Going Postal No, you can’t actually mail a letter at Wal-Mart. But for one day last month, you could get stamped there.

The U.S. Postal Service issued its Daffy Duck stamp April 16 with a one-day promotional blitz in Wal-Mart stores. U.S.P.S. traditionally throws “second-day ceremonies,” offering special cancellations the day after a new stamp is issued. On April 17, Daffy Duck Stations in all Wal-Mart stores had postal employees selling stamps and hand-canceling purchases, while Wal-Mart staffers sold T-shirts, mugs, and related merchandise. It’s the first time U.S.P.S. has done mass-market merchandising, an important step in spurring stamp collecting.

Why Wal-Mart? The chain cut a licensing deal with U.S.P.S. and Warner Bros. for Daffy stamp-related merchandise. And the foot traffic in 2,000-plus stores doesn’t hurt.

“This is a second-day ceremony in its purest form, on a mass scale,” says Azeez Jaffer, U.S.P.S. executive director of stamp services.

Warner Bros. approached Wal-Mart, which already sold Warner-licensed stuff, and the chain liked the idea of partnering with U.S.P.S. for a joint product launch. U.S.P.S.’s national marketing staff wrote the “cookbook” of guidelines for the promo, and local post offices staffed Wal-Mart stores, using the plum assignment as an incentive for postal employees. “Mobilizing our resources to be in 2,000 stores for one day was a huge undertaking,” Jaffer says. DraftWorldwide, Chicago, developed the integrated marketing plan for the program.

The Postal Service began a retail merchandising program two years ago, selling licensed merchandise in post offices. But it quit when customers got frustrated waiting in line to buy stamps while someone ahead was buying a T-shirt. “We’re a government agency. Our job is to process mail,” Jaffer says. “We can’t get into selling tchotchkes in the post office, that’s not our core competency. Mass market stores can expose people to a whole different aspect of our business” without compromising post office service.

The Postal Service spends $20 million to $22 million a year on marketing programs, primarily to pitch stamp collecting to kids. Collecting has fallen dramatically since the mid-1950s, but still contributes $100 million to $150 million to U.S.P.S.’s bottom line. That’s a drop in a $6 billion bucket, but it helps keep postage rates down about a quarter of one cent.

Check Your Impulse Grocers will get some up-front advice from M&M/Mars and Time Distribution Services this month on how to make $1 billion more in checkstand sales. Mars and TDS collaborated with six retail chains (500 total stores) on a study called “Front-End Focus,” and will recommend best practices for checkout lane management at the Food Marketing Institute convention in Chicago.

The study, conducted by Dechert-Hampe & Co., Northbrook, IL, found that top-performing checkstands have 24 percent higher sales than stores with average checkstand performance. That translates into more than $1 billion in potential revenue nationally, the study asserts.

Checkout lanes account for $4.3 billion in supermarket sales – 1.1% of all store sales, but 1.5% of profits. The front end is so important to consumer satisfaction that it should be managed as its own department. “The checkout lane is the only place in the store that everyone walks through,” Dechert-Hampe managing director Ray Jones explains. “Their experience there leaves an important impression.”

M&M/Mars, Hackettstown, NJ, and New York City-based TDS (Time Warner’s distribution arm) clearly have an interest in convincing grocers – and mass merch chains – to manage the front end as a separate department rather than lumping it in with category management in the aisles. “In most supermarkets, the front end is managed by committee,” says Jones. “Most grocers couldn’t even tell us how they were doing, because they had no benchmarks and didn’t aggregate sales by checkstand,” tallying them instead with aisle sales.

When Dechert-Hampe crunched the numbers, it found a dramatic range of performance. The best stores had a basic mix of candy, magazines, soft drinks, film, and batteries. A broader mix isn’t necessarily better.

One study goal is to “establish Mars and TDS as leaders in this area,” Jones admits. “They’re both already major players [in checkstand distribution], but they wanted to establish an information database” to offer retailers.

Mars and TDS begin pitching the data this month, offering to evaluate a chain’s sales against the benchmarks set by the study. In the meantime, here’s their top-line advice:

* Focus on major categories: Confectionery, magazines, soft drinks, batteries, and film generate most of the sales and profits. Forget multi-SKU lines like razor blades – they’re not impulse buys, and there are too many varieties to stock up front.

* Stay stocked: Consumers don’t typically shop across lanes for impulse products. Make sure key items are in every lane.

* Choose items based on purchase frequency, impulse appeal, and image, as well as sales, profits, and productivity.

* Check your demographics: Vary your product mix by store to suit local shoppers.

Peeking into the Pod Online grocer Peapod, Skokie, IL, in March launched an online research service for packaged goods marketers. First subscribers are Colgate-Palmolive Co., Kraft Foods, Nestle USA, and Ralston Purina Co. The service, called Consumer Directions, is described as “a two-year learning cooperative” testing Internet marketing tactics including product assortment, virtual P-O-P, Web ads, and targeted technology to customize products and promos. Peapod will create customized stores and promos on the Web to test different marketing scenarios with individual consumers, then overlay results with each shopper’s demographic and purchase data from its database of 100,000 subscribers. George Douaire, Peapod’s vp and general manager of interactive marketing services, oversees the project.

Take that, ATM bandits Leave it to a C-store chain to remind competitors of the definition of “convenience.” Dairy Mart, Hudson, OH, has put no-fee ATMs in 600 stores in seven states. The chain gives up the $1.50 transaction fee most ATM stations charge (it can’t do anything about bank charges, though – those still apply.) The no-fee pitch is part of Dairy Mart’s plan to boost same-store sales by improving convenience and value for shoppers. (Sales in 25 stores opened last year are five times higher than older stores. Thirty to 40 new stores this year should add $120 million in revenue.) Nearly 75 percent of ATM customers make a purchase when they stop to use the machine, and they spend more than non-ATM users, Dairy Mart reports. Radio, outdoor, print, and in-store collateral support the no-fee promise.

Oil Barons Clark Refining & Marketing, Glen Ellyn, IL, reprises its More Miles Per Dollar coupon book for nonprofit fundraising. Nonprofits get the books free from Clark, then sell them and keep the cash. Clark vendors including Coca-Cola, Procter & Gamble’s Pringles, Nabisco, Superior Coffee, Hershey’s, M&M/Mars, Sprint, and Gatorade supply a total of $13 in coupons good at Clark’s 700-plus gas stations and C-stores. This is the book’s fourth year.

Breeds and Brands PetsMart, Phoenix, AZ, is letting Catalina Marketing Corp. install Checkout Coupon equipment in its 455 pet supply stores beginning in August. It’s the first pet supply chain for Catalina, and the first category killer in the St. Petersburg, FL, company’s retail network. Catalina’s system is in 11,800 supermarkets nationally.

Got a question for retail buyers that you’re too shy to ask? Promo Edge’s Retail Research Center polls buyers nationwide with your questions, and we print their answers. Supermarket, drug, mass merch – choose your channel and fire away. E-mail questions to Promo Edge care of [email protected], or fax them to (507) 645-9504.

Q: My cross-promotion involves cereal and orange juice. What’s the best way to present the promotion to store buyers?

A:To pitch a cross-promotion between brands in different departments, contact your regular buyer first. If you pitch the cereal buyer, he’s likely to present your campaign to the juice buyer for approval. If you want P-O-P in both departments, each brand should work with its respective buyer.

In general, a buyer must approve every promotion appearing in his area. The exception is a cross-promo with no P-O-P or price change in one department. If you offer 50 cents off when shoppers buy your cereal brand and a can of frozen orange juice, you won’t need the juice buyer’s approval as long as the OJ price doesn’t change and you don’t ask for P-O-P in the beverage case.

Two other groups must approve your joint campaign. Merchandisers and store managers ultimately decide how the promotion works best in their stores. Category merchandisers oversee shelving andsign -age. Store managers assign P-O-P locations for maximum impact. Address their needs in your proposal.

Changing Courses Midstream Kraft Foods is revamping its six-month-old corporate marketing campaign with more emphasis on consumer promotion and co-marketing and less on image TV spots. Kraft will trim its $50 million budget and reallocate funds away from advertising.

The company is testing a full-blown corporate equity campaign in four markets, running spot TV, consumer promotion, direct mail, and merchandising. The four test markets will host seasonal campaigns pegged to summer, back to school, and holidays under the taglines “Backyard Flavors of Kraft,” “Back to School Flavors of Kraft,” and “Holiday Flavors of Kraft.” Grocers will be offered co-op TV during those flights. Two non-seasonal efforts, dubbed Weeknight and Wake Up, will run as full campaigns without co-op TV. National promos continue under corporate umbrellas and for individual brands.

National ads will air under a “fairly selective” schedule throughout the year, says Kraft spokeswoman Moyra Knight. “We’re still assessing when those peak periods will be when ads will run.” Kraft broke the warm-and-fuzzy TV spots in September via J. Walter Thompson USA, Chicago, which continues as lead agency on the equity program. Co-marketing shop J. Brown/LMC Group, Stamford, CT, produced retailer-specific versions of Kraft’s holiday TV spots to support retailer donations to local food banks.

“We had to downscale Kraft Foods Equity because increased commodity costs and a weak Canadian dollar forced changes in our marketing strategy,” Knight says, adding, “Kraft isn’t reducing its commitment to brand advertising. Kraft Foods Equity was developed as an overlay based on strong advertising for some of our key brands.”

“The TV spots are beautiful, but they’re so soft that you couldn’t spend enough money on national advertising to make that alone drive volume,” says Jon Kramer, president of J. Brown/ LMC Group, Kraft’s co-marketing agency of record. “By using the equity campaign as a co-marketing platform, Kraft can use those feel-good ads to drive merchandising support.”

Since 1996, Kraft has used what then-president John Bowlin called “one voice” to aggressively leverage its full portfolio with grocers. Consumers don’t really care that Kraft is the corporation behind brands like Jell-O, Post, and Miracle Whip. But retailers do, and they like the media weight Kraft offers. Kraft can parlay that into merchandising support that speaks louder with consumers. If the four-market test bears that out, Kraft likely will expand the program nationally in 2000.

Separately, Kraft named Colangelo Synergy Marketing, South Norwalk, CT, as agency of record for the Kraft’s Sales & Customer Service division. Colangelo will handle all trade materials including Kraft Plus, a menu of customer service programs. Colangelo had been agency of record for the sales staff at Kraft’s Beverages & Desserts division. It replaces GMG Marketing Services, Philadelphia, on the corporate-wide business.

The More, the Monopoly-er McDonald’s is adding two new partners to its annual Monopoly Game promotion, which breaks in late March. Best Buy and Tiger Electronics, the maker of Furby talking toys, go for a walk on Boardwalk this year, joining Chevrolet, Nintendo, Hasbro, and the Oahu Visitors Bureau.

Monopoly’s grand prize is $1 million cash, but the “smaller” prizes provided by partners are attention-getting. Chevy brings a convertible Corvette to the game; Best Buy provides 200 home theater systems with Sony TV and VCR plus a Yamaha sound system. Oahu springs for a Hawaiian vacation, and Tiger, Nintendo, and Hasbro round out the prize pool with toys, including the popular Furby. Simon Marketing, Los Angeles and Oak Brook, IL, handles.

Best Buy is eager to piggyback on McD’s estimated $4.2 million ad campaign for Monopoly. “We hope this promotion will lead to a long-term partnership on a national level,” says Best Buy spokeswoman Laurie Bauer.

Best Buy needs a high profile as it expands nationally, adding 40 stores a year for the next five years. The chain now serves 50 percent of the U.S. with 311 stores in 36 states raking in $9.5 billion in sales. Best Buy stores may run McD’s TV spots on its display TVs.

McDonald’s added a scholarship overlay this year, too. “A Chance to Advance” will award a $50,000 college scholarship to one teen entrepreneur and $25,000 more in $5,000 and $500 grants. Kids in grades 6-12 with their own businesses or nonprofits entered in McD stores and via Junior Achievement’s and McD’s Web sites.

The scholarship contest is a nod to Big Mac’s 3,000 franchisees. Those owner/ operators have been unhappy with McD for adding too many new stores and cutting into franchisees’ sales. Same-store sales stabilized in ’98 after slipping for five years. McD has given owner/operators more say in marketing through five regional divisions that set nearly half the promotion calendar.

Sending the Very Best in Sweeps Hallmark will run two vacation-themed sweepstakes this spring for Ambassador cards and reprise the Kids Card Contest for its Expressions >From Hallmark line.

The campaigns are important because each brand is sold primarily in a single channel – supermarkets for Ambassador, mass merchandisers for Expressions. Hallmark relies on retailers to promote the brands, and retailers count on market-leader Hallmark to drive traffic to the highly profitable card aisle. Hallmark has a reputation for playing hardball, demanding retailers carry only Hallmark lines. That magnifies the company’s responsibility to drive category sales. (Hallmark did not confirm by deadline whether it requires exclusivity in its contracts with supermarkets and mass merchandisers.)

Ambassador’s Mother’s Day sweeps is part of the promotion menu Hallmark offers to the 10,000 grocery stores carrying the mid-scale line of Ambassador cards, wrapping paper, and gifts. A Father’s Day sweeps was developed for Salt Lake City-based American Stores Co. food stores.

American was “pretty eager to get a custom promotion,” says Joseph Eveler, promotions strategist for Ambassador and Expressions From Hallmark. “They’re one of our biggest accounts, so we wanted to do a promotion designed just for the chain.”

The Mother’s Day Reunion, set for April 25-May 9, will give away a trip worth $20,000 for 25 family members to Sanibel Island, FL. Posters and aisle-wobblers drive shoppers to the card department for mail-in entry forms. Hallmark’s retail merchandisers put up most materials. Ambassador’s menu includes “Anyday” price deal promotions that grocers can run whenever they choose. “Ambassador has the luxury of discounting the brand,” Eveler says, an option Hallmark’s flagship brand doesn’t have due to brand integrity concerns.

The June 7-20 Father’s Day sweeps will award three trips to World Golf Village in St. Augustine, FL, worth $3,000 each; secondary prizes are golf gear and balls. American’s Lucky Stores’ north and south divisions each get a prize pool, while the company’s Acme and Jewel Stores chains share one. SJI Inc., St. Louis, developed and handles fulfillment for both promotions.

The company tapped FLA USA to barter its grand prizes for the Ambassador sweeps. In exchange, the state tourism board gets mentions on all Hallmark campaign materials. FLA USA has been the most aggressive tourism group to broker promotion deals. “If we compared our ad budget to, say, Illinois, we spend a lot less,” says FLA USA promotions and p.r. director Maria Hayworth. “So what creative ways can we get our message out? Promotion is the number one way.”

Hallmark is dabbling in a little touring of its own, too. For its second go-round, the Kids’ Card Contest added a tour bus to visit schools and some of the 7,000 mass merch stores that carry Expressions. Kids enter an original card design, and 12 winners in four age categories get their cards printed as part of Expressions’ lineup. Winners get family trips to the headquarters of Hallmark in Kansas City and promo partner Binney & Smith – maker of Crayola crayons – in Easton, PA. Hallmark also will make donations to school art departments. The tour runs through March 14. Last year, 3,000 stores drew 35,000 entries.

Hallmark tests promo ideas with consumers, but the results don’t always win over retailers. “They have their own opinions about what works in their stores,” Eveler shrugs.

Oh well. It’s a communications business, after all.

Retailer Realities Got a question for retail buyers that you’re too shy to ask? We’ll do it for you. Promo Edge’s Retail Research Center polls buyers nationwide with your questions, and we’ll print their answers here. Supermarket, drug, mass merch – choose your channel, and fire away.

E-mail questions to Promo Edge care of [email protected], or fax them to (507) 645-9504.

Q: Spring is here. What’s the best way to promote my lawn and garden products in your stores?

A: Lawn and garden centers and mass merchandisers say price is very important to consumers, and should be highlighted with store circulars and signs. Shoppers also like mail-in rebates and multiple-product discounts. To boost store traffic at off-peak times, some retailers run pre- and post-season promotions.

If you’re using P-O-P, choose materials that are strong enough to support heavy products, and water-resistant to withstand spills and moisture from plants. Traditional corrugated displays don’t survive in a humid garden center. Wooden pallets are better because they raise products off the floor and away from moisture. Most retailers surveyed prefer pre-packed, palletized displays for heavy products like topsoil and fertilizer. Different-sized pallets enable stores to tailor displays to their space. Retailers like smaller items such as seed packets and bulbs in pre-packed shipper displays that showcase and organize products at the same time.

Amateur gardeners crave information, and retailers expect manufacturers to help provide it, especially in warehouse-style stores like home improvement centers. Brochures, headers, and packaging should offer product information, gardening tips, even how-to illustrations. Retailers say that providing information up front via P-O-P and packaging reduces returns and customer complaints. n