Photo: @melpaul199 via Twenty20
Will retailers stop the presses on print circulars?
Walgreens reportedly ended its print circular last fall, Target last November and CVS at the close of 2021 as comfort with digital circulars and coupons has grown over the pandemic.
CVS told The Sun Chronicle in Attleboro, MA, that an abridged print circular would be available in stores, but newspaper inserts would cease. CVS said its customers ”were more digitally engaged than ever.”
Walgreens announced its shift to digital circulars last October at its Investor Day. John Standley, EVP and president, Walgreens, told analysts, “We are shifting investments from mass promotions to mass personalization. In the midst of the pandemic, we transitioned away from 18 million weekly print circulars to a digital circular that this month will be fully personalized to each individual customer.”
Digital circulars have been promoted for their ability to personalize content and target customers based on past purchases, gender, location and other factors.
Dick’s Sporting Goods said its shift to digital helped optimize pricing and promotions to boost margins. Speaking at an investor conference last week, CEO Lauren Hobart said, “We used to have blunt instruments in the newspaper, where pricing had to go down for eight pages of items or whatever it was, and you had to release that six weeks before. You had no idea what the market is going to bear or what inventory levels would be. We are now literally making day-to-day decisions.”
Retailers still produce circulars because it’s part of the shopping routine for many customers and the digitally-challenged, including many elderly shoppers who missed the digital shift.
One print circular believer is Bed Bath & Beyond, which found a shortage of print circulars due to paper supply and labor issues dragged down store traffic during the summer and early fall last year.
Mark Tritton, president and CEO, said on a quarterly call in early January that circulars contain the chain’s popular coupon, but it’s also “the connection point” for customers to explore the website and come into the store. “We artificially cut off that lifeline, that regular rhythm of communication to our customer. And it was a big mistake,” he said.
- Down to Business: As some advertisers move online, others stick with print – The Daily Gazette
- CVS flyers won’t appear in The Sun Chronicle in 2022 – The Sun Chronicle
- Walgreens Boots Alliance, inc (WBA) Investor Day – The Motley Fool
- DICK’S Sporting Goods Presentation at BofA Securities Consumer and Retail Technology Conference March 9, 2022 – Dick’s Sporting Goods
- How Personalized Digital Circulars Deliver More ROI for Retailers – Catalina
- Notice to readers: Target to cease inserts – Kingsport Times News
- Bed Bath & Beyond (BBBY) Q3 2021 Earnings Call Transcript – The Motley Fool
- Bed Bath & Beyond Inc. Reports Third Quarter Results (Ending November 27, 2021) Delivering Strong Gross Margin Performance – Bed Bath & Beyond
Discussion Questions
DISCUSSION QUESTIONS: How relevant are print circulars as part of the shopping journey for most consumers today? Is there a way for retailers moving to digital to bring their customers along who are comfortable with print circulars?
Poll
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We have been predicting the “end of printing” for several decades, and the declining health of the printing industry suggests it has been happening in slow motion for a while now. As more shopping is done via mobile devices, this trend is going to continue. Some retailers, however, cater to an audience that is very “circular friendly,” such as grocers. The numbers will drop, but I’m not sure it will ever reach zero in my lifetime.
Stopping print circulars has been a topic in retail – especially food retail – for years. But until another way to collect the co-op funds is in place and all parties, including the CPGs, agree to it, print will stay. Weekly circulars are little more than a tool to get funding from manufacturers, so the manufacturers have to be included in any change.
This is a pendulum that I think will continue to keep swinging. What’s old is new is old is new. As a lifestyle branding piece, they can be effective but pinpointing effectiveness as a volume driver requires a coupon element. Bed Bath & Beyond had moved away from the circular, then moved to a more lifestyle catalog, much like what you see with Crate or Resto, then back to the typical circular. I’m sure we will see this continue to repeat.
Print circulars still play a role, especially among older demographics. However there is no doubt digital is now more significant and has the advantage of flexibility, personalization, and being a better generator of data on redemption, etc. Digital is also more cost effective. One thing I would like to see eliminated is the amount of circular junk USPS stuffs in our mailbox. All of it is thrown in the trash!
Amen! Restoration Hardware’s 600 page catalog that was sent to some of my friends and I for a couple of years was the worst offender – since none of us had ever shopped there.
And then there are Thursdays — a leftover from when Sears was a something. These days my only hope is that no “real” mail has been tucked in them, as they make their journey from mailbox to recycling bin, with no stops in between.
I am with you on Restoration Hardware. In our apartment building, there is a recycle bin in the mailroom. The day the RH catalogue comes out is the day that the recycle bin overflows. It is hard to imagine that there is a payout for RH with that catalogue.
Circulars, catalogues and every sort of junk in the mail. With the digital age, most anything that is important comes to our phones or computers. One can go days without emptying the mailbox and have no fear of missing anything meaningful.
Many regional grocers have already discontinued the use of print circulars distributed in the newspaper with little to no impact on sales. Given the lead time needed for these circulars, the blunt and less than effective distribution, and the volatility of the supply chain we will continue to see a decline in use of these. Yes, some customers will miss them, but most are not going to switch retailer loyalties when it does not show up in the newspaper. Retailers spend billions to capture and identify their customers and most have a very high capture rate. It is time to leverage that investment instead of throwing a print circular at the wall to see what sticks.
Very good points Perry. In our household, we don’t get any print newspapers and all of the print circulars we receive in the mail go directly to the trash except for one – the Costco ad. However if the Costco ad arrived digitally via email, we would use that instead. With a digital circular delivered in the brand’s app, consumers could add the items directly to their shopping list, which would create more brand loyalty.
Print circulars’ death knell is premature to call in 2022. There is a role for the print circular that is less frequent, more focused on tent events, and limited to the most responsive customers. The shift from print to digital has reached critical mass, but don’t ignore the intelligent and selective use of print circulars.
This can only be a matter of time. As the generation that is still uncomfortable with digital passes, the presses will stop. In the short term, retailers really should look at how effective their couponing is not just as a total but also by area, as large city center areas are likely to be more tech savvy and open to digital. Similarly, younger population areas will be too.
We will continue to see print circulars declining in use as more consumers turn to digital access. As more and more consumers become comfortable with mobile devices as the main tool for research and purchasing, this number will decline further.
I don’t think moving exclusively to digital is right — yet. There is something about reading the Sunday paper and going through relevant circulars that I used to really enjoy when I was in my peak buying years.
Perhaps they should modify them to ALWAYS have some kind of coupon on them. This remains a popular pastime.
As long as the breakeven on the print circular is positive, retailers will likely keep the presses rolling. However as more retailers launch digital retail media networks, the brand dollars do need to come from somewhere…
There is no doubt that traditional print coupon redemption has been declining every year for many years, but there still is a place for print. It may not be in the form of “circulars,” but more like small story lines that capture attention in unique bits and bites with coupons creatively interspersed.
It pains me to say, as part of the older demographic, that I already miss print circulars. But I’m adapting to digital, so I’m still reading my Kroger, Publix, and Lidl ads online. That said, don’t get caught up in the personalization claim. Grocery might be able to do some personalization, but consider the miniscule number of people who buy enough products in drug or home goods or sporting goods to make up a good personalized ad. That is a future dream and an unlikely one to come to fruition.
Back in the ’70s, free-standing inserts (FSIs) were a huge marketing tool. Coupon redemption was over 5 percent, 6 percent, 7 percent. Today, that redemption rate is less than 1 percent. Much of the answer is in those numbers.
For the retailer, the transformation is significant as mobile coupons can be customized to specific customers and is a better marketing tool in so many ways. And they can still get the bounty from the manufacturers for participation.
The retailers move to the most efficient tool and should not be concerned about the older demographic converting. We are becoming more digital savvy, if slowly. And our numbers are less every day.
Yes, I think we will see the number of pages in these flyers decline until one day months after the last flyer was printed we will realize that it’s been “none” for some time and we are not terribly sure when it stopped. Save that last flyer to sit on your shelf next to that rotary dial phone. Its time has passed.
The transitions between now and next usually drag on longer than expected and print is no exception. Rather than taking print completely off the menu, some retailers and brands would be wise to monitor and ride out the transition. No doubt many retailers are anxious to put the pedal to the metal on digital as they build out in-house ad shops and digital media networks. However, retailers’ zeal for digital doesn’t necessarily create urgency on the part of shoppers.
It’s important to note that the weekly circular isn’t going away — it’s the physical printing of the circular that is declining.
For grocery retailers, the print circular is like the tip of an iceberg. Behind the circular is a massive promotional infrastructure that involves marketing, category management, distribution, and the ad department as well as their CPG partners that are the funding source not only for the discounts, but also to help cover printing costs.
The underlying processes to generate promotional offers have not gone away, retailers are just discovering more effective and efficient ways of communicating those offers. Digital communication and the incredible power of personalization and offer curation is where smart retailers are investing their savings from reducing print.
Retailers have cut back for years on the traditional Sunday insert, or the midweek circulars for grocery stores. (Just look at last Black Friday compared to 10 years ago.) It’s a chicken-and-egg proposition: Are they pulling back because of declining print circulation, or is circulation declining because of less news and promotional content?
Case in point: Gannett publishes the Milwaukee Journal Sentinel and several other dailies in Wisconsin. The company is shutting down its printing plant in Milwaukee and centralizing its print operations in Peoria, Illinois — a four-hour drive and further to Green Bay. I have subscribed to print and digital versions for years, but Gannett is driving a stake through the heart of its print product if news deadlines are moved up by hours. No wonder retailers are pulling back!
There is no doubt the future is digital circulars. Digital circulars have enjoyed a meteoric growth in the past few years. At the same time paper circulars continue to decline in usage.
Older Americans are still heavy users of paper circulars. When queried, they indicate that they primarily use the circulars to find deals as well as for comparison shopping. Another use is the development of the weekly shopping list while enjoying their coffee and Sunday paper with its many circulars.
Digital circulars can easily address the shopping list issue. In addition, digital circulars would appear to have the ability to not only present deals and feature pricing, but also compare these prices to competing retailers.
In food retail the print circular serves to not only collect funds from CPGs, but also creates awareness and reminders of a store location, deals, and savings. For independents, it even serves as a platform to highlight differentiated or made in store house brands.
The print circular in junk mail may not be efficient spend, and arguably questionable for ROI, grocers need a solid plan and transition to good customer friendly digital tools for better engagement and use.
In the meantime, any food retailer can test print circular effectiveness by stopping distribution for weeks or more to watch sales and customer counts. If nothing changes (for the worse), it can just remain an occasional tool to announce a big sale, or a store opening.
We’ll see less and less demand for circulars. It wasn’t long ago that retailers operated around their print circulars. It wasn’t just a communication tool but an internal planning tool for retailers like Talbots or Sears.
The circular has shifted in part due to direct mail and digital, but in many cases as in the BB&B case, many customers depend on them for seasonal deals and engagement with the retailer. Despite the higher expense, slimmed down versions of these will not be completely eradicated all at once. Smart retailers will prune and pick out how to transition customers to their digital versions.
The transition may include QR codes linking to a special deal online or category pages. But in the end, the transition will continue to a trek towards digital- including planning around the digital version of the retailers catalog.
Not going to lie. The Lands’ End, L.L.Bean, Northern Tool and Crutchfield catalogs all inspire purchases in our house. In part because they cut through the digital clutter. Not saying they should continue, because the environmental impact isn’t great, but retailers are going to need to do something more innovative than email. And if it’s an app, it need to provide an experience that wows enough to prompt downloads and word of mouth recommendations. They need to do something different.
Agreed, Nicola. Those are well written and designed, to where you can’t help but open and browse. Another good one for car care buffs is called Griots Garage. Like the others, they create curiosity, show a slice of how or why something was made to boost engagement and make long-term fans.
It’s hard to talk about print circulars without talking about newspaper circulation, which has pretty much disappeared. Even in narrow demographics like “older adults,” the numbers are only a fraction of what they once were.
But it doesn’t necessarily follow that their replacements — U.S. Mailings or various digital versions — will actually replace them; someone who thinks customization will keep a digital circular from being consigned to the (virtual) circular file is kidding themselves.
Retailers will all discontinue print circulars. It will all be good and well for months or years. Then someone at some retailer that is underperforming will get the bright idea to get an edge on competition and re start the print circular again to get attention. Then the other retailers in the usual reactive manner will follow and restart their circulars again.
I think a single page front and back sale flyer that is more of a print on demand set up is better. 32 page circulars are clumsy and difficult to go through. Also so many customers are so good at finding that vague circular item that is out of stock.