When it comes to shopper marketing, Steve Bernstein has an unusual background. In addition to serving as president of Bernstein-Rein which has worked with Wal-Mart, McDonald's, Ruby Tuesday, PetSmart and others, he is also involved with his dad's business, Beauty Brands, which he has used as an incubator and think tank for the agency. This concept marries a full-service salon and spa within a retail environment. Based on his experience, he has been pushing a concept called InsideOut Retailing. "We partner with retailers. We are retailers. We know how to operate on both sides of the glass," he said. Here are some of Bernstein's thoughts about what he has learned from working with some of the world's largest brands:
How did all of those years of working with Wal-Mart help shape your in-store marketing practices?
Steve Bernstein: Working with Wal-Mart for more than 30 years taught us that our ultimate focus should always be on the needs of the customer. And we have to make sure that nothing gets in the way of the brand's message reaching the customer, including what happens in store.
In the case of Wal-Mart, customers need a good deal on everything. So value was the ultimate brand message. Customers had to believe, at every point they engaged with the Wal-Mart brand, that they were honestly getting a great value. The customer's in-store experience had to convince them that every bit of savings was passed on to them. In-store displays could not be too fancy or expensive looking. The store itself needed to reflect cost savings. And you'd never find Sam Walton taking his top execs on an expensive retreat. But even more important, the associates needed to play a key role in the communication of the brand message. They had to be friendly, accessible, helpful and honest. Their attire had to be approachable, and the uniforms couldn't appear too costly. Essentially the lesson learned from Wal-Mart is that every associate needs to live the brand.
Tell us about the McCafé launch.
SB: The launch of McCafé was no ordinary product launch. It was a launch of a business within a business. McDonald's owner/operators have to invest a sizeable amount of money into adding the McCafé line to their existing offerings. The necessary equipment, store redesign and training adds up quickly. So our test launch of McCafé in the Kansas City metro area had to not only make customers excited enough to transact, but also prove to owner/operators it was worth the significant investment.
The challenge we had to overcome in order for this launch to be successful was to break the morning routine of those headed to the designer coffeehouses by convincing them the quality and taste of McCafé coffee was just as good. In solving this challenge, we acted like a business partner—rather than "just" an advertiser—as our InsideOut approach demands. We knew mass advertising had to be considerably compelling, but it also had to be complemented by some heavy lifting, both virally and in-store.
However, we couldn't simply generate buzz for buzz's sake. Since the product had parity with the designer coffeehouse offerings, we recognized trial was key to driving transactions, not buzz. If you knew that McCafé tasted just as good, why would you go someplace less convenient and more expensive? Customer engagement was crucial for trial. We interacted with consumers in-store, online, outdoors, on-the-road, you name it—and we did it in a way that was unique, memorable and fun.
Our test-launch efforts in the greater Kansas City area produced a weekly unit sales lift of 117 percent, with the average store achieving the sales goals of 300 to 350 sustaining weekly product units. During the promotional period, incremental sales increased 4.9 percent, while transactions increased 4.1 percent. And at a time when category sales are only up 1 percent, the McCafé launch continues to help regional McDonald's restaurants nearly triple these sales increases.
Customers love it. Owner/operators love it.
How did Beauty Brands come about and what you've learned from its launch?
SB: In the early 90s, Bob Bernstein, my father, recognized a gap in the marketplace. He saw that women were underserved with options when it came to salon-exclusive beauty products and services. Women wanted and needed to be able to get their hair and nails done on a Sunday or a Monday. And they didn't need to feel pressure from their stylist to buy product from a captive line that may or may not be good for their hair or skin types. So we, as a family, decided to fill that gap with what is now known as Beauty Brands. Beauty Brands now has 52 store locations in 11 states.
We've learned that, in the world of retail, it's not about what you have done for me lately. It's about what you have done for me today. That means that as a marketing partner, we have to be expeditious in our speed to market; we have to deliver remarkable ROI for everything; and that we can no longer build a great brand in an advertising vacuum, we have to drive transactions.
Experience has also taught us that brands are truly owned by the consumers. So in everything we do, every time we engage with our consumers, we are branding the business.
Where is shopper marketing headed?
SB: Shopper marketing is definitely becoming more and more of a hot area for advertisers, retailers and manufacturers alike. With some surveys claiming that upwards of 70% of brand selections are made in-store, it has to be a hot area. Advertising alone can no longer create brand loyalists.
Since many buying decisions are made on the spot, and as online retailers continue to draw consumers away from physical stores, advertisers and their client partners have to make the shopping experience and the marketing of products more enjoyable and attractive.