2010.19 | Sales Flyers are Obsolete

Every week, two free local papers arrive on my doorstep, along with a great deal of unbidden detritus.  This is paper bound for the blue box without more than a cursory glimpse.  Ponder the thousands of other households across the country that receive that same unread paper, and the thousands that sit at the front of stores, only to be discarded at the end of the week.  While the humble grocery flyer as done its job well over the decades, it is truly an outdated concept.

Consider the following drawbacks of the current paper flyer ‘system’:

Expense – Millions are spent by retailers each year designing, information gathering, and editing those flyers for a mass audience.  That cost is significant, but dwarfed by the production cost of printing and distributing the flyers to papers and stores across the country.  Major chains with billions in revenue can spend tens of millions per year. The organizations can obviously bear the cost as part of their current profitability models, but in the low margin world of retail the opportunity to remove this level of cost represents a tremendous opportunity to increase profitability. 

Uncertain Results – What is the return on investment on these flyers to retailers?  There is no way of tracking it conclusively.  Millions of flyers are sent out to targeted postal codes, or placed at the front of the stores in shotgun fashion.  While counts could be made at the store on flyer usage and compared to store sales, there is no true closed loop process to verify what sales strategies work and which do not.  

Environmental Impact – Even if the flyers are successful in driving business, they are all discarded within a week.  While recycling is a great answer for what is out there today, we cannot overlook reducing and reusing first.  Given that so many of these flyers are not even read, is it an intelligent use of resources to produce them, recycle them and reproduce them again?    The best impact on the environment is to not produce them at all.

Given the pervasiveness of electronic interactions, why not move this chestnut into the 21st century?  Ubiquity of internet access, mobile device usage, and social media are pushing so many other interactions in that direction.  The advent of social media, and the recent statistic about more social media accounts than email addresses are driving new models of electronic distribution, and a retailer’s weekly flyer is no different. 

A critical success factor to bring to establish an electronic flyer as a viable alternative to its paper cousin is to bring additional functionality to the experience.  Posting the current flyer as it looks today on to a screen doesn’t encourage use.  Particularly when the paper versions still arrive at the front door, or sit at the front of the store next to the interactive kiosk or digital sign.    There has to be some value add to the consumer for an electronic flyer or it will not be used.  Many are working to crack that formula, and when someone does hit on the right combination of placement and functionality, there are definite competitive advantages to moving towards electronic distribution. 

Expense – The ongoing cost of printing and distribution can save a retailer tens of millions per year.  The current design team and process can still be leveraged.

Results – Electronic media can show what customers looked at, what they sorted by, and if loyalty is done correctly, what they bought.  These results can provide a deeper understanding of the effectiveness of sales strategies for items placed in the flyer.

Reduced Environmental Impact – Paper usage is avoided altogether.

Improved Customer Interaction – Understanding directly what customers buy and like and acting on it can increase wallet share and improve understanding of the retailer target market.

Brand Impact – Providing the customer only what they want in a customized manner will improve customer perception by simplifying their shopping process.

The challenge of course is to find the magic combination of interactivity and customer value to push consumers to use electronic over the paper flyers.  The touchpoints are aligning – the kindle and other digital readers, mobile devices, interactive digital kiosks, and the web.  I look forward to continued experiments on getting the word out there digitally to find the ultimate business objective – providing reduced costs with an improved customer experience.

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