Independent grocers need to make dramatic upgrades in marketing tech
Marketing technology, such as promotion optimization and personalization, has long been a nice-to-have for independent supermarket operators instead of a must-have, like product, operational and sales systems. These marketing systems are expensive and take dedicated teams to implement and run, and even most 50-store operators don’t have the resources required to make the effort deliver a positive ROI.
This is changing very rapidly as community-based retailers face ever more sophisticated challenges from larger competitors and online adversaries, but also as the costs of these systems has come down drastically.
Presenter after presenter at the National Grocers Association Annual Convention in San Diego this week read attendees the riot act, warning the gathered independent supermarket operators of what many consider an existential threat for the sector.
Good examples of marketing technology being applied at nearly the same levels as big chains can be seen at Coburn’s and Harmon City, two mid-sized operators in the Upper Midwest and Greater Utah, respectively. Both retailers have loyalty programs running with either owned or affiliated fuel stations that enable them to create personalized promotions for their best customers.
Coburn’s, for instance, has more than 600,000 loyalty members that represent 20 percent of shoppers and account for more than half of all sales. Emily Coborn, vice president of Operations East at Coborn’s, stressed that this makes it critically important to target this segment with valuable marketing outreach.
Ron Bonacci, vice president of marketing and advertising at Weis Markets, explained that success with marketing technology efforts is based on the collection and analysis of data. “Now it’s so cost effective that there’s no reason not to be collecting and analyzing it for retailers of any size,” he said. “AI tools support both your back-of-store decisions to have the right products on the shelf, without the hurtful shrink and the ability to use shopper data to keep them coming into the store and going to the website.”
Mr. Bonacci also suggested that basic digital engagement campaigns, including social media and digital promotion through text and email, can be up and running in weeks rather than months.
DISCUSSION QUESTIONS: What marketing technology solutions are most critical for independent supermarket operators to deploy in 2020?