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How Retailers Promote Pet Food & Pet Care

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How Retailers Promote Pet Food & Pet Care The Changing Landscape of Retail & Consumer Promotions Tom Pirovano March 15, 2011 1 Welcome! 2 Topics Covered • What’s What – The State of Retail Promotions Today • What’s New and What’s Next – Game-Changing Trends & Technology – Future Retailing & Promotion Opportunities 3 The State of Retail Promotions Today 4 Major Supermarkets Running More Ad Circulars in 2010 2009 2010 Count Retailer Circulars Circulars Change Safeway (Multiple Banners) 59 87 +28 Carr’s, Dominick’s, Genuardi’s, Randall’s, Tom Thumb, Vons, Pavilions Jewel-Osco 87 102 +15 King Soopers / City Market 52 64 +12 Publix 51 58 +7 Quality Food Centers 48 54 +6 Fresh & Easy 45 51 +6 Save-A-Lot 20 26 +6 Source: ECRM-MarketGate Ad Comparisons, Calendar 2010 5 Other Major Retailers Running Outside the Traditional More Ad Circulars in 2010 Grocery Channel 2009 2010 Count Retailer Circulars Circulars Change JC Penney 54 82 +28 Sears 47 70 +23 Family Dollar 25 44 +19 Home Depot 42 59 +17 Dollar General 18 30 +12 OfficeMax 34 39 +5 Walgreens 57 60 +3 Walmart-US 38 41 +3 Toys - R - Us 39 42 +3 Target Stores 52 54 +2 Source: ECRM-MarketGate Ad Comparisons, Calendar 2010 6 Very Few CPG Retailers Are Running Fewer Ad Circulars 2009 2010 Chg In Retailer Circulars Circulars Circulars Sentry Foods 52 49 -3 Kmart 66 64 -2 Copps 52 50 -2 Farm Fresh 52 50 -2 Big Lots 33 31 -2 Source: ECRM-MarketGate Ad Comparisons, Calendar 2010 7 Squeezing More Ads into Fewer Circulars 2010 Chg In Chg In Retailer Circulars Circulars Ad Blocks Sentry Foods 49 -3 +4,845 Kmart 64 -2 -567 Copps 50 -2 +3,217 Farm Fresh 50 -2 +2,896 Big Lots 31 -2 +253 Source: ECRM-MarketGate Ad Comparisons, Calendar 2010 8 Most leading retailers ran more ad blocks in 2010 than in 2009 Increased 2010 Ad Blocks Vs. 2009 • Kroger • Safeway Decreased 2010 Ad Blocks • Albertson’s (Supervalu) • A&P • Loblaw’s (Canada) • Wegman’s • Publix • Meijer • Stop & Shop • Kmart • Food Lion • Sears • H.E.B. • Shopko • Walgreen Company • CVS Shouldn’t we expect fewer print • Rite Aid ads as digital media grows? • Walmart-US • Target Stores Source: ECRM-MarketGate Ad Comparisons, Calendar 2010 9 Retailers with the Most Ad Blocks Per Circular Avg Ads Per Circular ShopRite 586 Meijer 396 Fred Meyer 371 Supermarkets Acme Markets 368 in Eastern Waldbaums 367 U.S. states A & P 365 tend to have many more Superfresh 363 feature ads Pathmark 358 per circular. Shoppers Drug Mart 357 Weis Markets 339 Source: ECRM-MarketGate Ad Comparisons, 12 Months Ending 2/19/2011 10 Retailers with the Fewest Ad Blocks Per Circular Avg Ads Per Ciruclar Aldi 38 Ads with these Kerr Drug 54 retailers are less likely to be lost in Wegmans 77 the crowd. Fresh & Easy 85 Big Lots 87 Walmart-US 90 Duane Reade 92 Food 4 Less 101 Bloom 111 Price Chopper … 113 Source: ECRM-MarketGate Ad Comparisons, 12 Months Ending 2/19/2011 11 Retailers Promoting Private Label Private Label Share of Ad Blocks Aldi 66.4% Fresh & Easy 60.8% Wegmans 49.9% Hannaford Bros 27.6% H.E.B. 27.3% Aldi, Fresh & Easy, Giant Carlisle 26.9% and Wegman’s are Hy-Vee 26.7% the clear leaders in Food Basics 25.2% promoting their Loblaws (Canada) 25.1% private brands. Scott's Food & Pharm 24.8% Source: ECRM-MarketGate Ad Comparisons, 12 Months Ending 2/19/2011 12 Retailers Promoting Traditional Brands Private Label Share of Ad Blocks Big Lots 0.0% Marc Glassman 0.4% Bartell Drug 4.2% Lewis Drug 4.3% Price Chopper (KC) 6.1% Longs Drug (Hawaii) Traditional brands 6.2% Dierbergs may find less private 6.6% Shop 'n Save (St. Louis) label competition with 7.1% Walmart-US these retailers. 7.5% Albertsons LLC 7.8% Source: ECRM-MarketGate Ad Comparisons, 12 Months Ending 2/19/2011 13 Top Promoted Brands in 2010 Across All Categories Share of Retail Rank Brand Name Print Ads #1 Samsung 0.60% #2 LG 0.46% #3 Pantene 0.44% #4 Dove 0.42% #5 Coca Cola 0.42% #6 Pepsi 0.41% #7 Sony 0.34% #8 Neutrogena 0.34% #9 L'Oreal Paris 0.33% #10 Aveeno 0.30% Source: ECRM, Share of Ads (Brands Counts) for Calendar 2010 14 Top Promoted Brands in February Brand Share February January Calendar of February 2011 2011 2010 Brand Name 2011 Ads Rank Rank Rank Samsung 0.726% #1 #1 #1 Dove 0.580% #2 #2 #4 Coca Cola 0.526% #3 #5 #5 LG 0.501% #4 #39 #2 Pepsi 0.449% #5 #7 #6 Herbal Essences 0.385% #6 #27 #12 L'Oreal Paris 0.361% #7 #12 #9 Axe 0.344% #8 #149 #23 Fructis 0.338% #9 #14 #17 John Frieda 0.312% #10 #60 #40 Olay 0.303% #11 #74 #43 Revlon 0.299% #12 #10 #16 7up 0.289% #13 #20 #14 Nature Made 0.288% #14 #25 #21 Maytag 0.285% #15 #65 #38 Source: ECRM's MarketGate Ad Comparisons, U.S. and Canada, All Retail Channels 15 Ad Pricing By Region Target Front Page Ad, Week of March 13, 2011 16 Featured Products By Region CVS Front Page Ad, Week of March 13, 2011 17 Ad Exclusivity Sharing Ads Space with Competitors. Ads Running Week of March 13, 2011 18 As suppliers improve their ability to evaluate trade promotions, look for trade spending to be adjusted across retailers based on promo quality – regardless of ad media. 19 Game-Changing Trends & Technology 20 Where does the name “Roto Ad” come from? • Answer: The Rotogravure Printing Press 21 News: February 24th, 2011 “Shoprite is First Grocery Retailer On All Three Leading Mobile Spaces” First with… 1. iPhone (IOS) App 2. Android App 3. Mobile Web Site 22 Mobile strategies appear unbalanced across the top U.S retailers # Who “Like” iPhone Android Mobile Web Company Facebook Page App? App? Site? Walmart 3,500,000 Yes Sam's Only Yes Kroger 54,000 Yes Yes No Target 3,900,000 Yes Yes Yes Walgreens 823,000 Yes Yes Yes The Home Depot 228,000 Yes No No Costco 217,000 No No Yes CVS 263,000 Yes No Yes Lowe's 508,000 No No Yes Sears/Kmart N/A Yes Yes Yes Best Buy 2,500,000 Yes Yes Yes Safeway 145,000 No No Store Locator Only Observed as of 2/19/2011 23 How many shopping apps does a consumer need? 25 Authenticity is a new challenge in mobile marketing Each of these Android apps uses the Walmart name, and some look very authentic. But none of these is from Walmart. 26 Use of 2D barcodes continues to expand. Bed/Bath/Beyond 3/9/2011 Sears 3/13/2011 Costco FSI 3/9/2011 3/13/2011 27 Online Customer Reviews • How Are Shoppers Using This? • How Are Category Managers Using This? • How Are Product Managers Using This? 28 What You Need to Know About GROUPON • Combines collective buying with social media to offer local coupons via email • Valued at $6 Billion in February, 2011 • Launched November, 2008 Just one of several new • 50 million subscribers ways to promote online • 500 markets in 35 countries • Groupon’s Super Bowl Commercial – TV spot criticized by some, but helped to broaden awareness of this emerging marketing powerhouse 29 Will Shopkick be the next big thing? Shoppers are willing to let retailers track their locations in return for special offers. 30 Other Consumer Tools to Watch 31 New players are finding a role as consumer advocates Coupon Tools From JillCataldo.com February, 2011 Coupons.com SmartSource.com RedPlum.com CouponNetwork.com Cellfire.com Jill Cataldo, the “Super- ShortCuts.com PGeSaver.com Coupon Queen”, launched Hilander Softcoin Upromise.com a social media campaign Jewel-Osco Avenu Dominick's Just For U after finding 761 expired Meijer Mealbox Target items at a major Chicago Walgreens CVS/Pharmacy retailer. Wal-Mart All You Exclusives Current Inserts Coupon Lookup 32 Super Bowl TV Commercials 8 CPG Suppliers with 4 CPG Suppliers with 2010 Super Bowl Spots 2011 Super Bowl Spots • Anheuser-Busch • Anheuser-Busch • PepsiCo • PepsiCo • Coca-Cola • Coca Cola • Mars Candy • Mars Candy • MillerCoors Only 4 CPG Players in 2011? • Dr. Pepper/Snapple • Unilever Will Super Bowl TV commercials • Diamond Foods remain effective for CPG brands? 33 Alternative Strategy P&G’s Old Spice Campaign • Specifically focused on Old Spice Body Wash • Launched first on Old Spice Facebook Page • Loaded to YouTube on 2/4/2010 – BEFORE Super Bowl • Strong FSI Support • Expanded Campaign in July • Overshadowed Super Bowl Ad By Other Men’s Body Wash 34 What’s Next? 35 Evolving Revenue Streams for U.S. Food & Drug Retailers 1776 - 1970 2000 – 2010 • Margins on • Online Sales & Shipping Everyday Turns • Leasing Kiosks • Cell Phones/Electronics 1971 – 1999 • Gift Cards • Store Brands • Email Marketing • Slotting Fees • Circular Ads 2011 & Beyond • Displays • 2-D Barcodes • Diverters • Location-Based Ads • Download Sponsorship • Guaranteed Couponing • Car Charging? 36 Content Sponsorship Redbox is already developing CPG partnerships. 37 Retailers Owning Media Companies February, 2010: Walmart Buys Vudu Retailer Opportunities • Ad-Subsidized Downloads • Interactive Ads • Reward Downloads for Frequent Shoppers 38 •Pag Ad-Sponsored Book Downloads? Enjoy a Coke with your book. Media has a long history of ad sponsorship. Will ads lower the price of e-books? Could advertising lead to an increase in literacy? 39 Private Label Phone Service Walmart, Kroger, Meijer, and other retailers offer private label phone service. Retailer Opportunities • Text Ads • Surveys • Location-Based Ads • Pay By Phone • Minutes/Downloads for Frequent Shoppers 40 The Other App Stores: Chrome Apps & Mac Desktop Apps 41 Retailers May Be the Key to Tomorrow’s Infrastructure Charging Electric Cars at Whole Foods and McDonalds 42 In Summary… • Retailers are running more print ads.
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