Sprouts Farmers Market 2015 Annual Report Download - page 17

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9
Our Customers
Our target customer seeks a wide assortment of high-quality fresh and nutritious food as well as
vitamins and supplements at competitive prices. We believe our value proposition and complete grocery
offering engages both conventional and health-focused shoppers.
We have a broad range of customers from those looking for value, to customers seeking specific
attribute products, to those seeking to eat healthier. We believe the majority of our customers are initially
attracted to our stores by our fresh produce, which we offer at prices we believe are significantly below
those of conventional food retailers and even further below high-end natural and organic food retailers.
We drive customer traffic by aggressively promoting produce and other items through weekly
advertisements designed primarily to reach the everyday supermarket shopper. These customers include
“trial” customers that limit their shopping to specific products or departments, such as produce. Through
department-specific promotions, in-store signage, and customer education, many customers become
“transition” customers that shop new departments and try new products. Over time, through customer
service and engagement, targeted marketing, and increased knowledge of our product offering, we
believe that transition customers become “lifestyle” customers that shop with greater frequency
throughout the entire store.
Our Pricing, Marketing and Advertising
xPricing. We are committed to a pricing strategy consistent with our motto of “Healthy Living for
Less.” As a farmers market style store, we emphasize low prices throughout the entire store,
as we are able to pass along the benefits of our scale and purchasing power to our customers.
We position our prices with everyday value for our customers with regular promotions on
selected products that drive traffic and trial. We typically have about 30% of our approximately
18,800 products on sale at any given time.
xMarketing and Advertising. We supplement and support our everyday competitive pricing
strategy through weekly advertised specials, a weekly e-circular, online coupons and special
promotions. We send over 15 million weekly advertisement circulars to encourage customers
to shop at our stores. These circulars focus on product education and offerings and aim to
engage the customer. We use sales flyers distributed through direct delivery or inserted into
local newspapers as our primary medium for advertising. These sales flyers include
representative products from our key departments. In addition, we have a customer database
of over one million customers as of January 3, 2016, many of whom receive electronic
versions of our weekly circulars or monthly newsletters.
We tailor our advertisements to specific markets, which provides us with greater flexibility to
offer different promotions and respond to local competitive activity. In addition, we advertise
our sales promotions and support our brand image through the use of local radio, as well as
targeted direct mail in specific markets.
We also continue to promote and enhance our digital presence. We maintain a smartphone
app and our website, www.sprouts.com, on which we display our weekly sales flyers and offer
special deals and coupons and continue to expand our social media platform. Our website
also features on-line ordering for holiday meals and catering trays. The inclusion of our
website address in this Annual Report on Form 10-K does not include or incorporate by
reference the information on or accessible through our website herein. As of January 3, 2016,
we had approximately 1.3 million Facebook fans. In addition, we have partnered with Amazon
Prime to offer 1-hour or 2-hour deliveries from our stores in selected pilot markets. We will
continue to explore online ordering opportunities to further connect with our customers.
In addition to the weekly circulars, we offer numerous other saving opportunities for our
customers, all of which are meant to reinforce our value offering and are designed to appeal to
specific target customers. In 2015, we had approximately 31 department-wide promotions at