ELECTRONIC MARKETING AND RETAIL'S FUTURE

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CHICAGO-Demographics are dead! Long live electronic marketing!

That was one cry rising out of an electronic marketing seminar, sponsored here late last month by Retail Systems Consultants. The overwhelming theme was that the information provided by sophisticated electronic marketing systems have the potential to fundamentally change the nature of retail marketing.

"It's truly a revolution," said Greg Gregerson, president of Gregerson Foods of Gadsden, Ala. "We are finally going to be able to target individual customers. We are going to be able to reward our loyal customers."

Companies like industry leader Catalina Marketing Corp., St. Petersburg, Fla., are growing fast.

Catalina Chairman Tommy Greer urged attendees to dump traditional demographics-based strategies in favor of what he calls "buy-ographics."

Mr. Greer said his Checkout Direct program "profiles consumers based on what they actually buy and reaches them where they buy." Vague demographic data, based on census figures and the like, is replaced by a hard, targeted approach.

A frequent criticism of Catalina's system is that it relies on paper coupons issued to select customers as they check out. Some retailers question this system because the coupons mean delayed gratification for the consumer, thus lessening the promotion's impact.

Micro Enhancements International, Spokane, Wash., will offer keen competition for Catalina. Micro's store kiosks let consumers scan their preferred customer cards as they enter.

The system spits out a list of discounts for which the customer is eligible, which are automatically entered as the customer checks out. Instant gratification.

The enthusiasm of retailers for electronic marketing contrasts with complaints from package-goods manufacturers.

"Electronic marketing isn't what I need it to be," said Glen Griffiths, director of sales, promotion and communications for McNeil Consumer Products Co. "The reason I am asserting my place in the development of electronic marketing is that I usually end up being asked to pay for it and I often refuse."

The problem, he said, is that the current systems are mostly oriented toward retailer needs, which are more category oriented. Mr. Griffiths said he needs more brand-specific information.

Probably the most controversial note of the conference was sounded not by a marketer but by an investment banker.

Retailers were warned they should be concerned about the financial health of the electronic marketing industry by Rita Spitz, partner at William Blair & Co., Chicago. A shakeout is on the horizon that might leave only a few of the seven major players still in business, Ms. Spitz said.

Carlene Thissen, president of Retail Systems Consulting, said retailers should remember the 1970s shakeout among scanning systems vendors.

Of the 12 vendors, only three still were operating in the early '80s, saddling retailers with millions of dollars in worthless systems.

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