How an omnichannel mobile strategy might have eased A&P’s decline
Embattled supermarket chain A&P could have used mobile as the linchpin in an omnichannel campaign to reach consumers, helping to stave off its latest round of financial troubles in a fiercely competitive marketplace.
The grocer’s biggest oversight has been a lack of an omnichannel experience with mobile delivery and loyalty, and failing to invest more in mobile to attract the millennial consumer. Today, A&P, once the nation’s largest grocery with as many as 15,000 stores, is down to fewer than 400 and on the verge of its second bankruptcy filing in five years, Bloomberg reported.
“Today, not many grocers are using mobile to their advantage,” said Adam Meshekow, executive vice president for product strategy and national sales at Sito Mobile, Jersey City, NJ. “The only way to acquire new millennial shoppers, which are the fastest growing customer of the grocery vertical, today is done via mobile as they currently do not shop via newspaper circulars which is the primary marketing channel for grocers.”
A&P, founded as the Great Atlantic & Pacific Tea Company in 1859, in recent years has struggled to compete with specialized upstarts like Whole Foods Market and Trader Joe’s, as well as the largest United States grocer, Walmart.
A&P declined to comment on its mobile strategy.
A&P needs a stronger mobile strategy to compete in a crowded marketplace.
“A&P is currently reviewing strategic alternatives for its business,” said Joanne Fischetti, communications and training manager for A&P, Montvale, NJ. “The review includes, but is not limited to, raising new capital from investors, considering new business partner relationships and exploring the sale of certain assets of the company.
“The review process is ongoing and no decisions have been made,” she said.
A&P likely would have benefited from embracing an omnichannel mobile approach that gives the smartphone user the complete shopping experience, from product browsing to deals, specials, checkout and delivery.
Having a mobile site that would permit anywhere, anytime shopping would make a store more attractive to consumers. ShopRite and Whole Foods Market have entered the fray with mobile shopping and home delivery options, following the example of FreshDirect and Amazon Fresh.
Adopting geo-fencing would permit the use of location data to target shoppers at and around a store location to promote its products. This tactic allows retailers to communicate messages to exact audiences across all mobile devices in key locations, an important tool considering 60 percent of consumers use mobile devices to find information on local products and services and 40 percent of those are on the go when searching.
Another option is leveraging a mobile customer relations management program to drive higher redemption rates, particularly when leaning on free standing inserts.
A mobile FSI is cheaper than direct mail, since it delivers weekly deals to consumer mobile phones via SMS text. In exchange for the deals, the shopper receives valuable customer data to use within other campaigns.
Another move would be to leverage rich media to capture the audience’s attention with an interactive ad experience.
For instance, during a big event such as the Super Bowl, a brand could deliver recipes to relevant consumers within a geo-fenced radius of a store that promotes certain products that the grocer wants to push.
Rich media enable consumers to get directions to the nearest store directly through the ad unit, boosting store visits and verified walk-in stats.
Verified walk-in that sends bricks-and-mortar retailers a confirmation when a consumer is served their ad and then enters the store allows retailers to measure their in-store sales lifts.
A&P’s woes point to the pitfalls for grocers and consumer packaged goods brands of failing to keep up with changes in how the public consumes content. Ten years ago, radio and television ads, coupons, freestanding inserts and weekly circulars were an effective way to reach shoppers.
Today, grocers no longer can afford to spend 75 percent of their ad budget on those media when they account for barely half the consumer’s media consumption.
And in a departure from the days of family loyalty to a single store brand, 45 percent of grocery shoppers go to two or more stores to check off their lists, while 30 percent shop at four or more stores.
In 2010, a year after marking its 150th anniversary, A&P tapped digital incentive and information management company Zavers to offer SMS-based mobile couponing at participating A&P grocery stores. That same year, however, outdated marketing strategies and high labor costs caught up with it and the chain filed for Chapter 11 bankruptcy protection. It emerged in 2012 with 320 stores.
“The key to succeeding in grocery today is getting consumers to be brand loyal to your brand,” Mr. Meshekow said. “The in-store experience matters as well, which many brands are failing at.
Mobile is the avenue to reaching millennials.
“Consumers want a good shopping experience with artisanal foods, prepared foods, and even craft beer,” he said. “Today consumers have no brand loyalty to their grocer with so many options available along with delivery services such as Fresh Direct and Amazon Fresh.
“It is not about just product and price anymore,” he said. “It is more about select merchandise, pre-packaged foods, quality ingredients, and reaching consumers via mobile, which is where the new consumers – millennials – are, who are spending $20 billion annually now through 2020.”
Michael Barris is staff reporter on Mobile Commerce Daily, New York