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08/10/2020

The Future of Features?

Shifts in shopper behavior have retailers rethinking circular strategies

Since long before the term “shopper marketing” was even coined, feature ads in weekly circulars have been among the most basic – and often most effective – go-to tactics for brands looking to drive incremental sales through retailer partners.

But as retailers revamped their promotional activities this spring in response to the abrupt changes in shopper behavior caused by the COVID-19 pandemic, many scaled back or even stopped printing their weekly circulars.

Meijer, for one, suspended its weekly print flyer on Easter Sunday (April 12) after first cutting back its folio size to just four pages one week earlier. Meanwhile, H-E-B and Ahold Delhaize’s Stop & Shop were among other chains that dramatically scaled back folio sizes to a handful of pages from early April through late May. ShopRite turned its tab into a two-sided broadsheet for several weeks, devoting a good portion of even that limited space to messages of support and reassurance rather than deals (see image at right).

The reasons were multiple but included the need to reduce store traffic during early-stage panic buying for essential products and help avoid the resulting potential for out-of-stocks on promoted items. (On a less-philanthropic note, some retailers found little need to tout promotional prices during a period of pandemic-driven stock-up buying.)

While most retailers had shifted back to more traditional activity by early June, Walgreens actually continued print distribution of its circular through the end of May – but then halted production in June. “In light of the accelerated consumer behavior shifts driven by COVID-19, the weekly circular will transition exclusively to digital as we temporarily suspend the printed version as we look to enable more agile ways to meet customer needs,” the retailer said in a statement to the Institute.

In publicizing the move, Walgreens encouraged consumers to use the digital version of the weekly tab and also register for its Balance Rewards loyalty program if they hadn’t already done so.

These recent actions have led some industry experts to speculate that the stronger shift toward online grocery shopping in the last few months might finally make the traditional circular obsolete as retailers focus on less-expensive digital marketing alternatives that can facilitate more direct and more personalized communication with shoppers.

This, of course, is a possibility that has long been in the works: Back in 2013, Safeway’s then-CEO Steve Burd said the supermarket operator (now owned by Albertsons) was trying “to actually get out of the paper ads, and make the ad itself personalized for every household.” Needless to say, Safeway still produces a mass-distributed weekly print edition.

Why? Print circulars are still effective at driving sales: Studies conducted as recently as January 2018 found 80% of U.S. households still using them to plan shopping trips. They also provide a significant source of incremental revenue to some retailers through the pay-to-play promotional dollars they generate.

That powerful combination suggests that the print circular won’t be disappearing overnight – pandemic or not.

Understanding Today’s Shopper to Drive Tomorrow’s Success

The coronavirus pandemic has dramatically altered the retail landscape in numerous ways that continue to challenge brand marketers struggling to deal with the present and plan for the future. The Institute’s Path to Purchase Now webinar series addresses some of the critical ways brands and retailers must rethink existing strategies to meet changing shopper behavior.

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