Moving circulars into the digital age
One of the most enduring forms of retail marketing is the print circular. Consumers make a ritual of checking them for specials before making their shopping lists. I've even known some people who subscribed to the Sunday paper just so they could get the circulars (of course those people have asked not to be named in this article).
As for retailers, we all know that print circulars work. They're proven to drive in-store traffic by promoting local deals, because smart marketers have perfected the science behind them. Recent research by Nielsen found that 60% of shoppers look at a paper circular at least once a week. With the holidays just around the corner, it should come as no surprise that this subject is starting to gain some attention.
New technologies and devices are organically forcing retailers to re-think their digital strategies. As consumer consumption patterns begin to shift with the emergence of new technology and devices, so must advertising and marketing to consumers.
Though the Nielsen study found that audiences for digital circulars are currently relatively small, conversion rates are strong and the demand for digital is growing. When asked about what they want in the future, 70% of shoppers said they will want to use email and traditional websites while one-third want social and mobile applications. And that can be a good thing – shoppers who visit a store's website were found to spend 30% more in the store.
Digital circulars are no longer an option – they're a necessity. While PointRoll has been launching digital circular solutions for more than 10 years, companies ranging from Google to The Associated Press are beginning to recognize their value as well. Retailers seeking to drive in-store and online traffic should consider them as an important solution in their marketing mix, but must bear in mind that it's not as easy as simply putting their print circulars online. Below are tips that retailers should consider as they plan their digital circular strategies.
Don't wait for your consumer to come to you
Print is considered a “push format” because you push it to your consumers by delivering it directly to their doorstep. Email, on the other hand, is a “pull format” because consumers have to subscribe to your email list, thus pulling the circular to them.
Nielsen's research considers all digital a pull format, which shows that the market still needs to expand its view of digital circulars. Conventional thinking is that print ads get shoppers to the door by “pushing” it out to new customers while digital ads are ideal for loyal customers who “pull” the ad to them by subscribing to an email newsletter or seeking out a retailer's website. But in reality, digital circulars can and should be used across both push and pull channels to find new audiences and engage existing ones.
Here's an example. RadioShack Corp. recently launched the RadioShack Weekly Ad in Facebook. The new weekly ad allows RadioShack to push localized deals and ads to consumers where they interact and spend time online, and pull the weekly ads when they're ready to view them on Facebook, purchase a product or simply browse the circular.
Digital doesn't have to be something that a consumer has to find. The message can be pushed in a much more targeted way. Online advertising affords retailers the reach to grow audiences, the scalability to run one campaign across multiple local markets and the frequency to engage audiences on a more regular basis than print. To do that, they need to think about circulars as part of a multifaceted digital marketing campaign and as a complement to traditional print circulars, which brings me to the next point.
One message, many distribution points
When retailers try to approach digital circulars just like they do print (i.e. post the print circular online), they miss huge opportunities to expand their audience and connect with consumers.
Digital gives us the opportunity to use demographic, geographic and behavioral data to identify new consumers, so you're not limited to just the local newspaper subscribers or loyalty card holders. And the interactive nature of digital distribution across many channels and consumer touchpoints – online, smartphones, tablets and out of home – allow for highly localized, engaging ads that consumers may interact with, customize and remember.
One retailer that operates several supercenters and grocery stores throughout the U.S. created a groundbreaking multichannel digital display advertising campaign that localizes offers across online display ads, mobile and digital out-of-home billboards. This means that retailers can distribute their offers through one central campaign and consumers interact with the offers in different ways based on the medium. For instance, a digital billboard can display specials at the nearest location, ads on mobile phones can offer a map and directions to the nearest store or click-to-call and online circulars can offer shopping lists and customized specials. All while maintaining a consistent message across every consumer touchpoint.
The single biggest hurdle to retailer adoption of digital circulars today is lack of data. While print is tried and true, digital is arguably still in its infancy, so its effectiveness hasn't been studied and documented to the same extent. Digital affords us options for much more precise measurement, but it is also harder to demonstrate the connection between circular distribution and in-store traffic. Until we have more data on digital, print will still be considered the safe bet.
Some retailers are beginning to make progress in measurement of digital circulars. For example, Kat Kozitza, director of interactive and direct marketing at Supervalu, a grocery retailer, recently spoke at PointRoll's ShopLocal Summit about the results of an online display ad campaign that featured localized circular pricing and product information that was relevant to each store location at the moment the ad was shown.
The study found that the expandable ads (which expand when an action is taken, such as the consumer rolling over it) drove three times the sales lift compared with standard online ads, even though the average frequency on the standard ads was 75% higher. The average cost of the ads was the same for both the standard non-expanding and expandable ads. Supervalu was also able to gain insight into specific household segments, finding that one particular segment accounted for only 31% of impressions yet drove 69% of incremental sales. These types of findings will help retailers learn what works and allow them to optimize their digital campaigns in real time.
The opportunity behind digital is enormous but we still need to prove it. In order to prove it, more retailers need to conduct digital circular measurement studies. There are a few ways to do this. First, they could conduct their own match market test, in which they run digital circulars in one market and not another to compare sales in those markets. Second, they could contract with third-party providers to manage a more in-depth study. And finally, they can partner with digital media providers that integrate measurement into the media buy so they get reports on what's working and what isn't.
With digital circulars, retailers are able to grow their audiences, create customized, interactive local offers across multiple channels and consumer touchpoints and measure so specifically that they'll know precisely what drives in-store sales and be able to optimize accordingly on the fly. There's no question that digital will become the go-to channel for circulars and local offers, and smart retailers are leading the way now to integrate it into their marketing mix.