Hansen's IGA Improves Bottom Line Profit Through Digital Ad Savings

Nov 2, 2022

As we approach the fourth anniversary of the Independent Grocers Alliance's new National Digital Ad, we are speaking with retailers who have shifted a significant portion of their print advertising dollars into digital to see what their experience has been.

The National Digital Ad gives independent retailers access to technology that they would usually be priced out of, IGA CEO John Ross explains.

"We want our retailers to have the less expensive, more modern, and much more effective solution offered through digital advertising so they're getting more bang for their advertising buck, and more sales because of it," Ross says. 

That solution includes:

  • A targeted local ad buy that reaches shoppers in your area in the online spaces they visit most
  • National and regional offers from CPGs like Coca-Cola, Mars Wrigley, Kellogg's, and more
  • The opportunity to add your local content, including videos, GIFs, local offers and products, events, and more

Retailers who engage with the National Digital Ad are quickly seeing the difference digital makes. "When switching from print to digital, the average increase in ad exposure is 73%," IGA Director of Digital and eCommerce Programs Sarah Rivers says. "And 27% of shoppers who see a store's digital circular end up coming to the store."

Rivers spoke to Brian Downing, pricing director at Hansen's IGA, an 11-store chain in Wisconsin, about his experience with the National Digital Ad. In 2020, they removed all of their print spend and shifted to digital, which has resulted in a 0.375% increase to the stores' bottom line profit. 

Keep reading to learn more about their results, including nearly 1.5 million ad impressions and 5,000 store visits in September alone driven by their digital ad.

Hansen's IGA Digital Experience

Sarah Rivers: Brian, tell me about your journey to go digital with your weekly ad. What were you doing with print and what made you decide to move into a digital format for your circular?

Brian Downing: We had been kicking around the whole digital idea for some time. Our fear, as I am sure is the case with most retailers, was the potential negative impact to our sales.

If anything good came of COVID, this was it. Due to the manufacturing and distribution issues in the early days of COVID, we, like many others, were forced to cut our print advertising all together. COVID opened the door for us to get started with digital and get back to advertising fairly quickly.

The digital format is perfect for making those last-minute adjustments."

Rivers: Did you reduce print or cut it out altogether? 

Downing: We cut all print advertising at the beginning of COVID (beginning of 2020). After a couple months we began doing our own digital format internally, but there were obvious limitations to what we could do ourselves.

We then started doing some print advertising via a 1-page flyer in the local shopper papers, which we continue to this day. Basically, this was like publishing the ‘front page’ of our traditional 6-page flier.

Then in October of 2020 we began working with IGA and Design House and got going on their digital circular plus distribution platform. Since April of 2020, we have not published a single paper circular. Even with the additional cost brought on for the digital media, we are saving approximately 25% in total advertising costs. Our goal is to ultimately eliminate advertising in the shoppers as well, which should reduce that cost another 25% or so.

Rivers: What kind of results have you seen?

Downing: Overall, we have attracted more customers and added profit to our bottom line through more targeted advertising. We increased our bottom line profit by 0.375% by removing our print spend and our average customer count is up 2.27% from 2021.

2.27% increase in average customer count; 0.375% increase in bottom line profit

We honestly don’t feel we took any negative impact to our sales in this process. It’s impossible to measure accurately, but we question if even 10% of our printed fliers were seen and read by end users and that probably includes the individuals who look at our ad but shop elsewhere anyway. So, the effective number of our customers who were actually using the printed flier as a resource is likely significantly lower than that even.

Today, we know for a fact how many people are seeing our digital ad. For example, in September, our digital ad received 1.48 million impressions, and 5,056 store visits came from people seeing our digital ad. Our average basket is up 28% since 2019 while the average number of items per basket has remained the same. 

Rivers: That's great! So even with current inflation rates, customers are consistently buying the same amount of items, which means they're not going to competitors — they're remaining loyal.

Downing: Yes. Speaking of loyal, we introduced a loyalty program in Q3 of 2021 to help overcome any possible negative feedback about the switch to digital advertising. We have slowly integrated our loyalty program into our base advertising and as of today our 1-page shopper flyer is 100% loyalty-driven. By this, I mean only loyalty customers get the advertised discounting. The idea here was to slowly help move our current customers into the digital world.

 

Hansens adThe Hansen's IGA digital ad received 1.48 million impressions in September 2022 and drove 5,056 store visits.

Rivers: How has the shopper response been to this new way of seeing your ad?

Downing: We get an upset shopper here and there. Really though, regardless of what you do you are going to have to deal with that. Generally, the ‘older’ customer base is going to have a much harder time making this adjustment. However, it is clear that the world is moving in that direction exponentially fast so that has even been minimal in the big picture.

Rivers: Very true. With Millennials already using digital ads frequently, and with Gen Z establishing their grocery habits for the first time, it's important to reach the younger generations where they're at: online and specifically, on their phones. 

Downing: Definitely. And with all that being said, one of the most positive experiences I had was helping an ‘older’ customer. She was really excited about the opportunity to use digital coupons, which we now have available through our loyalty platform. All-in-all, she was very positive about the digital format. 

Rivers: That's a great story, and very relatable. Many of our retailers are most nervous about the response from older generations, but the research shows that Baby Boomers and Gen X are the groups with the highest growth in using online advertising. So they are hopping on the digital train, which truly reaches everyone. 

As a program, has the digital circular been easy to implement and what has your experience been with our vendor, Design House?

Downing: The onboarding process with Design House was very easy. I can’t say enough about the team there. They have been very open to suggestions and are always very responsive to concerns.

Since March of this year, we have been doing our own uploads via a portal provided by Design House. We really don’t have to have much contact with Design House any longer, which I think speaks to the ease of their online platform. Having the autonomy to upload our own ads has been extremely helpful for us. We can now build and edit our ad 100% on our time.

While the Design House team is very helpful and responsive, it does slow the process down when you have to work through that intermediary level to get the final product. And you really don’t have to have a degree in marketing or design to put together a quality product.

Rivers: Why do you think other retailers should consider going to a digital format?

Downing: Flexibility, for one thing. We are always pushing our deadlines right up to that 11th hour so we can get our ad just right.

This program allows for so much flexibility. For example, if we get a hot buy on strawberries tomorrow, we can have that in our ad in minutes. Previously that would have been impossible to promote in a printed flyer. Conversely, if we got shorted product that we planned to advertise we can pull that from our digital media just as quickly.

I can count on one hand the number of misprints we have had to put up in our stores since we started using the digital circular and all those instances involved issues with items that we advertised in the printed shopper. Even for a novice, this is a product that is quite simple to learn, understand, and use.

And then you look at the reporting capabilities. You can get a very granular look at how well your advertising is doing in any area you want to measure. And just like the flexibility of the flyer itself you can easily use those tools to reallocate your spend away from some areas and into areas of more need. That is just not something you can do with print media!

To learn more about the National Digital Ad, click here.

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