The Bay turns its efforts towards micro-marketing

In a surprise move earlier this month, Hudson's Bay Co. shifted its $16-million television and radio advertising business to Padulo Integrated after slightly more than a year with Wolf Group Canada. There was no agency review. (The Bay's year 2000 media spend was nearly $53-million according to ACNielsen. The 100-store retail chain handles flyers, newspaper and media buying in-house.)

In a surprise move earlier this month, Hudson’s Bay Co. shifted its $16-million television and radio advertising business to Padulo Integrated after slightly more than a year with Wolf Group Canada. There was no agency review. (The Bay’s year 2000 media spend was nearly $53-million according to ACNielsen. The 100-store retail chain handles flyers, newspaper and media buying in-house.)

When making the announcement, Neil Fedun, marketing SVP for The Bay, discussed how The Bay’s marketing plans will change to reflect the new retail landscape.

Q: In what way have The Bay’s advertising needs changed?

A: The whole retail marketplace, when you look at North America in general, has flattened out a bit. It takes a little more to get the consumer motivated. That’s what we’re looking at now – our communications and how they would attract that customer.

One of the areas that is a huge opportunity is CRM. That we’ve launched the HBC program, the loyalty program pulling all of our banners together – Zellers, hbc.com, The Bay, and our Home Outfitters group – to allow customers to collect benefits through points and redeem them for merchandise is a big plus.

We are now also able to put a licence plate on that customer and track what her needs are and what she’s buying so we can do some micro-marketing to her. In doing so, we end up dissecting our marketing spend.

Q: How will that micro-marketing work?

A: Rather than one-size-fits-all communication that goes out every week to the masses, we’ll do more focused communications with edited assortments, to touch her with communication that is pertinent to what’s she’s buying.

It’s a whole new ball game because you’re looking at many communications to smaller groups that are very targeted. That takes a lot of work, manpower and energy.

Q: What media vehicles will be used?

A: There will be a lot of direct mail and a lot of smaller communications and segmented radio buys.

Q: Do these changes mean Canadian consumers are holding onto their purse strings a little tighter?

A: We experienced in the fourth quarter last year, not only with us but also in retailing in general, a flattening. People became conservative, held back and began talking about recession and stability. The view was not stable in the States so everyone just held back. It is going to take some time for them to come out and feel good again.

Q: Why is micro-marketing important to The Bay’s communications efforts?

A: I don’t think the consumer has the time to edit a mass assault. When you look at what is sent to people on a daily basis, what they’re exposed to, it takes a lot of time to sit and edit what works and doesn’t work for them. I think they need someone to do that for them. Someone has to talk to them in a way they’re interested in and receptive to.

Q: What message does The Bay want to deliver to consumers?

A: I think more than ever it’s all about value and also having products that are pertinent to their lifestyle and relevant to how they live. The way the economy is going right now, with a lot of the top-end merchandise we may find that designer labels may be translated into more moderate labels. Rather than going out and buying that $800 pair of shoes or that Prada skirt, maybe our consumer in Canada is wanting to get the look without buying the brand.

Q: Is that part of The Bay’s strategy?

A: We are definitely going after our private brands – To Go and Mantle – and we’re introducing two more in the back half of the year. They will offer the Canadian consumer the level of style she’s looking for and a price that’s very appealing. It will be taking the looks off the runway but translating them for a Canadian marketplace, so they’re affordable, something you can understand and translated to a Canadian style sense.

Q: What does the rest of this year have in store for Canadian retail?

A: I think we’re going to start up and get some momentum in the third quarter [and] the whole holiday season is going to be very promising.