One of the key marketing paradoxes of the early 21st century is that as communications technologies bring the world's peoples closer together, people are focusing more and more on what makes them most distinctive.
"The market is a lot more fragmented," said Gary Giblen, director of research, C.L. King Associates, New York. "In the '50s, everyone wanted to be like Ozzie and Harriet. Now, people revel in diversity."
As a result, supermarkets have been keeping an increasingly close watch on what sorts of diversity their customers have been reveling in.
"Local marketing has become a key success factor, not just an optional program," noted Giblen.
Consider the case of Shaw's Supermarkets, East Bridgewater, Mass.
Unmistakably a part of the global economy, the New England supermarket chain is owned by J Sainsbury, London, the U.K.'s second largest retail food chain, as well as the owner of a chain of home and garden supply stores and co-owner of a bank.
And yet, when it began planning to open a store in downtown New Haven, Conn., this highly international outfit took a microscopic look at the community it would be serving. "It is a community that has done an admirable job of reestablishing itself," Bernard Rogan, a Shaw's spokesman, told SN.
But who precisely were the store's potential shoppers?
"We turned to community development organizations," said Rogan. "With their help, we identified 40 different ethnic and religious groups in our market area.
"We asked our category managers and buyers to meet with the representatives of these various ethnic and religious groups.
"They went from category manager to category manager. We shared with them what our intentions were in opening the store. We asked them what they saw missing when they entered a typical supermarket. By the time we opened the store 60 to 90 days later, those items were on the shelves.
"They were things like goats' heads, for the Jamaican community. When the store opened, they went right to the shelves looking for the items they had told us about. Once they saw those items, they knew the store was their store."
Rogan also observed that the increasing size of stores requires them to be more aware of diversity. "As stores become larger, they are serving larger market areas, with a huge array of ethnic and religious groups," he said. "The stores have to be as diverse as the communities they serve."
Burt Flickinger, managing director, Reach Marketing, Westport, Conn., told SN supermarkets have devised a variety of strategies to match their product variety with the ethnic mix of their shoppers.
Some of the larger chains, he said, have created complex geo-demographic models. One company, for example, has developed 236 consumer profiles it can feed into its computers to determine what items it needs to offer in which stores. This information that results is so valuable, according to Flickinger, that this effort is largely paid for by suppliers, eager to find out more about who is buying their products. Smaller chains generally take a more seat-of-the-pants approach to local marketing.
Flickinger noted there tends to be one common factor to all successful local marketing initiatives: "The companies let their store managers provide a lot of insight in terms of marketing," he said.
Jan Hol, spokesman for Ahold, Zaandam, The Netherlands, whose international portfolio of supermarkets includes such U.S. chains as Bi-Lo, Greenville, S.C.; Giant Food, Landover, Md.; Giant Food Stores, Carlisle, Pa.; and Stop & Shop, Quincy, Mass., said, "We have only one strategy for local marketing: Be local for the locals.
"That's the way all our operating companies operate. They are very decentralized companies. That's how we run Giant Landover, and the same applies to our stores in Bangkok.
"Even in the Netherlands, which is a very tiny country, we have significant differences between the north and the south, even though they are only 100 miles away from each other. Still, there is a significant difference in the cakes and cookies each region prefers, and also in the wines."
As a highly global corporation, Ahold has learned that not all the world's shoppers shop alike. In Thailand, Hol said, women typically choose their supermarket based on the range of the health and beauty care items on the shelves. "If you don't have a good assortment, you're lost," he said.
Debra Lambert, spokeswoman for Safeway, Pleasanton, Calif., also told SN her company does not have a one-size-fits-all approach to local marketing. "Our company just doesn't do that," she said. "Basically, we operate in diverse neighborhoods -- heavily Hispanic neighborhoods in California and Texas, heavily African-American in Chicago and Washington, heavily Asian in California.
"In San Francisco, we have tailored our stores to their specific neighborhoods for a very long time. We continue to refine that process, and we're doing it more than before. Increasingly, we find we're competing not just with other stores but with speciality markets that have, here in California, for example, just Hispanic or Asian food."
Local marketing is not simply a matter of what products are on the shelves but how supermarkets make customers aware of those products. Sometimes, that means taking account of regional speech patterns.
Giblen recalled the misadventures of a successful New England supermarket company that attempted to expand into the Southeast. Up North, the company had depended largely on circulars and print advertising, but it took the outfit awhile to realize that down South television was a more popular and persuasive medium.
Then, when the company switched to broadcast advertising, it had its commercials made close to its headquarters just outside Boston. The result was an announcer with a distinct Yankee twang; the voice-overs had to be rerecorded in a Southern drawl before they starting producing sales.
Building customer loyalty, however, usually requires companies to move their marketing beyond advertising and more intimately into the community.
Flickinger pointed out this can be done in a variety of ways. Some supermarkets have successfully marketed around sports teams, from the highest level professionals to local college and high school teams. Others have focused on local charities.
He noted that while a few, and only a few, big chains have distinguished themselves in this regard, many regional chains and small independents have made this a speciality.
"As an independent, I take a David approach to local marketing," said Greg Calhoun, president and chief executive officer, Calhoun Enterprises, Montgomery, Ala., a nine-store chain. "I have to think that the Goliaths, the national chains, have got more capital, so I make sure we're out in the neighborhood promoting ourselves.
"We're in the churches. We run promotions with our churches. People bring their receipts from us to church, we give 1% back to the church.
"We hire through churches and local schools. We try to have our stores look like our customer base -- 40% white, 58% African-American, 2% Hispanic.
"The people I compete with think they do a real good job of trying to be a neighborhood supermarket. A lot of chain stores are operating differently now, giving the store manager more flexibility. The result is they are a little more competitive.
"The greatest challenge is most people have cares. People are shopping for value. It's a struggle to get people to shop where they live.
"But I think we do it best. I don't lead with price. I lead with service and variety. After 15 years, I think I know the market."
