Online sales flyers give retailers another way to reach shoppers
By Andrea McKenna Findlay
Since the crash of the dot-com pure-play retailers, the web is looking more and more like traditional retailing. Brand is king and playing on brand loyalty is the key to sales. So it stands to reason that retailers will replicate in the online world what has been successful in the offline world.
That’s even true when it comes to newspaper inserts.
Several companies, such a CoolSavings.com Inc., DailyShopper Network Inc. and SalesHound.com Inc., are emerging to provide services that put retailers’ circulars online. Creating online circulars is not as simple as just pasting photos of the Sunday insert onto web pages; these services re-create the circulars to match the retailer’s logo and presentation. But as a web product, online circulars have the added advantage of being searchable. Customers can either shop for exactly what they’re looking for or they can browse them as they would a newspaper insert. They can then buy online or take the information to a local store.
Until now, the web had failed to take into account one of mass merchants’ primary advertising tools. “The fundamental marketing vehicle for these retailers is their print advertising circulars,” says Carol Perruso, president and COO of Daily Shopper, one of the first companies to provide online circular services. “And those circulars were not being utilized online. We complete that endeavor for them.”
Two trends
Online sales circulars take advantage of two converging trends in American society—the increasing use of the web and the decreasing readership of newspapers. In fact, CoolSavings’ customer surveys show that nearly half its members do not subscribe to a local newspaper and therefore do not have access to savings found in Sunday sales circulars. CoolSavings’ statistics mirror the population in general. Daily newspaper readership dropped from 77% of adults in 1970 to 57% today. Sunday readers, who are most likely to see the inserts, fell from 72% of adults to 67%. Significantly fewer than half of those under 34 read a newspaper.
Retailers still will use other advertising media because of their reach, but with the increase in online usage they have to consider the web as well, says CoolSavings’ Chairman Steve Golden.
Just as consumers have to look in the newspaper to find the circular or pick one up when they enter the store, so too the online circulars reside on the service provider’s page as well as at the retailer’s site. And just like their real-world counterparts that draw customers into stores, online circulars do drive traffic, Perruso says. Two regional clients, whom she won’t identify, reported that 10,000 consumers had viewed their online circulars within a short period after they appeared. Some retailers who do their own circulars have said that they see traffic spikes on Sunday evening after the weekly circular posts.
Consistent message
Already posting sales flyers for Radio Shack, Fred Meyer Stores and Fry’s, DailyShopper, which recently underwent a reorganization and management buyout, is shooting for 20 of the top 100 retailers by the end of this year. Its entire approach says retailing’s successful web strategies will be the strategies that succeed in the physical world. “It’s not about e-commerce, it’s about commerce,” says Maris Daugherty, vice president of relationship marketing for Radio Shack. “When they pitched the NetCircular service to us, it was very apparent that they had a clear understanding of click-to-brick—promoting the stores online by allowing customers to access the circular online.”
Radio Shack has been a DailyShopper customer for a year and while Daugherty won’t reveal details about the sales the circulars have generated, she says online circulars are driving traffic. The circulars have generated incremental sales, are easy for consumers to use and are easy for Radio Shack to deploy, since DailyShopper creates and hosts the flyers. Daugherty adds that DailyShopper has spent a lot of effort making sure the online circulars represent Radio Shack’s brand image accurately. “We have a very consistent message from the printed flyer to the web circular,” Daugherty says. “I know that when my flyer comes out everything is correct and that we’re represented the way we want to be as a brand.”
Daugherty says Radio Shack and DailyShopper have created a strong relationship based on DailyShopper’s attention to details. “They’re very focused from a web distribution perspective and the results are that we have a consistent message from the print version to the online version,” she says.
Different stories
Companies that provide online circular services take product files from the retailer based on their current sales circulars and organize the information, such as the photos, prices and item descriptions, to match the look and feel of their circulars. Product information is put into searchable databases, which have cross merchandising ability that allows shoppers to input search words that will bring up all items with that word in it or related to it. Some retailer sites that do their own online circulars often do not have search capabilities and are difficult to read online because they may be just an electronic representation of the print version.
Aside from matching up items and brand presentation on a retailer’s web site, companies that provide online circulars also can help retailers tailor pricing based on where shoppers are coming from. Daily Shopper and SalesHound both offer what is called story versioning: the adjustment of prices for consumers in different markets. “Retailers often zone their pricing geographically and one barrier for them when putting circulars online was preserving this zone pricing,” says Perruso. “We developed our searches so that you can’t get any information until you put in your ZIP code.” SalesHound says users can input any starting point, from ZIP code to an exact address or intersection to get the local deals.
Landing a big one
SalesHound, which started out operating a web site for consumers to search for sales online, began creating online circulars last year. It soon landed one of the biggest retailers as a client: Sears. In late May, Sears.com began featuring an online sales circular under the “Browse This Week’s Ad” section of Sears.com, which also runs on the SalesHound home page.
SalesHound believes that putting sales circular information online is paramount to retailer branding. “Most brick-and-mortar stores have brand equity which they can leverage online by putting sales information on the web sites,” says Brian Hand, CEO and founder of SalesHound. “Putting circulars online can help retailers turn their web sites from a cash register to a media channel because a lot of consumers going on those sites are looking for information on a purchase. The way to look at this market is that there is an opportunity open when a customer is telling you they want to use the web site. It’s an opportunity to take current promotions and get them online.”
CoolSavings.com, a site known for its promotions and incentives, is the newest player to provide online sales circulars to retailers. CoolSavings designed the sales circular product to drive traffic into bricks-and-mortar retailers and grocery stores, as well as to help online retailers increase catalogue and online sales.
The CoolSavings sales circulars offer real-time tracking that allows retailers to see which offers online visitors view. “With newspaper inserts, retailers don’t know if consumers will look at it, whereas we know if they look at the online circular,” says Golden. Retailers also can quickly update their circular online and target consumers locally to fit their changing sales and traffic needs.
CoolSavings.com is adding retailer circulars from such stores as GNC and Petsmart to its own consumer web site, where 4 million members go to look for deals at retailers and online stores. Golden says the web site had 13.5 million visits in the first quarter. “Retailers will put circulars on their sites but we can give retailers more reach because of our traffic,” says Golden. “Retailers still have to reach out to consumers online. They can’t just rely on consumers to come to them.” CoolSavings can combine circular offers with its established base of coupons and discount deals it has with retailers, which can give consumers incentive to shop at stores and web sites.
Portland, Ore.-based Fred Meyer Stores, which started using DailyShopper in 1999, says putting the Daily Shopper online has been a success because it helped the store target the online audience. The chain says that the service allows Fred Meyer Stores to reach customers it might have missed in print advertising. Traffic to the online circular far exceeded the company’s expectations, the company says.
Finding the loyal ones
The costs of putting circulars online are less than the printed counterparts. SalesHound charges from $50,000 to $500,000 per year depending on how often a retailer advertises the circular information. Retailers typically pay about $85 per 1,000 print circular inserts, Hand says. “But the real value is that when consumers click onto the sales circular online they are 100% interested in getting product information and possibly making a purchase. It’s not like when a retailer spends money to send out marketing material hoping that some consumers are interested,” Hand says. “And those people who come to the site for circular information are brand-loyal consumers. Why wouldn’t you want your web site to promote your store sales when loyal customers are looking for products?”
Costs for Daily Shopper’s NetCircular service, which are based on the printed circular pages that are translated, are $35, $45 or $55 per page printed, depending on the amount of work needed to translate the pages online, says Perruso. Setup fees start at $10,000. CoolSavings charges from $8,400 to $15,000 to produce and host circulars and track usage.
Retailers are just catching onto the idea that they can reach consumers if they are online to check out deals. As more shoppers come online, market observers expect them to be looking for product research, especially as more retailers combine their shopping channel promotions and as consumers cross over between offline and online shopping. “Using a web site to find store circulars is a new idea and a new application of the multichannel strategy,” says Mary Brett Whitfield, director of PricewaterhouseCoopers’ E-Retail Intelligence System. Because of the newness, Whitfield cautions that it may take some time for consumers to catch onto the practice of looking for the sales circulars online.
Even so, companies who see the opportunity to provide this information to retailer web sites are expecting good responses. “It’s evident with the new players entering the market that the retailers are interested in this type of solution,” says Perruso. “Consumers are very interested in knowing what retailers are promoting in print and on the web. And more consumers are doing their pre-shopping on the web. Smart retailers want to be where their customers are.”
andrea@verticalwebmedia.com
