Tuesday, November 29, 2011

Raley's Combining High-Tech and High-Touch Tools to promote its Stores For the Holidays

Above: Inside the Raley's superstore on Colusa Avenue in Yuba City, California. The 'Raley's Kitchen' in the photo offers in-store, chef-prepared entrees, sides and more, including meats hand-carved to order by the chef. It's part of the extensive deli and fresh-prepared foods offering in the store, which is a category Raley's is noted for. Photo courtesy I-5 design. March 3, 2011.

Turkey & Technology -- Grocers, new technologies and holiday promotions

West Sacramento, California-based Raley's Family of Fine Food Stores is using a combination of high-tech digital and high-touch low-tech tools to create promotions it hopes will drive shoppers into its stores in Northern California and Northern Nevada during the crucial-for-grocers mid-November to December 31 holiday food and grocery sales period.

Text for a discount and chance to win

On November 16 (and running to December 31) Raley's kicked off a promotion in which shoppers are invited to send a text message to the number "678678 Save" in order to receive $10 off any purchase of $100 or more in one of the grocer's Raley's (superstores) Bel Air Markets and Nob Hill Foods (supermarkets). Raley's operates a handful of discount warehouse stores under the Food Source banner. The promotion doesn't apply to the Food Source stores.

After sending the text message, consumers get a confirmation code back, which they give the store clerk at checkout in order to get the $10 discount of their purchase of $100 or more.

Sending the text message also enters shoppers into a contest, which offers the chance to win a free deli party tray.

Raley's is giving away 10 of the deli party trays, which include: two Spinach Dip trays valued at $19.99 each; four deli meat and cheese trays (valued at $29.99); and four Quesadilla Party Trays, which have an estimated value of $44.99, according to the grocery chain.

Participants must be 18-years-old or older in order to enter the text message-based contest.

The drawing for the deli party trays, which is being conducted by the Pocketshop LLC firm for Raley's, takes place December 15. Any remaining prizes will be rewarded on December 31, according to the grocer.

Raley's promoted the send-a-text-for-a-discount promotion and contest on the front page of its November 16-24 weekly advertising circular, which is direct-mailed and inserted in daily newspapers, and distributed to homes throughout Northern California and Northern Nevada.

The grocer also promoted the send-a-text-for-$10-off promo using Twitter's Promoted Tweet program, doing so during the week running up to the Thanksgiving holiday.

Raley's is currently promoting it on its Facebook page, on Twitter and in its stores.

We like the text-for-a-$10-dollar discount for three main reasons.

First, it requires shoppers to do a little work in order to get their $10 discount, unlike merely putting a coupon in the weekly ad circular or posting it online. And since text messaging is so common and popular, it's second nature for consumers to take a few seconds and text for their discount, which helps to ensure a higher participation level (than say sending an e-mail to get the discount) in the promotion and contest because it uses what's become a fast to use and near-ubiquitous digital technology.

Additionally, having shoppers send a text in order to get the $10 off and participate in the contest also has the added marketing benefit of capturing all those phone numbers from which the texts are sent. Such a data base could be used by Raley's in the future, say to send out special text-based promotions our other communications, for example.

Lastly, the text-for-a-deal promotion and contest creates some excitement among shoppers who participate.

It also offers the potential to generate some good word-of-mouth PR for Raley's. For example, it's likely some people sent a text messages to family members and friends telling them about the $10 off deal and the contest, and in turn those folks might have sent text messages to others, sharing the message.

Using social media - Twitter and Facebook - to communicate the promotion also has the potential to create additional virally-spread excitement around it, resulting in even more word-of-mouth buzz for the text message-based promotion.

Retweet to help the hungry

Speaking of social media and creating buzz, on Monday Raley's launched a charitable promotion for its Food For Families program, which donates food and cash to food banks in the communities where it operates its stores.

Using Twitter - both the Promoted Tweets program and its own Raley's feed - along with its Facebook page, the grocer posted this tweet yesterday, November 28: "Giving goes viral! Please RT this message and @raleysstores will donate 25 cents to Food For Families. Visit us here at Facebook."

As the tweet says, for every RT, which stands for retweet and is a way people can share other users' tweets with their followers on Twitter, Raley's is donating 25 cents to its Food For Families program, and thus to the food banks, every time the tweet, and additional ones like it, are retweeted on Twitter.

Like the text message promotion, this donation-backed, cause-related promotion also offers Raley's a solid opportunity to have a considerable amount of buzz created around its brand and stores, along with doing good at the same time. The grocer obviously realizes the potential, as it hopes it's giving offer goes viral.

Raley's also has an additional - and generous - promotion going on for its Food for Families program for the holiday season.

The grocer is offering grocery bags of food for the hungry in its stores for $10 per-bag. Between now and Christmas, for every bag customers buy to donate, Raley's is doubling the offer, donating another $10 bag of groceries to local food banks, for a total of $20.

Shoppers don't even have to visit a Raley's-owned store to donate. They can do so online here, and Raley's will match the donation. The grocer will then donate the groceries directly to the food bank closest to where the person lives.

Free black coffee on Black Friday

On Friday November 25 (Black Friday) Raley's put away the high-tech tools and used old fashion human-power and shoe leather to promote its stores in its hometown Sacramento area, offering a touch of warmth and much-needed caffeine to early-bird holiday shoppers.

We call the approach high-touch, as compared to high-tech.

The privately-held grocer, which has sales of about $3.1 billion annually and is owned by Joyce Raley-Teel (daughter of founder Tom Raley and the company's chairwoman) and headed up by her son, CEO Michael Teel, sent street teams armed with hot cups of Peets Coffee and discount coupons out to numerous jam-packed malls and shopping centers in Sacramento and the nearby cities of Folsom, Roseville and Natomas on Black Friday (and the following Saturday and Sunday).

The Raley's ambassadors armed with free hot coffee and the discount coupons were "warmly" received by the early bird Black Friday shoppers on what was a fairly chilly late night/early morning in the Sacramento region, according to a Fresh & Easy Buzz reader from Sacramento who wrote us and said she was out shopping with her daughters on Black Friday and received a much-appreciated free hot cup of Joe (or in this case Peet) from members of the Raley's street team.

A Christmas tree lighting meets Foursquare 

The street team promotion on Black Friday came just two days before what is a big annual event for Raley's and the Sacramento area.

That event, held the night before Thanksgiving on November 23, is the annual Raley's-sponsored Theatre of Lights Christmas Tree lighting in Old Sacramento, which is an historic and popular part of the city that dates back to the California Gold Rush era of the 1800's. [Kati Garner, a writer for the local Sacramento Press blog has a write up and great photographs of the event, which was attended by over 4,000 people, here]

Raley's Stores, which also uses the Foursquare social media site in addition to Facebook and Twitter, offered consumers a $5 digital coupon if they checked in on their smart phones at its Foursquare home while attending the tree lighting event on November 23.

'Tis the season

The less than two month Thanksgiving through New Year's Day holiday selling season offers a huge opportunity for food and grocery retailers in the U.S. The three holidays are numbers one, two and three respectively in terms of the amount of money consumers spend on food, compared to all other holidays, for example.

But this opportunity, like most do, also comes with challenges, the big one for grocers being the fierce competition out there during this time of year. Every grocer knows, after all, what we just told you, which is that the period from mid-November to the end of December is a time when grocery shoppers are spending big. And each grocery chain wants the majority of those holiday food dollars to be spent in its stores, which generally means heavy promoting.

And, usually, to the victor go the spoils.

Beyond the season

Raley's is currently conducting a number of promotions in addition to those we've highlighted. One of the things the Raley's promotions we've discussed in this piece have in common is that each one also offers a secondary marketing/branding element to them for the chain, although we doubt the grocer planned it that way.

For example, the new-school digital and social media promotions help better brand Raley's as a modern and high-tech savvy of grocer, while the old-school street team event is a reminder of the high-touch aspect of the retailer.

And the generous food drive and assistance program to help the hungry, both in its digital and non-digital aspects, continues to brand Raley's as a caring grocer that helps people in the communities where it has its stores.

Raley's has been struggling financially for the last three or so years. Last year Michael Teel returned as CEO of the 75-year-old-plus family-owned grocer founded by his grandfather and owned by his mother, and has since been leading a reorganization strategy.

It's difficult to know how the plan is working because being closely-held Raley's does not release revenue or profit/loss information. Teel previously was CEO of Raley's in the 1980's-90's. He left to persue a variety of other business interests.

On the cost-cutting side of the balance sheet Raley's has so far gotten by fairly lightly, laying off about 300 people at its corporate headquarters and closing a few stores, in addition to most-recently announcing it will no longer pay health benefits for its retired except employees. Store-level workers, which comprise the vast majority of the grocery chain's employees, belong to the UFCW union. Therefore the move doesn't affect those already retired or future retirees.

As part of the restructuring which began last year when Teel took over as CEO, he flattened the organizational structure, eliminating many senior-level people, including in the marketing, buying and merchandising departments at the corporate headquarters in West Sacramento.

The move seems to have worked in our observation and analysis because since then Raley's marketing, merchandising and promotional activity has gotten not only better but more creative, along with becoming much more aggressive, as evidenced in part by the programs featured in this story.

The retailer has also sharpened its everyday pricing profile since early 2010, along with offering improved promotional prices on the items it advertises in its multi-page weekly advertising circular, among having made a number of other changes for the better.

The competition in Northern California, where the majority of the stores are located, is only going to get tougher, beginning next year, so Raley's will need to, among other things, continue sharpening its pricing pencil, along with continuing down the path it been on for a little over a year in developing, launching and implementing creative and effective promotions, both for the holidays and everyday, in order to meet the new challenges and increased competition coming its way.

[Editor's Note: It's a brave new high-tech, digital, social media world out there for food and grocery retailers. And the new tools offer retailers a myriad of new ways to promote their stores for the holidays. Between now and the end of December we'll be running a number of stories focusing on many of these new technologies, using the theme in the sub-head at the top of this story - Turkey & Technology to identify the stories. This piece about Raley's is our first.]

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