Database Marketing Drives Better Retail Flyer Results
Whether national chain or regional, retail is a local business. Each store has its own unique trading area: a combination of its own set of consumers, competitors, local economy and environment. Return on marketing investment can be improved dramatically by fine tuning the marketing mix to fit the store profile. And one of the most important elements of the marketing mix is the flyer.
Kubas Consultants reported that flyers were rated by consumers as the best source for both local shopping and product information – ahead of sources such as newspapers and the internet. With large amounts of data from transactions, loyalty cards and credit cards, and increasing sophistication in database marketing, retailers can improve consumer targeting. Advances in printing technology can also enable cost effective versioning, but proper flyer analysis is paramount in taking advantage of these advances.
Many retailers know the advantages of flyers. Effective flyers can build traffic by attracting new customers with shopping baskets that are entirely incremental to the retailer. A flyer can also encourage regular shoppers to increase their baskets with items they would not ordinarily purchase from the retailer, thus generating incremental revenue.
The key is analyzing and understanding the results your flyers generate. Many retailers issue one flyer every week. For these retailers, analysis will revolve around how one flyer performed versus flyers from other weeks and provide the marketer with large amounts of information on what worked well and what did not. Retailers that issue occasional flyers can analyze their flyer performance against ‘non-flyer’ weeks, providing them with better information on the overall benefits of running a flyer in building business profitably. They will, however, have much less information on what works well in their flyers.
A solid flyer analysis program will help guide the decisions merchandisers and marketers need to make when planning their flyer program and can help answer critical questions such as:
Which products should be promoted – including what to feature on the cover and the combination of products to promote?
Rank products by the key metrics of building traffic, basket size and customer take-up. Calculate product associations. For example some products have a strong affinity, such as candlesticks and candles. Promote only one – it will create lift for the other. Analysis will also show the combination of products that will appeal to the largest number of customers and maximize traffic building. For example, an electronics flyer could have three products on the cover – one targeted to men, one to women and the third product to family use.
Should you partner with vendors to promote their brands or concentrate on house brands?
Working with vendors can bring in additional revenues and profits, but house brands can create long term loyalty to your store. Analysis can estimate the comparative benefits and help in designing a good mix.
At what price point should the product be promoted?
Analysis of promotions of a product at different price points can determine the level of discount required to achieve sales objectives.
What should our creative look and messaging be?
Especially for retailers that issue flyers weekly, experimental testing and analysis of messaging and creative can provide the information to refine design and copy. Care must be taken to design the tests to enable effective analysis. In database marketing, this usually means choosing the most important things to test first, and only testing one thing at a time. Remember that flyers are an integral part of the overall communication to consumers – they need to have the same look and feel as the other forms of communication. The learnings from your flyer analysis should be viewed in the context of the total communications program.
How many pages should our flyer be, and how should we allocate space? And to what extent should we ‘version’ our flyer by location and customer segment?
Again, these questions can be answered by careful testing and analysis. That includes page by page analysis that can tell you which pages are best for optimal performance. Demographic / geographic analysis can assist in versioning your flyer. Product content, pricing and even size of print can be varied to suit local area.
Individual flyer metrics rarely tell the whole story and must be examined in combination with each other. For example, if a retailer promoted a product with a large sticker price, for example a European vacuum, and was purchased by customers with very large basket sizes (excluding the promoted product), one might conclude that the promoted product fit well with this customer segment and was successful. However, if the actual number of customers buying the vacuum is small, then revenues have likely fallen far short of expectations and the expected increase in store traffic in response to the flyer-promoted product has not materialized. In this example, the flyer space allocated for the vacuum was unwisely used.
Accepted practice is for a standard weekly flyer report to be issued, but do not stop there. Merchandisers need access to product profiles that include key metrics taken both inside and outside of promotional periods. This information can be used by merchandisers for not only flyer planning, but also to assess new products, pricing and other assortment planning decisions. Finally, there is always a role for projects and ad hoc reports to satisfy the questions of individual merchandisers. Projects focusing on one category can often be extended into other categories and ultimately lead to improved overall reporting.
One word of caution – as we all know, not all flyer impacts are positive. Cannibalization, brand substitution, cherry picking and pantry loading can diminish the traffic building benefits of flyers. A complete flyer analysis includes an estimation of these effects. Proper analysis will identify those products least affected by these factors while creating the traffic building effect you want.
Transcontinental can provide the expertise you need to maximize the ROI of your flyers and other marketing communications. Call Dan Mariani, General Manager, toll free at 1-877-585-2900 (416-585-2900 in the Toronto area) or visit us at www.transcontinental-dbm.com.
