Natural Foods Merchandiser

Marketing goes high-tech

A hot trend for retailers in 2008 is shopper marketing, or using traditional and digital marketing messages within a store.

A variety of media tools is already being deployed in large, conventional chains. The smartcart, for example, is a screen attached to the front of shopping carts that have already begun to weave through the Shop-Rite grocery aisles, narrowcasting (broadcasting to the in-store audiences) product advertisements, how-tos, recipes and even grocery lists sent earlier by the shopper. The cart scans each product as it goes into the basket and totals the cost of purchases before checkout. Another version of the tech-rigged cart allows consumers to place their cell phones over the reader to input and display shopper history and loyalty points.

Another system is Perfect Media from In-Store Broadcasting based in Salt Lake City. It includes 32-inch LCD screens at points along a store's perimeter, 20-inch LCD screens at check-out with more entertaining content (because shopping is complete), and eye-level LCD screens providing "roadblocks" of advertising information in the aisles. Currently, some Kroger, Safeway, Supervalu and Ahold stores are using this system. On a smaller scale, most often seen in natural-channel stores, is Healthnotes, a touch-screen, kiosk-based health and wellness program for nutrition advice, recipes and general food tips.

Before naturals retailers venture too far into the in-store media maze, they might want to consider the best use of the tools. Most marketers in this category want to provide an authentic experience and build relationships with consumers. They also need retailers to work with manufacturers to engage consumers and invite them to participate. The days of one-way communications—messages to motivate—seem to be waning. Instead of looking at the store as space to make claims, it may be better seen as having opportunities for interactions. For years, Whole Foods was cited as successful in creating its retailing experience. Which stores will provide the retailing exchange in the future?

There is little doubt most exchanges are being made on the Web via Web 2.0. The term is used by marketers to best describe the newer (not the newest—that would be Web 3.0) interactive Internet tools such as social-networking media, blogging, microblogging, wikis, tagging, cost-per-click, photo-upload services and video sites such as YouTube.

Consumers are turning to their social media and tagged blog posts for input. According to a TNS/Media Intelligence survey, "Forty percent of all social net-workers said they use social networking sites to learn more about brands or products they like." A recent Deloitte & Tou?che survey for the Grocery Manufacturer's Association, however, found that 70 percent of purchasing decisions are made in-store. Respondents also reported on the way they prefer to receive product information: 50.3 percent said from product packaging; 19.5 percent, in store (sales help, etc.); 9.82 percent, friends and family; 7.49 percent, online consumer-written reviews; 6.74 percent, company Web sites; and 6.13 percent, third-party Web sites. More than 20 percent specifically mentioned some version of the Web or online resources.

According to John Moore, past marketer for both Whole Foods and Starbucks and author of Tribal Knowledge (Kaplan Publishing, 2006): "We have seen kiosks, technology and signage end up as replacements for people … contributing to less-personal relationships. That is incongruent with authenticity. There should be a dialogue, not a monologue—talk and listen, listen and talk." Moore further suggests that naturals cooperatives have a great opportunity, as they already have a "clearly defined, loyal and vested community." Potential exists to deepen that relationship by adding further interaction in-store.

Microblogging sites such as Twitter and Jaiku encourage friends to stay connected with one- or two-sentence updates. Using social mapping sites such as Dodgeball, updates and alerts are keyed to users' locations. With this technology, co-op members might share up-to-the-moment sales or reviews of delicious deli dishes from their cell phones. Already, 42 percent of mobile Internet users post ratings or reviews of products, and 29 percent use Twitter, according to Forrester Research.

Tak Tang, information-technology manager at the Wedge Community Co-op in Minneapolis, says the co-op is well-positioned to take advantage of some of these opportunities as the internal IT team develops in-house software systems. "Remember, as a co-op, it is really the community telling us what to do."

Beyond traditional merchandising tools adapted to digital and mobile technol?ogy —such as advertising, nutrition advice, coupons and product information—naturals retailers should reconsider one of the reasons why consumers often trust their stores in the first place: ethically based offerings with authentic backstories. One organic-spice company exhibiting at a national trade show recently looped a video of the owner in daily life—shopping, cooking, living with passion—easily viewed on a 32-inch LCD screen. The video quality resembled that seen on most YouTube videos—a comfortable, not overly produced experience. According to Pew Internet & American Life, "Forty-eight percent of Internet users have been to video-sharing sites such as YouTube, and the daily traffic to such sites on a typical day has doubled in the past year." Developing true relationships depends on disclosure, not advertising blips.

One cooperative ahead of the LCD-screen idea is New Mexico-based La Montañita Co-Op Food Markets. According to Marketing Director Edite Cates: "We are using this high technology to tell our stories, particularly of our local producers. There is nothing better than the opportunity to connect people with where their food comes from." Each of the stores has two 17-inch screens—one in deli and one in produce—and uses "the smaller size for more intimacy," she says. Cates is able to visit farms and integrate fading digital images on a smart chip in her computer, updating the contents as needed.

Technological innovations are pressing through the doors of retail environments everywhere, and there is opportunity to build upon the branding that natural channels originated, using these tools to reinforce authenticity and ethical purchases. R U ^ 2 It? Twitter that!

Cynthia Barstow is an adjunct professor of food and natural products marketing at the University of Massachusetts, and president of the consulting firm Seed to Shelf: Marketing for Sustainability.

Natural Foods Merchandiser volume XXIX/number 3/p. 74,76

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