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The 14th annual GEMCON (Global Electronic Marketing Conference), to be held this year from October 24-26 in Las Vegas…and will focus on the theme, “Using Technology to Connect With Consumers.” GEMCON is designed to be an opportunity not just to learn from an outstanding roster of speakers, but also to exchange ideas and interact with other retailers as well as leading brands and technology providers.

(Full disclosure: MNB Content Guy Kevin Coupe will serve as GEMCON’s moderator/facilitator for the third year in a row.)

To get a preview of some of the subjects that will be spotlighted at GEMCON 2005, MNB conducted an exclusive e-interview with Carlene Thissen, president of Retail Systems Consulting (RSC), the driving force behind the conference.

MNB: Is it your sense that companies are doing more or less these days to use technology to understand their customers better and then act on that knowledge?

Carlene Thissen: Retailers certainly are using technology more often and in a more sophisticated manner. We see many of the supermarket retailers, as an example, truly doing customer targeting with their frequent shopper data. Often this is not visible to outside observers because it is a form of "stealth marketing" - marketing that your competitors cannot see - but it is happening and it has a real impact on consumers. Part of the invisibility is that often the targeted offers, discounts, coupons, etc. are executed electronically rather than in paper form, through the retailers' POS systems. And consumers find out about them via Internet sites and in targeted emails. Albertsons recently started a new program in Chicago called Avenu that delivers targeted savings this way.

There's a lot of development out there among the vendors of systems and programs that support retailer technology. Companies that used to be primarily loyalty card providers, like Capture Resource, Inc. for example, have expanded into customer data capture systems - CRI even provides a customer sign-up kiosk with backlit brand advertising.

Targeted offers can also be delivered in the stores via kiosks connected to the Internet. Betacorp Management markets my favorite new kiosk product - it uses 3D holographic kiosks to attract attention, deliver coupons and entertain consumers at the same time. The holographic images are just like the ones in Star Wars - objects (usually images of products on promotion) floating in space. Consumers are often seen trying to touch them!

I'm also seeing a greater interest on the part of retailers to work with CPG manufacturers to use the technology that helps them understand consumers better and helps them act on that knowledge. Margaret Bigley from Pathmark stores, one of the frontrunners in this area, said it well when she addressed the Brands at last year's GEMCON: "I can't promise you a display or a truckload sale, but I can promise you a relationship with a customer!"

Regarding growth in this area, I think two things are going to accelerate the use of technology in the future exponentially beyond the rate it's growing today. One is the growing use of email marketing and targeted interactive websites with their inherent economic efficiencies (so much less expensive than direct mail, interactive, easy to measure and easy to change when something isn't working). ComScore Networks now regularly monitors Internet behavior related to the supermarket/CPG industry so retailers and CPGs can get more proficient at recognizing how consumers navigate their websites and can see when consumers visit multiple specific websites. For example, when eBay just announced they were buying Skype, comScore took a look and saw that 664,000 Internet users in the US visited both those sites in July of this year. The knowledge they provide will help consumer goods companies better design their websites with consumer preferences in mind. ComScore also has a customer-specific survey tool they developed in conjunction with a Catalina Marketing product where consumers are invited to take part in surveys. It can be tailored based on overall spending, purchases in specific categories, or even right down to purchasers of specific products.

The other thing I think will accelerate the use of technology is the Gen Yers turning twenty - they'll be consumers now, with jobs and kids and homes. The Internet is their medium of choice and they're suspicious if you can't communicate that way. They download their music onto iPods and they email pictures from their cellphones, so as consumers, they're going to expect technology in marketing. They multi-task, and so will be comfortable with messages delivered in a combination of cellphones, on-cart advertising, self-scanners, in-store kiosks, overhead display screens and checkout printers. MobileLime cellphone-based marketing should have a lot of appeal to the Gen Y consumers, for example. It's a communications system in which shoppers receive offers and messages from their favorite retailers on their cell phones, before or even during the shopping experience. The MobileLime phones can also be used (with a PIN number) to pay for groceries at checkout. Even the tried and true checkout printers are developing technology to increase consumer appeal: in January, Catalina Marketing is going to upgrade its printers so they can print photo-quality color images with quality equal to FSIs.

MNB: GEMCON is going to feature a former Wal-Mart/Sam's Club executive talking about data mining and how to get a return on investment...but, of course, very few companies have the kind of investment capital that Wal-Mart does. Do you think these kinds of solutions are becoming more affordable and that more small retailers are embracing them?

Carlene Thissen: The question about small retailers embracing data mining solutions has more to do with economies of scale than the actual cost of the hardware and software. Corema, for example, is a large and fairly expensive database system used by Safeway and a few other large chains; independents could never afford it before. However, Storenext Retail Technologies, a combined venture of Retalix and Fujitsu (developer of Corema), is focused on leveling the technological playing field for independent retailers and Corema is one of its offerings. They'll do it through subscription-connected services that don't require in-house servers or support. Catalina's R-DOL (Retailer Direct Online) is also moving into the independent environment. "Pay as you go" models for software will also make technology affordable for independents. At the same time, wholesalers are becoming more adept at supporting the retailers they serve with database technology and the ability to deliver information about offers to consumers and delivering the offers via POS systems in the store.

MNB: Several years ago at a GEMCON, an executive with a major company explained her frustration because in her company, the people in charge of loyalty marketing (who understood what people were buying) simply didn’t talk to category managers (who were buying the merchandise to sell to customers) - a great example of organizational silos. Do you seen any evidence that these silos are breaking down on any kind of industry-wide scale?

Carlene Thissen: I'm afraid these organizational silos still exist at retail, but we are seeing efforts (mostly driven by astute Marketing execs) to bring them together. As companies become better at using their data to target consumers, they will need to merge Category Management and Loyalty or else their stores will suffer from the disconnect. In a simple example, if a Loyalty Marketing Manager says the top ten percent of a company's customers buys a product that the Category Managers say should be discontinued and they're not talking to each other, then there's going to be a lot of confusion internally as well as what top customers perceive.

One of the challenges is getting technology that functionally addresses both disciplines and measures business performance from both perspectives. Today there are people and companies with expertise in one or the other, but you really don't see the combination very often except as a concept.

One of the things that's still lacking is software that specifically combines the two areas. Even in the consulting business most of us tend to embrace one or the other; you don't often hear of anyone offering the combination of loyalty and category management as one discipline. CONNECT3 has programs that come very close, connecting merchandising, advertising and marketing. They "version" content copy, pricing, etc. in advertising media that can be targeted in hard copy to areas where specific consumers live, or delivered electronically on a customer-by-customer basis.

MNB: Finally, you're going to have a retailer (Marv Imus) talking about the best and worst tech-driven programs he’s ever used. Tell us about the best executed and worst executed programs you've ever seen...and how the worst one might have been rescued through a different sort of execution.

Carlene Thissen: Probably the worst one I've ever seen was actually a great idea conceptually, but one psychological factor was missed in the process. One of the independent retailers we know (not Marv) had the idea to provide an entire Thanksgiving dinner to their best customers. They put together large boxes that included turkeys with all the side dishes and trimmings, including pumpkin pie, of course and then they delivered these boxes to the homes of their best customers. The reaction? Not good. Unfortunately, I think it reminded the recipients of meals delivered to poverty-level families, and did not go over well at all. But the retailer is well respected in their community and was able to weather the error in the end. I think delivering a personalized letter with an announcement that the retailer would like to "Have you as our guest --- in your home" for Thanksgiving might be a better approach. A local charity here in Naples does something similar. You receive an invitation to a fundraising tea. Inside the invitation is a teabag and a letter requesting support.

Generally speaking, anything that is difficult for the consumer to do is "the worst." Programs where consumers cannot use their phone numbers if they forget their cards; where they can't get credit later for dollars spent; where benefits are difficult to understand; where complying with the rules is more trouble than it's worth; in my opinion they are all "the worst." Consumers want us to make things easier for them. Easier will increase usage.

My favorite program is a little tougher to come up with. Generally speaking, I think promotions that involve well-trained in-store employees are the best, because of course the store employees are the supermarkets' ambassadors to consumers. Winn-Dixie did one recently where the consumer received varying dollar amounts of FREE (somehow I never seem able to type that word lower-case) steaks for points earned through spending levels. The store people who are given the flexibility to keep shoppers happy did a great job customizing the program for various customers (those who don't like steak, for example) and it was very successful.

Creative involvement in the community is also high on my list. Country Mart, an AWG-supplied retailer in Kansas City, runs a scholarship program for high school seniors. Seniors encourage their family, friends and neighbors to shop at Country Mart and use their Country Mart cards - the last names and loyalty card numbers are entered on the Internet. One point is awarded to each student for every dollar spent on his or her behalf and at the end of the program at each store, the student collecting the greatest number of points wins a $1,000 scholarship; runner-up gets $500, and third place gets $250.

And then of course, especially these days, is anything involving gas. Giant Eagle has an ongoing program in which consumers get 10 cents off per gallon for every $50 spent. Consumers scan their Giant Eagle Advantage card right at the pump, which reduces the amount, paid per gallon.

For more information about GEMCON 2004, go to:
KC's View:
If you’re anywhere near Vegas in late October, we hope you’ll come by and say hello and see what GEMCON has to offer. We always enjoy our days at this conference, in large part because of the quality of the people it attracts.