Associated Press quotes Mr. Edelman as saying, “A larger audience would produce higher results, and higher results for us would warrant us spending more of our advertising budgets with newspapers.”

Howard Schultz of Starbucks and Jeff Brotman of Costco told convention attendees that their companies have focused their resources in other areas to grow business.

Mr. Schultz said Starbucks makes its employees its primary focus. Starbucks, for example, offered employees stock options and health care coverage even before the chain was in the black.

Happy employees make great brand ambassadors, says Mr. Schultz. “Our customers domestically and internationally have a need for human connection because whether it’s the Japanese or the French or the Italians, the human condition is the same.”

Newspaper advertising doesn’t work for Costco because it takes a targeted rather than mass market approach to drive traffic and sales at its warehouse clubs.

Mr. Brotman identified the average Costco customer as being “49 years old, married and with a household income more than double the national average.” Costco’s inventory reflects its focus on this consumer.

Moderator’s Comment: Are mass market media vehicles
the most effective means for retailers to drive store traffic? What do you see
for the future of retail marketing?

It is interesting to note that of the three companies
represented at the newspaper convention, the two doing the least amount of traditional
advertising are those that are growing the fastest.

The lesson here is happy employees who please shoppers
will create the very best type of advertising – customer endorsements. [George
Anderson – Moderator

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