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Q&A: Crossmark CEO discusses new business model

BY Antoinette Alexander

PLANO, Texas — Sales and marketing services company Crossmark has unveiled a new and innovative business model designed to drive faster sales growth and greater efficiencies for its clients and customers that will involve the hiring of roughly 100 new associates by year’s end. To learn more this model and what it means for suppliers and retailers in today’s changing marketplace, Drug Store News caught up with Crossmark’s CEO Steven Schuckenbrock.

DSN: Tell us more about this new business model?

Schuckenbrock: At a very macro level we are moving from generalists to specialists. We are [building] a new marketing and planning organization, which will complement dedicated client and dedicated channel teams. We are going to take the capabilities we have around consumer insights and consolidate those into one large team that really works on the key drivers/behaviors at the consumer level around health and wellness, green initiatives, multi-cultural and so on. [And we will] plan how those major themes interact with the categories and then the specific brands that we support within those categories in order to help build very precise plans. So, that level of planning and precision is very difficult to replicate in each region but when done once centrally leveraging insight and collaboration tools it can bring the best of local and national thinking. Leveraging this capability, our dedicated client and channel teams will be well armed to drive better growth outcomes.

DSN: Can you provide an example?

Schuckenbrock: I’m going to pick the baby category … and let’s assume that our consumer-oriented team has built a deep expertise on moms and a deep expertise on the buying implications of multi-cultural moms and that we then know how to apply that to the [baby] category overall. … In fact, we do find that there are real examples where an Asian mom has a very clear preference for the formulas that they buy that is very different than the formulas bought by Hispanics. We can clearly identify which SKUs resonate best and the demographics associated with each store. … Our client teams would then take that information and work directly with [a supplier] and come up with strategies to make sure that the right product is in the right place at the right time and make sure it is promoted effectively. Once we agree on what those strategies are we then work with the customer teams.  Our dedicated channel teams (Rite Aid for example) will be better equipped to help Rite Aid serve their shoppers more effectively enabling growth for the stores and for the manufacturer.

DSN: What is the catalyst for developing this new business model? Why now?

Schuckenbrock:  The consumer buying behaviors and preferences are changing. The retailers are working to leverage and integrate digital and in-store experiences, while the manufacturers are innovating to meet the significant shifts in product preferences. These trends and challenges require companies to leverage all of their “growth assets” in new ways. Marketing is becoming very local and sales needs to be very precise to meet the consumer in just the right places and right times. It is very difficult for service providers to meet these needs with a fragmented approach. That is why we are integrating our marketing and sales agency capabilities.  It will allow us to configure solutions with all of our assets for retailers and manufacturers in ways that speak directly to their unique needs.

DSN: What is the next phase?

Schuckenbrock: What lies ahead for us and our customers is a smarter way to achieve faster growth. These changes, along with state-of-the-art technologies, will enable us to see opportunities quickly. The dedicated nature of our teams will allow us to sustain partnerships that can spend time proactively driving the desired outcomes. Our business is all about execution and the better we equip our teams with information the better we will execute.  
 

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Survey: Millennials most open to fee-based loyalty programs

BY Antoinette Alexander

CINCINNATI — Millennials are more open-minded about investing in a loyalty program membership compared with any other population segment, according to the findings of a recent survey.

“These results should attract the attention of brands considering a shift to fee-based loyalty programs as marketers look for ways to create competitive differences and lock in customer spend against a backdrop of waning program effectiveness and engagement challenges,” stated LoyaltyOne consulting associate partner Lance Du Chateau.

The findings of the LoyaltyOne nationwide survey are based on the responses of 1,005 consumers in May.

Key numbers from LoyaltyOne’s fee versus free loyalty program research include:

  • 62% of respondents said they’d consider joining a fee-based rewards program if their favorite retailer offered one.
  • This number was even higher among millennials with 75% of 18 to 24 year-olds and 77% of 25 to 34 year-olds saying they’d consider joining a fee-based rewards program.
  • 65% said customer rewards are worth paying for if relevant to their needs.
  • Millennials, again, rated this even higher with 79% of 18 to 24 year-olds and 76% of 25 to 34 year-olds saying relevant rewards are worth paying for.
  • Nearly half (47%) said rewards in fee-based programs are better than rewards in free programs
  • A significantly larger number of millennials — 61% of 18 to 24 year-olds and 54% of 25 to 34 year-olds — said fee-based rewards are better.

The survey results emerge against a backdrop of high-profile marketplace developments. Earlier this month Walmart disclosed details of its new $50 per year fee-based delivery program called “Shipping Pass,” which is widely viewed as a challenge to Amazon Prime with its $99 per year fee. Jet.com is another emerging membership-based shopping club promising low prices at a $49.99 fee.

Du Chateau noted the survey found that 49% of overall respondents said all rewards programs seem alike. The perception of program sameness was even stronger among millennials, where the scores were 57% for 18 to 24 year-olds and 52% for 25 to 34 year-olds.


“Brands have historically hesitated to explore new loyalty strategies because traditional programs were still novel in most spaces. However this hasn’t been true for years. The perception that only a small minority shoppers will ‘pay to play’ is also a dated viewpoint,” Du Chateau stated. “Forty-two percent of consumers surveyed have already paid to join a program and 62% of respondents said they’d consider joining a fee-based rewards program if their favorite retailer offered one.”

Other key findings from LoyaltyOne’s research:

  • Of the respondents who already participate in fee-based loyalty programs, 69% said they were enticed by free shipping, followed closely by special discounts at 67%.
  • Women (67%) are slightly stronger than men (64%) in their belief that rewards are worth paying for
  • When asked which category would be most appealing if compelling benefits were available through a fee-based program, respondents ranked grocery and mass merchandise highest (35%), followed by credit card rewards (26%), specialty retail (13%), travel (18%) and restaurants (9%)
  • 32% of 18 to 24 year-olds and 34% of 25 to 34 year-olds said they have never been offered membership in a fee-based program, versus 25% of the general population.


 

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Survey: Online grocery shopping gains in popularity

BY Gina Acosta

LOUISVILLE, Colo. — U.S. grocery shopping habits appear to be changing as consumers increasingly seek out the convenience of online ordering when it comes to food, according to a new study.

A survey of 1,100 U.S. online grocery shoppers from natural and organic online grocer Door to Door Organics shows that more than half (54%) said in the past year they had increased the amount of grocery shopping they do online by an average of 29%.

Less than 4% said that in the last year they had decreased their online grocery shopping and 42% stated that the amount of grocery shopping they do online had stayed the same. Overall, shoppers indicated that an average of 19% of their weekly grocery shopping is currently done online.

While online grocery shopping continues to gain popularity, the majority of consumers still rely on multiple online and brick-and-mortar stores to complete their weekly grocery shopping. Only 13% of survey respondents said a single store (online or offline) meets their weekly grocery shopping needs, while 34% shop at two stores during a typical week and 53% shop at three or more online and/or offline grocery stores each week.

Respondents indicated they had on average only 82 minutes of free time every day and spent an average of 69 minutes each week shopping for groceries. Additionally, respondents estimated the average value of one hour of their time to be $56 per hour.

When it comes to what grocery products consumers are buying online, 23% of respondents said they do not buy fresh grocery products (e.g., meat, fish, dairy, produce) online. Of those who do purchase produce and other fresh grocery items online, 57% said they had been disappointed in the quality or freshness of these purchases at least once in the last year.

When asked what would make them feel more secure about the quality of fresh groceries when ordering online, 58% said knowing that the products were recently picked or packaged would increase their confidence, and 51% would be more comfortable if the fresh products were sourced from a local farm. Additionally, 25% said they would feel more secure about the quality of fresh grocery products if they were purchasing them from a specialty online grocer.

Click here for the full infographic.

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