Forecast for 1985: no truce ahead in the battle for business.
Progressive Grocer's Merchandising Advisory Council, a top-flight panel of executives representing more than 90 chains and independent companies, unanimously feels that there will be no lessening in the intensity of merchandising programs as companies press on for "real" sales growth. Eighty-four percent of the Council members said in a recent survey that their efforts in 1985 are going to be as vigorous as ever.
Price remains the primary weapon with strong emphasis expected for cut-price features and across-the-board discounting. But while double-value redemption of manufacturer coupons remains a favorite customer attractor with the majority of penelists, there are some doubters. A third say they'll be featuring them less often this year. Interest is also dropping in games, sweepstakes and trading stamps, but growing in continuity programs, which show the biggest gain in popularity among the traffic-building devices.
Yet the Council members feel their efforts are not bringing the results they wish. After all, despite the continued barrage of efforts to attract shoppers, it appears that the good old days of the true-blue, loyal customer are fast disappearing. Almost two-thirds of Council members say they perceive a continuing decline in customer attachment to any one store or company.
"I think that there's far too much emphasis placed on price and not enough on quality of products and store service given the customers," suggests one panelist as reasons for this trend. Council members apparently agree and plan to do something about it. Nearly 80% say that they will be increasing emphasis on special customer services in 1985.
Some Council members blame the reduction of consumer loyalty on the lack of excitement in supermarket merchandising and on carbon copy promotional efforts. "It takes more than price to bring customers back. They like to come in where it's fun to shop," comments one Council member. To help add to store personality and to make in-aisle activity livelier, most members of the council say they will be scheduling more special selling events, storewide theme sales, and parking lot promotions. There'll also be more emphasis on mass displays, related-item merchandising and product samplings to take full advantage of the resulting increase in store traffic.
This acceleration of merchandising activity couldn't come at a more opportune time because consumer buying attitudes are changing for the better, according to Council members. They report that consumers are, for the first time in several years, beginning to trade up and are displaying an increased loyalty and interest in national brands. While this shift in label preferences and higher quality opens up selling opportunities in all departments, it is anything but helpful for the status of generics. Only 7% of the panelists say they have plans to increase merchandising emphasis on plain label products.
To make the most of these perceived merchandising opportunities, retailers are looking to manufacturers for ideas, themes and POP materials. They are asking their manufacturers for more selling ideas and promotions to give their stores some pizzazz, greater flexibility in planning joint merchandising efforts, helpful advice about in-store positioning of products and an increased number of direct contacts with manufacturer representatives.
But Council members report that they're not being inundated by manufacturer contributions to the selling effort. The panelists say that only about half of the total materials used by their stores come from suppliers and they say the amount offered has diminished in the past two years. However, they also think the quality and usefulness of POP materials have improved.
When it comes to the hows, whens and wheres of using these materials at store level, managers have more say than ever before as their merchandising decision-making powers continue to grow. Only in the area of shelf-space allocation is there a reluctance by headquarters to relinquish its authority.
Overall, the members of the Merchandising Council tend to view the upcoming year with optimism, and although they expect no drop in competitive pressures, most see opportunities for "real" sales and profit growth. To accomplish this, there's a common awareness for the continued need to merchandise "smarter" and to answer the customers' needs better. They have recognized important changes that an improved economy has produced in consumer buying attitudes and are planning merchandising tactics that reflect those trends.