1
Illini
Consulting
Group
University Case Study
Competition 2015
Las Vegas, Nevada
By: Mike Azzaro, Leah Horton, Rachel
Richardson, and Aaron Wall
1.
Introduction to Wakefern
2.
Defining the problem
3.
Addressing the changing
market
4.
Providing a solution
5.
Implementation
3
$14.7 Billion in Sales Last Year
Largest retailer-owned
cooperative in the U.S
#1 Privately held company in
New Jersey in 2014 NJBIZ
5
ShopRite from Home
Pickup/Delivery
Price Plus Club Card
Facebook, Twitter, Instagram
Smartphone App
Online Circular
Printed Circular
What is the future of retail
circulars?
7
1.What is the future of the grocery
industry?
2.What is our vision for Wakefern?
3.How do we plan on implementing
this strategy?
What is the future of the grocery industry?
Brick and Mortar
Albertsons
A&P
Walmart
Giant Food Stores
Heritage’s Dairy Stores
Trader Joe’s
Wegmans
Online
Fresh Direct
Netgrocer
Peapod
Market Basket
Amazon
Competition:
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What is the future of the grocery industry?
By 2020, millennial shoppers will overtake
baby boomers
Millennials are using more digital touch
points
What is the future of the grocery industry?
On average consumers took fewer trips to the
retailer, but spent more money
Stores with loyalty programs had more
transactions
Digital coupons are 12% more active than free
standing inserts
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What is the future of the grocery industry?
Shopping Patterns cont.:
Change in Use of Coupons
Smartphones
Magazines
and Newspapers Store Flyers
+5%
-6%
86%
81%
71%
75%
0%
20%
40%
60%
80%
100%
Under 25
25-34
35-44
45-54
Perce
nt of p
eop
le
Age
Selected Email as Preferred Method of
Communication
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25%
15%
9%
5%
0%
5%
10%
15%
20%
25%
30%
25-34
35-44
45-54
55-64
Percent of People
Age
Selected Mobile App as Preferred Method of
Communication
Retail Marketing Spend Plans in the Next Five Years
What is the future of the grocery industry?
54% of retailers say digital marketing is
going to be critically important in the
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Our Vision for Wakefern:
React to digital mindset
Personalized Digital Circular
Phase 1: Launching “My Deals” via
email and app
“My Deals” Key Features:
Advertises ten items
Purchase history
Complementary items
Pulled from current weekly circular
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What would it look like?
• In the Email:
What would it look like?
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Phase 2: Phasing Out Printed
Circulars
Where would you start?
State
City
Pop.
Average
Age
Median
Household
Income
Pennsylvania Philadelphia 1,547,607
33.5
$35,386
Maryland
Baltimore
621,342
34.4
$39,241
New Jersey Elizabeth
126,458
32.4
$39,937
New York
Albany
97,904
31.1
$42,830
Delaware
Wilmington
71,292
34.8
$38,468
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2016
Five Cities
26 Stores
Phase 2: Phasing Out Printed Circulars
Mailed Circulars Initial: Reduce 25%
Annual Rate: Reduce 7-10%
2018
25 Additional Cities
29 Additional Stores
Mailed Circulars Initial: Reduce 25% Annual Rate: Reduce 7-10%23
2020
50 Additional Cities
62 Additional Stores
Mailed Circulars Initial: Reduce 25% Annual Rate: Reduce 7-10%Phase 2: Phasing Out Printed Circulars
2022
All Remaining Cities
~103 Remaining Stores
Mailed Circulars Initial: Reduce 25%
Annual Rate: Reduce 7-10%
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Implementation Details:
Timeline
:
Phase 1: Implement the “My Deals” Circulars
Before the holiday season 2015
Phase 2: Phase out printed circulars
Implementation Details:
Costs:
Current App/Email resources & capabilities
Utilize Wakefern’s current shopping data
Improve accuracy of predictions
Purchase data from external source
Trade data with external source
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$8,695,895 $21,491,160 $48,272,800 $95,165,941 $117,849,298 $20,000,000 $40,000,000 $60,000,000 $80,000,000 $100,000,000 $120,000,000 $140,000,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025Projected Cumulative Savings Across 4 Waves
2016 - 2025
(Calculated at Median Printing/Distribution Costs)
Wave 1 Waves 1 & 2 Waves 1, 2, & 3 Waves 1, 2, 3, & 4
Range of Projected Savings: $68.98 - $166.71 million
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References
Ray, Jamie. "Moving Circulars into the Digital Age." Direct Marketing News. Haymarket
Media Inc, 21 Nov. 2011. Web. 2 Feb. 2015.
"Newswire ." Today's Empowered Shoppers and Opportunities to Reach Them. Nielsen, 24
Sept. 2014. Web. 05 Feb. 2015 Published Feb. 2014, NCH Annual Topline U.S. CPG Coupon Facts Report For Year-End 2013
[PowerPoint slides] Retrieved from:
http://www.nationalgrocers.org/docs/default-source/student-programs/foodinstituteresources-2014-pdf.pdf?sfvrsn=2
Razorfish Health. Google Circulars. N.p.: n.p., 2012. Print.
The Why Behind the Buy. Publication. 9th ed. N.p.: Acosta, 2013. Print.
Valassis. Valassis Shopper Marketing Report Tracks Insights on Consumer Behavior to Drive
Engagement and ROI. Intelligent Media Delivery, 2014. Web. 4 Feb. 2015.
Valassis. Coupon Facts Report Reveals Evolving Media Mix and Marketing Strategies.
Intelligent Media Delivery, 2014. Web. 4 Feb. 2015.
Published Nov. 2011, eCirculars; Get into the Fold, Interclick from Yahoo! [PowerPoint
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Potential concerns and our
solutions
How will Wakefern attract new customers without
printed circulars?
Social media, referral programs, incentive to
download app
Is Wakefern missing out/ignoring the needs of the older
market?
Phasing out process is drawn out, tries to include all
generations
$167,229 $413,292 $928,323 $1,830,114 $2,266,333 $500,000 $1,000,000 $1,500,000 $2,000,000 $2,500,000 2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Projected Weekly Cumulative Savings Across 4 Waves
2016 - 2025
(Calculated at Median Printing/Distribution Costs)
Wave 1 Waves 1 & 2 Waves 1, 2, & 3 Waves 1, 2, 3, & 4
Range of Projected Savings: $1,326,634 - $3,206,032
