Retailers can build a more distinctive proposition for shoppers through creative and disciplined marketing, noted Kim Feil, CMO, Walgreens during her presentation at the Nielsen Consumer 360 event in Florida.

Feil noted that while the Sunday circular has been the vehicle of choice for most retailers, it is limited in its ability to shape brand perceptions effectively in a differentiated manner.

When Walgreens began its journey to reshape its brand perception and resonate with consumers despite a difficult economic scenario, it crafted a comprehensive marketing program with all the elements of a contemporary marketing mix.

Feil described the process at Walgreens when she took charge of the marketing function and worked towards a more broad-based approach for communicating the Walgreens’ brand as well as its offerings.

It began by understanding the brand’s lineage and long history of innovation, which shaped a well-recognized brand. However, consumers saw the brand as old, convenient, cluttered and a standard, undifferentiated store. Consumers did not recognize Walgreens as a comprehensive health services provider, despite the fact that they employ the second largest healthcare team after the government.

Walgreens embarked on a journey to rebuild the brand. By segmenting consumers carefully, they realized that while shoppers wanted to be helped, they also needed to make their own informed choices. This realization reconfigured Walgreen’s positioning to become the first choice for health and daily living that helped consumers live well, stay well, and get well.

To execute on this positioning, Walgreens broadened the set of ‘touch points’ to reach out to consumers using a variety of media that included television, mobile and online amongst others. For instance, the Walgreens’ online team converted shoppers’ online experience to echo the brand’s proposition by offering information and advice as well as integrating more social media. This created the real-time ability to conduct a dialogue that helped the retailer offer promotions that resonated with consumers.

The strategy yielded positive, tangible business results in 2009 and 2010 when Walgreens applied its new marketing mix during the flu season. By taking the same core principles and what Feil described as ‘connection points’ with consumers to other areas such as consultations, health services, outdoor, mobile and online Walgreens was able to increase awareness, consideration for their offerings and reinforce the brand’s new positioning.

Similarly, in the mobile arena, the Walgreen’s mobile application became one of the top 10 downloaded apps during the weeks that it was advertised.

As a result of these actions and their positive outcomes for both sales and profitability, Walgreens has demonstrated that by applying the right marketing mix models and metrics to brand building, retailers too can be successful advertisers.

At the same time, technology is having a measurable impact on retail sales.  In a recent U.S. study, Nielsen measured more than 200 digital ad campaigns and found the following:

• Average of 32% sales increase
• $1.1 million hike in short-term incremental sales
• 157% return on investment
• 18% boost in penetration
• 14% surge in buying rate

In addition to online ads, retailers are using scanning technology to enable consumers to check-out faster, create and retrieve shopping lists and even find and print recipes.  Read more about how technology is transforming both the retail environment and consumer shopping experience in the new edition of Consumer Insight.

Writing in the November issue of Nielsen’s “Consumer Insight” online newsletter, Todd Hale, Senior Vice President, Consumer & Shopper Insights, Nielsen, highlights one notable exception to this trend: at-home gourmands, who not only shop more frequently than the average household, but also spend more at club, grocery, drug, and dollar stores.

According to Nielsen, one-third of U.S. households consume a gourmet meal frequently or occasionally, with 83% of those meals eaten in restaurants, 37% at home, and 22% at the homes of friends or relatives.

These food connoisseurs shop specialty kitchen stores (16%), use professional cookware and subscribe to a cooking or gourmet magazine (15%), own professional grade appliances (11%), and patronize gourmet stores (10%), Hale notes.

Each year, these households log five more shopping trips across all retail outlets than non-gourmet households, outspending non-gourmet households by 11%.  

Foodie households also spend 20% more at club stores, 17% more at grocery, 15% more at drug, and 11% more at dollar stores than all other households.  They are not, however, big spenders at mass merchandisers, where they under-spend the average household by 11%, or at mass supercenters, where they spend 5% less.

Food is not the only palate-pleasing provision favored by gourmets, according to Hale.  They spend 66% more than other households at liquor stores and 66% more on alcoholic beverages.  Gourmet cook households also spend 16% more than other households at hardware/home improvement outlets, 15% more online and at office supply stores, and 13% more at electronics stores.

Not surprisingly, foodies are not big fans of highly prepared frozen foods.  Instead, they prefer fresh produce, spending 31% more than other households on fresh fruits and vegetables, Hale notes.  These amateur food aficionados also spend 105% more than non-gourmet cook households on wine, 51% more on liquor, 46% more on spices, seasonings and extracts, 41% more on shortening and oils, 40% more on snacks, spreads, dairy dips, gift cards and party needs, 34% more on butter and margarine, and 31% more on fresh produce.

Despite the currently constrained financial conditions, gourmet-cook households refuse to sacrifice quality, choosing instead to economize by buying larger size packages (27% more likely than other U.S. households) and clipping coupons (13% more likely).

To reduce expenses in these belt-tightening times, gourmet cooks also shop at club stores (31% more likely than other households), buy online (26% more likely), and take public transportation (49% more likely).

What’s the best way to attract consumers from these big spending gourmet households? 

-Stock locally sourced foods that optimize freshness and taste.
-Maintain a carefully balanced assortment of products.
-Incorporate multimedia and online marketing tools that highlight the sensory appeals of gourmet products: color, movement, and sound.

Read the full article.

View the latest issue of “Consumer Insight.”