SPAR adds wings to grocery items (image) - Article by Westchester County Business Journal,September 15, 2003
By David J. GLenn
A copy of Robert Brown's MBA thesis on a conference room wall in the SPAR Group's Tarrytown headquarters is about as comprehensible to the uninitiated as the business report in Japanese hanging on another wall.
But while the formulas and complex theories penned by Brown, co-founder, chairman, and chief executive officer of SPAR, may seem Einsteinian, the figures in the company's annual report are clear. In 2002, the retail-merchandising operation had revenues of nearly $71 million, and a reported profit of $5.3 million (a nice jump from a loss of $1.7 million in 2001 which was mainly due to selling a division under an employee stock ownership plan).
Brown, now 60, didn't suddenly wake up one morning and decide to start a merchandising company, but it was almost like that.
He was a graduate student at Columbia University in the 1960s and doing research at Hershey's. He knew that the legendary candy-bar company never advertised (it wouldn't start to do so until the 1970s) and that it relied on in-store promotions for most of its marketing.
"I decided to study that more closely," Brown recalled as he sat back in his moderately sized office on the top, sixth floor of 580 White Plains Road.
He discovered that the promotions had "a tremendous effect on their sales," and realized how important such merchandising can be.
In 1967, he partnered with college buddy Bill Bartels to form SPAR, and, at the cusp of the computer revolution, designed the SPARLINE software database and analysis with a customer base that included 70 percent of the top packaged-goods manufacturers, Brown said.
In the 1980s, SPAR began acquiring in-store merchandising companies from around the country, beginning with Gelso Marketing Services in Minnesota.
The acquisition of Marketing Force in suburban Detroit in 1996 expanded SPAR's database and enabled it to venture into video marketing. The company keeps most of its information technology at this location.
The acquisitions were the catalyst for SPAR becoming a national operation, most recently, an international one, starting with Japan and then Canada and Turkey. "We took these companies, which were failing, and turned them around," Brown said. Although the acquisitions meant some layoffs at those companies, SPAR kept many of the key people, in the belief that if given the right tools, these people could show improved performance.
Mike Devlin, vice president of Floor Graphics based in Princeton, N.J., is quick to vouch for such performance. SPAR is "technologically savvy, very responsive and innovative," he said.
Floor Graphics provides in-store displays for major manufacturers of packaged goods, promoting the products on floor displays at the supermarket shelves. He said that SPAR has been instrumental in Floor Graphics' growth in the last five years from servicing 500 stores to currently 10,000 nationwide.
"The industry norm for in-store advertising is an efficiency of about 90 percent", Devlin said, "SPAR offers more than 98 percent efficiency", he said.
Jay Forbes, vice president of customer development for trade publications Drug Store News and DSN Retailing Today, based in Manhattan, said there are several other leading merchandising companies in the United State, including another in Westchester, Stratmar Inc. in Port Chester, an that SPAR is among the best ones. SPAR principals are "knowledgeable, personable, and they do the job," Forbes said.
"SPAR" used to be an acronym for Sales, Promotion, Analysis, Reporting, but nowadays the company does "much more" than just those four things, said Patricia Franco, senior vice president.
With new software- much of it developed by SPAR itself- the company can offer services to its clients "where they need it and when they need it," Brown said.
"This gives us a tremendous competitive advantage."