U.S. grocers are increasingly growing their investments in digital communications with consumers, from social media to mobile, in order to offer more relevant promotions to match today's shopping behaviors. So much so, that nine out of 10 retailers polled said they plan on reducing their budget from circulars and putting that funding into digital, according to Dunnhumby's second annual study "Advertising and Promotional Practices Among U.S. Supermarket Retailers."
The study looked at responses from nearly 70 food retailers, representing 4,600 stores across 34 states and found that digital circulars have become the norm, yet sophistication varies greatly from supermarket to supermarket. And for those that are allocating larger budgets to digital and social, these same retailers are much more likely to measure the effectiveness of their efforts. Larger stores, upwards of 50 locations, are much more likely to offer an interactive version that is searchable, clickable for each item, linked to recipes and connected to an online list generating and ordering tool.
"Digital circulars are increasing in their importance, especially as retailers are able to offer a more personalized experience, showing only those items that are relevant to a consumer. As these capabilities improve, the impetus for the printed circular will fade," Haluk Nural, senior vice president of retail consulting at Dunnhumby told FierceRetail.
In an age of personalization, only 36% of respondents are using segmentation in their print pieces, although 42% said the plan on segmenting print outreach in the next two years. Demographics and and past purchases are the top two drivers for creating segmentation. In total, about 39% of companies use target outreach in digital and almost 45% expect to have that capability in the next tow year.
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"As the means to personalize advertising and communications becomes easier for the vast majority of grocers to achieve, personalization will no longer be something that only the large chains can execute," Nural said. "We are already working with retailers to help them change the conversations they have with their suppliers, as they build their joint promotional plans. Voice of the customer is being utilized much earlier in the planning process, leading to more effective and relevant promotions. Ultimately, this is a win for the retailer, the supplier, and most importantly, the customer."
Social media plays a large role in the industry and is used by almost 96% of those surveyed. Most retailers are using in-house or a combination of in-house and agency staff to handle their social media. Their preferred platforms are Facebook and Twitter, followed by Pinterest and YouTube. Almost 29% of retailers post one or multiple time per day and 20% post once a week or less.
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Looking to the future, Nural believes retailers will need to have a deep understanding of their shoppers in order to keep their best customers happy. Retailers can use data sources and digital platforms to directly communicate with shoppers, offering them personalized content and promotions, that will keep them coming back.