Supermarkets Challenge Marketers to Produce the Best, Work as a Team

What do supermarket retailers really want? According to leading consumer product marketers, it's fairly simple: aisles that are clean and displays that produce attributable results.Getting there, however, is trickier than ever. Today, marketers must create more "personalized" displays that are targeted to each chain's needs; they must inject more flexibility into the overall presentation; and they'd better get plenty of retailer input -- upfront -- if they hope to find a spot in any of those clean aisles."The value of a display at the point-of-sale is more important than ever," says Cliff Medney, director of consumer promotions at Nabisco Foods Group, Parsippany, N.J. "There has to be a reason for that display to be there."Be PreparedToday, more thought is going into each display piece, agrees Rich Libonate, director of national accounts at Stroh Brewery Co., Detroit. "If you have to explain the display's message to the retailer, you'll never get it across to the consumer," he says. "They want to wrap their arms around a compelling idea that's easy to understand. We can have the greatest pieces of point-of-sale material anywhere, but if the retailer doesn't like it, it never gets up."Beer marketing, in particular, is now dominated by a confusing array of messages, notes Matthew Borgard, manager of promotional marketing at Barton Beers Ltd., Chicago, importer of Corona beer. "Supermarket retailers are as confused as consumers," he states. "They don't know what beer -- ice, dry, red, drafts, microbrews -- is going to be popular, and there are so many promotions going on at one time. So the mentality has become to go with whatever works while it's hot and roll with it."Some brands will always be price-sensitive, Medney notes, but the other elements must become more dominant. "When you're not on deal, you need a quality orientation similar to the one presented by traditional print and broadcast media -- bring the message down to the store level in a quality format."As a result of that need, graphics of all types are becoming more sophisticated, says Jay Price, director of trade marketing for LifeSavers, Planters LifeSavers Co., Winston-Salem, N.C. "The type of graphical representation on corrugated that is now possible makes the displays much more attractive," he says. "You can achieve better color schemes, and marketers are using more sophisticated co-marketing ideas and consumer tie-ins to add value on top of that."Although LifeSavers often uses prepacked corrugated units, the brand has achieved success with acrylic displays as well. "American Chicle does a good job with acrylics," Price notes of his competitor. "The quality of materials is rising across the board for all companies."That's particularly true for candy products, agrees Terry Kaminski, a spokeswoman for Brach & Brock Confections, Chattanooga, Tenn. "The quality of permanent displays is going way up -- it's very first class," she notes. "Brach is creating very modern, functional units, and so are our competitors."In part, she notes, that's because Brach's key displays focus on permanent units. But it also uses temporary displays to pick up incremental sales during seasonal promotions. Usually these are cut cases with a header card to ensure simplicity and make it easy to locate the merchandiser.Adaptability an AssetLocation and simplicity are critical for candy, Lifesavers' Price notes. "Operationally, we've realized that a prebuilt display was the only way we could reach the display levels we need. If a candy marketer reaches a 25 percent display rate on his pieces outside of seasonals, he's doing a phenomenal job."Some chocolate brands achieve higher results, Price adds, because they have the critical mass in the stores. "But for the most part, the numbers aren't really big. So if the process is going to be cost-effective, you have to be very flexible."At LifeSavers, that translates into corrugated prepacks that serve as either floorstands or counter units with the top layers removed. Other floorstands can convert to sidekicks when needed.At Stroh, displays are built on a modular basis, says Libonate. "Our approach is to use the c-store display as a base and add onto that to reach larger sizes with additional modules," he explains. "Flexibility is the key today. If I create a 100-case unit and the retailer says no, I have nothing to give him. But if I have a 25-case option that I can build on, then I'm still in business."LifeSavers has also become more flexible in what it provides in its prepacks, Price notes. "It used to be set, but we make a lot of flavors, and a lot of retailers don't match up with what we see as the proper selection for a prepack. Now, we're much more flexible about what we are willing to put into a prepack. We're working with bigger customers to create the mix they want. We've also built special units for some retailers, because we could justify it through volume potential."Smiling FacesWorking closer with a retailer often means supplying a customized message for that chain or hooking up with local events in each market. "Unless you've got the hottest thing coming down the pike, national promotions don't work any more," says Stroh's Libonate. "Retailers want promotions that are localized, especially if they can tie into a local event. Those are the things that put that certain smile on their faces."Stroh often creates an overall program that acts as a "shell" that can be customized for key accounts or individual markets. "It's more expensive to do it this way," Libonate admits. "But if you aren't retailer-oriented today, you're not going to get it done. Localizing a program has become a cost of doing business."Nabisco's Medney agrees: "Marketing is account-specific today, and a lot more gets discussed prior to producing the promotion. Retailers and buyers are more involved than at any time in my 15 years in the business. We are developing more specialized programs for individual chains to meet their needs and expectations than ever. It's become more of a strategic partnership in both development and marketing."A key reason for that upfront input and partnership approach is that many marketers are finding that stores are more restrictive about what they will let onto the floor. "There's a definite movement to the 'clean floor' look in supermarkets," says LifeSavers' Price. "They used to pile products up in the aisle and hang it from ends of racks and use waterfall displays. That doesn't happen very much now."The key reason, Price adds, is the need to entice busy shoppers: "Retailers are concerned with shoppability and the overall aesthetics of their environments. That makes our job much more challenging. We need to find the right formulas for success.""Retailers are trying to keep their stores from looking like circuses," says Stroh's Libonate. "They look at the display and ask if it fits into their store's look, if there's room, and if it is going to effectively sell more product."Some retailers have begun to limit shelf talkers and other small pieces because they add to the clutter, Libonate says. "Their goal is consistency of look. That's becoming prevalent." Larger pieces that are theme- or event-oriented are still welcome, he notes, so a large size is not a predetermining factor on its own.Big Can Be BetterThis trend has been noted by Frito-Lay Inc., Plano, Texas. In January, the company introduced a permanent display under the theme "Taste The Fun, Not The Fat." Combining low-fat products such as Baked Tostitos, Rold Gold Fat-Free Pretzels, Ruffles Reduced-Fat Potato Chips, and Tostitos Fat-Free Black Bean and Salsa Dips, the display has been sent to more than 2,000 supermarkets."When you can roll out a new display that provides an additional location for your products in 2,000 stores, you're giving retailers what they want," notes Lynn Markley, a spokeswoman for the company. "Retailers are looking for innovation and added value that helps them grow their business. That's what we will provide, in whatever form they want it."Stroh's Libonate agrees: "Retailers are still looking for strong promotions. They aren't trying to trade us down in size. They want to sell product. If the program and display are right, they'll take it."The Data ChaseMore and more, retailers are determining what is "right" by turning to marketing data and their own internal sales figures as generated at the point-of-sale.Marketers such as LifeSavers' Price say they thrive on such data: "The more sophisticated retailers are coming to us with scanner data from previous promotions, but the better ones know that we'll also be coming to them with specifics of what we expect to achieve with the new display. If we're good managers, we should be able to go to them with demographics and merchandise-response analysis and show them what they can expect to sell with a display and what their bottom line will look like when the promotion is over."Barton's Borgard agrees. "We encourage our national salespeople to monitor the results at each chain and show our accounts that we're experts on the numbers too," he says.At Coors Brewing Co., Golden, Colo., this evolving attitude led to the introduction six months ago of a "fact-based marketing" approach, says Bob Monroe, director of Coors' key account group.The system includes a preliminary model the brewer has developed to allow it to look at variables such as pricing, promotion and display materials. It then manipulates each factor to see how it affects the bottom line in each of a variety of geographical areas."In this partnership mode, we can give the retailers analysis and recommendations that will help drive not only our products, but the entire category of business," Monroe says. Another, more all-inclusive model for each channel of trade is being developed now, he adds.Coors' model makes it clear that display effectiveness is not just a matter of toting up numbers at the point-of-sale. Nabisco's Medney warns about the dangers of viewing numbers in that way. "You can see the incremental sales increases, but it's not as simple as attributing it to the display itself," he says. "It also has to do with price points, competitive messages that week, size and length of the promotion, placement and other factors. That's why it's so important to share information in a retailer/manufacturer partnership."That's especially true in candy sales, says LifeSavers' Price. "Eighty percent of candy sales are purchased on impulse. To make money on confections, you have to merchandise it well in multiple strategic locations." That, he admits, works against the "clean store" look that supermarkets want to achieve. "A clean store can cripple candy's sales potential, but it can aid consumers' desire to shop the store," he explains. "It's a balance that has to be found."Categorical PartnersIn fact, some marketers are taking the next step to category management in an effort to help retailers achieve their goal of presenting an organized, targeted message to the consumer. Coors has become a category partner with several retailers, says Rob Jefferies, assistant brand development manager for new products, including Artic and Artic Light. "We discuss the beer category as a whole and compare its profitability to other categories in the store, using Nielsen data and other fact-based marketing approaches to show retailers the potential," he explains. "We are helping them legitimately increase business in the entire beer category, because that obviously will pay dividends to us in the long run."The firm also uses this data to unearth less-apparent departmental relationships, Monroe adds. "We try to pair opportunities for the malt-beverage consumer in other categories, by taking it beyond the idea of cross-merchandising" he says. Knowing the propensity of malt beverage drinkers to buy another product, such as turkey hot dogs for example, offers retailers an opportunity to evaluate if they have a sales gap. "We're still evaluating how the beverage guy and deli guy can use that information, but there's no doubt that cross-correlating this type of consumer-propensity-to-buy data can have an impact on the supermarket's overall business."C-stores are even more willing to address category-management ideas, says LifeSavers' Price. "Grocery stores have not reached the pace of interest that c-stores have shown," he says. Adds Nabisco's Medney, "Retailers definitely want to maximize their profits per linear foot. We are trying to be proactive with that in several of our categories right now. It's part of the value-added message and the drive to be partners."

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