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features SymphonyIRI: CPG Marketers Need to Think Outside the Box When Establishing Merchandising Strategies Consumers have dramatically changed their approach to grocery shopping during the past decade. Today, shoppers combine online and offline planning with in-store visits, making more informed and cost-effective purchasing decisions. This new path to purchase is completely reshaping how consumer packaged goods manufacturers and retailers have to communicate with shoppers. "Smartphones, digital coupons, online retailers and the Internet combined with financial pressures and shifting marketplace dynamics are forever changing how consumers shop," said Susan Viamari, Editor of Times & Trends for market research company SymphonyIRI. "If you want to reach and resonate with shoppers today, you need to do more than traditional instore merchandising. "Emerging and evolving technologies have enabled innovative marketers to begin reaching shoppers in their homes while they are researching products and making their lists, and then reinforcing their messages on the way to the store and in the store when consumers are making their final selections," said Viamari. "Marketers that keep pace with and embrace this opportunity will achieve success, while those who fail will find it difficult—even impossible—to remain relevant and competitive." Merchandising has long played an important role in the CPG industry. It builds excitement, educates consumers and drives awareness. For those reasons and more, many categories rely heavily on merchandising activity to spur purchase behavior. During the past several years, more than one-third of CPG categories sold considerable volume (30 to 50 percent) with merchandising support. Trends in convenience and grocery channels closely mirror this. Support for merchandising in the drug channel, however, has recently experienced a steep decline. Marketers are investing merchandising dollars in an effort to raise the profile of product categories that cater to prevalent consumer rituals and underscore the value propositions they offer across key ritual-related categories. With consumers placing an increased focus on preplanning their shopping trips, embracing promotional strategies that begin to impact the shopper before she enters the store is well-advised. Resonating with shoppers begins by reaching out with the most effective media, but preferred media can sometimes vary significantly across CPG categories. While above-average heavy newspaper readership spans many major categories, for example, fewer categories show above- average heavy Internet usage. It is vital that merchandisers choose the appropriate medium to most effectively reach out to their desired customer base. "The 'old way' of doing things is simply not as impactful as it was in the past," said Viamari. "To capitalize on new and evolving opportunities, marketers must enmesh the broad and rapidly growing array of old and new media tools at their disposal. They must take chances and not be afraid to make mistakes." SymphonyIRI Group, a global leader in innovative solutions and services for the CPG, retail and healthcare industries, recently published its report on the importance of effective merchandising, "Merchandising Trends: Supporting the Value Proposition." To read the report, visit www.symphonyiri.com/Insights/ ArticleDetails/tabid/146/ItemID/1643/ View/Details/Default.aspx. n This is especially true in the retail industry. "By expanding the Visa Waiver Program to cover more citizens from emerging economies and markets like Argentina, Brazil, Chile, Israel and Poland, and reforming our antiquated visa review and approval processes, the JOLT Act will work to entice more foreign travelers and shoppers to our shores. "The Obama Administration has made great strides in reducing visa wait times over the past year, but more can be done to tap into the hundred billion dollar international tourism and travel market. "Just as our retail customers won't wait in line forever to make a purchase, foreign travelers won't wait long to enter the United States. Our visa system needs to be secure, simple and expedient." As the world's largest retail trade association and the voice of retail worldwide, NRF represents retailers of all types and sizes, including chain restaurants and industry partners. The organization represents U.S. merchants as well as those from more than 45 countries abroad. Retailers operate more than 3.6 million U.S. establishments that support one in four U.S. jobs—42 million working Americans. Contributing $2.5 trillion to annual GDP, retail is a daily barometer for the nation's economy. NRF's Retail Means Jobs campaign emphasizes the economic importance of retail and encourages policymakers to support a Jobs, Innovation and Consumer Value Agenda aimed at boosting economic growth and job creation. For more information, visit www.nrf.com. n being charged to businesses that accept credit card transactions. Merchants are currently paying base fees of up to 21 cents per credit card transaction, far higher than the 7 to 12 cent cap proposed by Congress in the Durbin Amendment "Visa and MasterCard have a stranglehold on the market. They set the fees in secret and banks all charge the same thing rather than competing on price," said Doug Kantor, Counsel for the Merchants Payment Coalition, a group of merchants concerned about rising swipe fees. "If they price-fixed consumer fees they would probably go to jail, but because the fee is charged to businesses and hidden they have managed to get away with it." According to the proposed settlement, $7.25 billion would be distributed among 7 million merchants across the country by the major credit card companies. The agreement would temporarily reduce the swipe fees paid by retailers, and also allow them to directly pass on the costs of swipe fees to their customers, something that had previously been forbidden. The settlement would not, however, lead to significant changes in the banking industry itself, or the system through which interchange fees are determined. It is for this reason that NACS and others strongly oppose the settlement. Critics of the proposed swipe fee settlement argue that it tacitly legitimizes what they see as the unfair anti-competitive relationship between Visa and MasterCard. Because accepting the settlement means forever giving up the right to bring future swipe fee-related legal action against Visa and Mastercard, it gives these companies even greater freedom to hike up these fees in the future. And since the settlement does nothing to cap these fees at a reasonable rate, it does not address the most significant criticism merchants have with the current interchange fee system. In an effort to fight the proposed settlement, merchants and merchant groups are currently waging a war of information, attempting to spread the word about why this agreement is bad for business in this country. A number of websites including www.merchantsobject.com and the NACS website are working to educate merchants and convince them to oppose the settlement. Visa and MasterCard, however, have not taken this fight lying down, recently filing a lawsuit against the websites for what they see as the dissemination of misleading information. A judge in the case ruled in April that these sites must prominently declare that they are not court-approved, while also providing a link to the official court-approved website for case information. Opponents of the settlement worry that if retailers do nothing to stop it, the proposed settlement will ultimately be approved, and they will have no further recourse against the credit card companies. For this reason, they have created an online form for opposing merchants to sign. By signing the form, retailers can opt out of the settlement and formally declare their opposition to it. The form is available at http://merchantsobject.com/opt-out-object/opt-out-object/. A hearing to determine whether or not the settlement should be given final approval is currently scheduled for September 12. n NRF Applauds Introduction of the JOLT Act The National Retail Federation recently released the following statement from NRF President and CEO Matthew Shay in support of the Jobs Originated Through Launching Travel JOLT Act: "With the average international tourist spending well over $4,000 shopping in our stores, staying at our hotels and eating at our restaurants, efforts aimed at encouraging more foreign travel is a simple way to spur economic growth and job creation. Swipe Fee Continued from Page 1 tion in the long running and contentious battle between retailers, the banks and the credit card companies. However, the actual outcome has been far from the amicable truce for which many hoped. Almost immediately following the settlement's approval, a number of major retailers, including Walmart and Target, as well as important merchant groups, such as the National Association of Convenience Stores and the National Retail Federation came out in opposition to the deal. Today, the fight over swipe fees has never been more heated, as more and more merchants are entering the fray, attempting to derail a settlement deal that is anything but settled. The Payment Card Interchange Fee and Merchant Discount Antitrust Litigation class action lawsuit was originally filed in 2005 against Visa and Mastercard on behalf of U.S. merchants who alleged that anti-competitive behavior among the two companies had resulted in exorbitant fees 12 C onvenienceRETAILER May/June 2013

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