HP's growing DM footprint leads to retailer savings

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Spanish grocery store chain Caprabo reduced the production time of creating in-store promotions from 30 to 15 days, since adopting Hewlett-Packard's Retail Marketing Automation (RMA) service 18 months ago.

The program was designed specifically for the marketing departments of large retailers such as grocery chains, hypermarkets, do-it-yourself retailers and mass merchandisers. Caprabo is one of two major European retailers using the system.

"[RMA] is an outgrowth of our strategy to build vertical solutions," says Russ Stanziale, industry director at HP.

Marketing automation for US stores

HP introduced its RMA service to US business customers last month. The product could change the production of circulars, in-store collateral and direct mail. It automates retailers' ability to produce marketing materials across multiple stores, languages, formats and price zones. HP expects it will improve efficiency, increase sales and reduce costs.

A typical US grocery chain produces two circulars in one week and has 10 price zones per city, Stanziale says.

"Knowing how to produce marketing materials efficiently is not the core competency of a retailer," Stanziale says.

With RMA, however, all of a retailer's digital assets are stored together with all the relevant data needed to produce each promotional piece. As a result, branding is controlled centrally while local stores have the ability to produce materials to support local events or respond to local competitive pressures.

Typically, retailers have multiple systems in place to support all the departments involved in producing these materials, Stanziale says. With RMA, however, "some retailers have eliminated 11 systems across various departments," he says.

HP assesses a retailer's marketing printing environment to determine the most efficient configuration of printers.

"This is going to bring our retailer partners the capabilities associated with our digital presses that they may be unfamiliar with today so that they can do mass customization at an affordable price," Stanziale says. He adds that a lot of retailers still aren't familiar with high-speed variable data printing.

More retail innovations

Another HP initiative targeted at retailers is in more of a developmental stage. The Retail Store Assistant is an in-store kiosk that is linked to a retailer's IT system so that it contains inventory, sales and customer purchase information. By swiping a customer loyalty card or typing in a telephone number, customers can receive a printout that includes a personalized shopping list, relevant coupons, notice of associated store discounts or sales and a map of where to find selected items.

With its new Marketing Resources software, HP is trying to help small and midsize businesses be more efficient at producing marketing materials. The free software tool provides a centralized desktop icon through which users can access a variety of tools and resources that HP makes available to SMBs on its Color Printing Center. In addition, the new tool enables users to instantly analyze the cost advantages of printing in-house versus outsourcing for specific jobs. Users can also view the actual output of marketing collateral before printing.

Expanding its offerings

The Palo Alto, CA-based technology company has been introducing new software, hardware and services to meet the growing needs of multichannel retailers over the past couple of years.

"Retail is an area of IT that has been kind of slow in the past several years, so it would make sense that it would be a more lucrative growth opportunity," says Wendy Abramowitz, an analyst at Argus Research.

In fiscal year 2006, the Personal Systems Group accounted for 32 percent of HP's overall revenue; the Imaging and Printing Group held 29 percent; Enterprise Storage and Servers held 19 percent; HP Services held 17 percent; HP Financial Services held 2 percent and software and other held 1 percent.

"[HP] is evolving along different dimensions, adding more capabilities and functionality," Stanziale says.

New role caught on video

One of the other areas that HP is targeting for growth is the home video market, which it estimates generates $30 billion in sales annually. In February, HP introduced Video Merchant Services, which provides retailers the technology for online video Web stores as well as content-fulfillment services.

Wal-Mart, Bentonville, AR, was its first customer, introducing a beta version of a video store where customers can choose from more than 4,500 movie and TV titles with the option of downloading the digital versions to a PC or portable video player in addition to purchasing a DVD for mail delivery.

"This marks a significant step for Wal-Mart in home video entertainment and enables us to present more choices to our customers, " says Amy Colella, senior manager of corporate communications at Walmart.com.

In June, Trans World Entertainment Company, Albany, NY, became the first retailer to sign up for HP's DVD manufactured on-demand service. It offers titles that have never before been released on DVD. Trans World operates the entertainment software retail brands Coconuts Music and Movies, Sam Goody and F.Y.E.

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