Retailer Platforms, Programs & Promotions: Get on Board

Don't spend too much time contemplating the difference between a retailer platform, a retailer program and a retailer promotion. Just know that when it comes to retailer-driven marketing activity, it behooves consumer packaged goods companies to get involved.Successful retailer-driven activity can benefit brands in many ways, including guaranteeing in-store merchandising support, reinforcing brand equity, driving trial, increasing engagement and incremental sales, adding brand visibility, and driving loyalty.Although participation in these efforts is not mandatory, brands are often strongly encouraged to do so. And saying, "No, thanks," according to one expert, can result in a brand "losing ground" with the retailer.Not all platforms, programs and promotions are created equal. Those that work well tend to do so because of upfront collaboration with the retailer.Does terminology matter?To understand these joint efforts, it helps to understand the terms platform, program and promotion. Some say the words are used interchangeably, others say they are distinct. "Our industry needs a more common language to create more consistency in how these terms are used," says Anne Chambers, chief executive officer of The Capré Group, Atlanta.While that hasn't yet happened, there are some general points on which many agree. Platforms are bigger in scope, insight-driven, span categories and departments, have involvement from multiple brands, and support a calendar of activity. They are "generally occasion- or lifestyle-based," says Gary Gatton, vice president, shopper marketing and shopper insights, Kellogg Co."True platforms are large, strategic and sustainable efforts that in many ways begin to define for a shopper what the retailer's brand banner stands for," says Chambers. Ideally all programs and promotions are then executed against them. "If manufacturers align their brand programs or assets to a retailer platform, it is a much more strategic decision and effort than simply 'doing a promotion.'"At supermarket operator Safeway, Jocelyn Wong, group vice president, shopper marketing, says a platform example would be the retailer's "10% Goes Back to Schools" initiative. Shoppers purchase any of several thousand specially tagged items, and 10% of the purchase price goes back to the school of their choice. The platform runs for several weeks each year. Campbell Soup Co.'s Chris McGown, senior group manager, integrated shopper marketing, finds programs and promotions to be more tactical – "still based on shopper insight, but less scale."Some CPG clients of Booz & Co. use the term "programs" instead of "campaigns" to signify an initiative "broader than a flight of ads, and that cuts across paid, owned and earned media, as well as integration of retail activation elements," says Matthew Egol, partner, consumer, media and digital practice. He adds that at Booz, platforms are the building blocks on which programs are developed, although not all programs necessarily need to stem from a platform.A multi-week meal solution program at Safeway includes several brands as partners and has multiple touchpoints, including in-store and ad components, says Wong. One-off or short-term events are considered promotions; think a 10-for-$10 deal or "buy one, get one free." During Safeway's 2011 back-to-school effort, a one-week "buy two, get one free" school supplies promotion was held."The nomenclature is important because it's how we talk and relate to each other, but it's not the biggest idea here," says Alison Chaltas, executive vice president at GfK, Westport, Conn. "The biggest thing as we move up the ladder from promotions to platforms is doing so in a way that is insights-based, collaborative and meets shopper needs."Retailer/Brand RelationsThere is no one set way in which retailers share their marketing initiatives with CPGs. Some have a calendar, while some host a conference or invite brands to their annual meeting. With others, details can come through a buyer. "The way we hear it, and the lead time, varies wildly," says Anne Jones, vice president, shopper marketing and business development, Kimberly-Clark.And many retailers are reluctant to share strategy and direction "with suppliers to protect against losing competitive advantage," Capré Group's Chambers says, creating a barrier in working together.Campbell's McGown says these retailer initiatives historically have been more "pay to play" for brands. "In the past, it was mostly the retailer steering the ship on a custom program. At the same time, we developed more brand-centric programs and in-store materials on a national basis, which we would then leverage at the store, if not the headquarter, level."While that still exists, McGown says what's growing is the instances of manufacturers and retailers collaborating. "Ideally we're focusing on the key drive periods that are of strategic importance to both of us, aligning our goals and objectives, and identifying the best ways to work together to in turn create value for the shopper," adds McGown, who works mainly with Walmart and Sam's Club.These joint efforts can be initiated from either the retailer or the brand, but James Rushing, partner at A.T. Kearney Inc., finds that most are actually manufacturer-driven since retailers realize that the major brands are the ones driving their respective categories. "Retailers are more open to their vendor partners and are even saying to brands, 'Come to us with ideas.' Larger food retailers in particular are asking," he says. "They need something that is customized to their environment."Joint Success MetricsSuccess comes for both brands and retailers when shoppers' needs are met and solutions ("that get beyond price-based messages alone," says Egol) are offered. Although participation in these efforts isn't mandatory for brands, larger CPGs (and especially the category leaders) are strongly encouraged to do so. "You can say, 'No,'" Egol says, "but you lose ground with the retailer." So brands need to participate in at least some and have to determine where their objectives best line up with the retailer's. Is the effort geared toward the same consumer or occasion that the brand is targeting? Is it aligned with your path-to-purchase strategy? Is it based on shopper insights? How will it be measured?"A successful program is one that provides the right offers, to the right shoppers, with the right delivery vehicle," says Ron Berry, senior vice president, retail services, at Spire, Monroe, Conn. Defining specific ROI objectives at the start is in everyone's best interest. The measured metrics may include: year-over-year sales, brand awareness, in-store traffic, basket size and in-store merchandising execution."Going forward, both retailers and suppliers should be looking at joint success metrics for these platforms," says Andrew McMillin, shopper marketing vice president, Coca-Cola Co. "Did the effort drive the traffic and conversion intended? A shared view of success would make these activities even more powerful for both."If the goals and objectives aren't met, "retailers should conduct an analysis and set an action plan to improve results for the next program," says Ramin Eivaz, chief marketing officer, Acosta Sales & Marketing, and president of Acosta Marketing Group. "Brands should follow suit."Kimberly-Clark's Jones says constant evaluation is usually taking place. With every retailer, there are platforms, programs and promotions that work great, and some that don't. "But you can't necessarily make a blanket statement that 'X' program doesn't work. It may just need to be changed or improved in its execution."Trending OpinionShopper Marketing's "Trends Report 2012" published in January included the chart above showing how consumer product marketing executives rate the ability of specific retailer-driven marketing platforms, programs and promotions to deliver a return on investment. Under the condition of anonymity, a few executives shared their thoughts on specific retailer efforts, identifying if they are a platform, program or promotion:CVS/PHARMACYExtraCare – "This is a platform and the system that CVS drives its business and strategy behind. This tool provides the opportunity to reward and reach consumers while evaluating the impact of a brand's initiatives. Overall, it's a great one.""We have the ability to reach 69 million-plus cardholders and target our efforts to meet our brand strategy and business needs. It provides a platform to evaluate our efforts and apply these learnings to future programs. Vendors have access to the system and Experian data is layered in, allowing for a deeper dive into demographic information.""The ExtraCare portal can be slow and challenging."Gas Rewards – Program. "The retailer executes this in-ad and in-store as an offer-driven event. CVS would have considered this a platform during the summer of 2011; it was the key program they were driving manufacturers to participate in.""CVS felt that this program was successful in driving sales and traffic, and as a result, has enhanced this program to be the gift card programs. The challenge with this program is that liability increases significantly when it is a gas card vs. Extra Bucks. The consumer can get the gas card at the moment of purchase, where with Extra Bucks, they have to come back for a second trip to redeem. Even if the gas card is never used, we are liable for the redemption."WALGREENSRegister Rewards – Program. "The retailer has taken a Catalina tactic, branded it as its own, and trained shoppers to embrace it. It is easily accessible, and the retailer communicates it regularly within the circular and in-store.""Key to the program is the inclusion of a math table in circulars showing the net 'like paying' price. This has helped give Walgreens a competitive edge against other retailers with loyalty cards."WALMARTThe biggest opportunity from a Walmart program perspective is to continue to work on marrying up the merchandising (feature/displays) with the marketing programs. Walmart is working toward this in 2012.Game Time – This is considered a platform and leveraged twice a year, in September and in January, for the football season and the Super Bowl. "It's primarily themed around food and beverage. With Action Alley being reopened for merchandising, there was significant merchandising support for this event last fall and in January."Back to School Savings – Platform. Leveraged in mid-July through August.Family Moments – Platform. "Said to be a Procter & Gamble-led initiative."TARGETBack to School – Platform. "It ties into a time of the year when Target is advantaged. The retailer likes to promote the staples (notebooks, pens, paper), so getting merchandising space for other categories is difficult."Big Brands, Small Prices – Promotion. "Situational. Target seems to leverage the same few brands for each of these promotions throughout the year."The Great Save – Platform. "Good because it's cross-category and lends itself to those stock-up items, but it is very predictable for competitors to pre-empt."

Retailer Platforms, Programs & Promotions: Get on Board

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