In-Store Marketing
Angee Walls, managing director, Catalina Marketing UK, examines in-store marketing and how it can be used to good effect, particularly during these tough economic times…
The recent press obsession with the current economic climate has created a change in attitude among consumers and retailers alike. While the truth of rising food prices has pushed retailers to establish cost effective ways to retain customers, consumers are looking for every possible opportunity to stretch their food pounds further. This creates a potential problem in customer retention, as the average customer will shun traditional loyalty habits in order to shop around and find the best deal. It is down to retailers to asses these changes in attitude and adapt their approach accordingly. For example, threats of economic downturn often lead to consumers cutting down on luxuries such as restaurant meals, giving grocery retailers an opportunity to market their products to a previously unavailable audience.
Despite these changes in behaviour, encouraging loyalty to a particular brand or retailer at a time when many consumers are tightening the purse strings is a significant challenge. The retailer will need to override the customer’s immediate instinct to search for low prices and shop around for the best deal, rather than to remain loyal to any one brand. Due to a largely saturated market, the majority of retailers will compete for customers by cutting costs, meaning low prices alone are no longer enough to guarantee a winning approach. It is the additional incentives which will add that all-important market advantage.
In order to weather the storm of the current economic climate, retailers need to reassess their approach to customer loyalty, ensuring that occasional and first time customers are targeted as well as the regular customers that are reached through traditional loyalty card schemes. Point of sale campaigns and special offers are often the first step in building loyalty, and while they can be an effective method of increasing basket size, they don’t encourage repeat visits, or increased spend. Some brands can also be concerned about the possible damage attached to point of sale promotions.
Loyalty card schemes are also a popular approach with many UK retailers, with Tesco’s clubcard, and Sainsbury’s Nectar scheme remaining a successful option with regular shoppers. However, relying solely on loyalty card schemes leaves many retailers neglecting prospective new customers and occasional shoppers. Using data purely derived from loyalty card details also presents a fairly limited view of shopper demographics, as it only takes into account regular customers who use their loyalty card on every visit.
A good way to approach the loyalty question is to assess which demographics retailers are looking at to understand their customers. While in the past, traditional demographics such as age and sex have been indicators of customer’s buying habits, retailers are increasingly looking at customers’ basket content to asses their lifestyle and target them with relevant offers.
One approach which has proven to be highly successful in the US and other parts of Europe is to present customers with coupons offering incentives at the till. By analysing basket content and presenting customers with a relevant and targeted communication, retailers can not only gather current, accurate data on what is being bought, they can also present newer customers with a reason to return for another visit. This approach can also be integrated with existing loyalty card schemes in order to develop a full customer relationship management strategy.
This activity not only gives the customer value for money but also encourages repeat visits, unlike point of sale or shelf promotions, which will decrease overall spend but not give customers a reason to return. It also effectively targets the occasional and first time customers that would not sign up to a loyalty card.
The key to truly understanding customers and creating long term loyalty is to appreciate the fact that UK consumers are bombarded daily with thousands of marketing messages, and are fast becoming cynical towards the industry. In order to truly engage, in a manner that will create a positive brand image and encourage repeat visits, retailers need to offer something different and relevant.