BrainTrust Query: What will the respective roles of marketers, agencies and merchandisers be in the new in-store media movement?
By Laura Davis-Taylor, Founder and Principal, Retail Media Consulting
Last week, we discussed the concept of creating a store GRP for valuating in-store retail media. Many comments were submitted, the common theme being that, although the concept makes solid sense, multiple challenges exist that must be resolved.
Most of the issues were rooted in the concept of the store as a media channel. Unlike other “burgeoning media” such as the internet, the store is an established channel where merchants control the turf. Most often, their teams strategize, activate and measure in-store promotions directly with brands. They rarely involve marketing teams and tend to keep results close to the vest. They also carefully screen promotional ideas to avoid “store clutter” issues, particularly now that store real estate has become more competitive to secure.
As marketing and agency camps are focused on creating brands and executing them at all touchpoints, it’s obvious that they have a role in the “last mile” of the brand experiences that they seek to create. However, complexities arise when they cross the line into the store, as they are unfamiliar with the challenges involved in retail store terrain. They are also not merchandising savvy and more focused on capturing awareness and impressions than generating sales.
At the heart of the debate is change. Agencies are changing their perspective on how to reach consumers. Retail marketing teams are changing their view on how to capitalize on consumer touchpoints in-store, clearly driven by a new emphasis on customer centricity. And everyone realizes that we need to link all efforts and budgets together.
Discussion Questions: If we are to find a way to firmly establish the Retail Media channel, where does merchandising expertise and marketing/advertising
expertise come together? What will be our greatest challenges? How can marketing and advertising teams be more involved with the merchants in planning, negotiating and executing
brand messages between the retailer and CPG?
As a retail media consultant, I confront these issues daily. In my mind, these “retail touches” do belong as an integrated piece of a yearly marketing plan.
However, I also understand that merchandising and store strategy are very different than traditional marketing. Having come from the advertising world, I’ve seen that it’s a stunning
learning curve that must be respected.
Retail media is more than advertising. It’s connecting the dots to all external efforts and should be focused on increasing sales and enhancing the store
brand.
Spencer Knisely, Sr. Manager of Design Integration at Best Buy, recently supported this perspective at the At-Retail Media conference in New York. When
presenting their digital signage efforts, he suggested that teams “make sure that the store digital media experience is supporting other media and merchandising efforts across
ALL channels. TV, newspaper, the store curb, your employees…all of it.”
And, you can’t overlook the actual challenge of capturing consumer attention in-store. A study done with RMS Services in the UK showed that digital screens
in Tesco stores were viewed for an average of only 3 seconds. This implies that we must know how to quickly communicate the most attractive feature/benefits of a product in very
compelling manner – something merchants and store experts know well.
The consumer doesn’t know if what they are viewing is the responsibility of merchandising, marketing, or advertising. The consumer perceives the mixed messages as one message from the same source. If those messages are integrated and reinforce one another the consumer develops a clear image of the brand. If the messages are different the consumer is confused. Debating who has responsibility or who should be in charge is the same old inside-out view of promotion. The marketplace has changed. Successful companies begin with an outside-in approach, meaning they start with the consumer — what does consumer perceive of the brand/store now? What response do you want from the consumer? Where could you reach the consumer? How can you best influence that response? — then design the best program and evaluate how it works. The silos of PR, sales promotion, direct advertising, advertising, marketing and in-store promotion need to come down. You are either sending one message to the consumer or you are confusing the consumer.
This is all outstanding and helpful commentary. I would like to add a scientific perspective to the “media metric” dimension that I think will also add to the creative, marketing and execution pieces.
Conceptually, I think it is helpful to create your view of the masses from a summing up of individual experiences. So, since nothing matters (in the end) but the sale, we should begin with a single item crossing the scanner, and ask, “What are the steps that led to this purchase?”
With this perspective, we can move back into the store, to the location where the product was selected – and we have to be able to distinguish whether that was the primary, in-aisle display, or a secondary display like an endcap or lobby. At the point-of-selection, we need to know the thinking process of the shopper, including visual cues. (Interviewing at this point is essential.) But then it is important to know what steps brought them to this point-of-selection, and whether in-store media played any role in that.
At each step of this process, we need to know also about all the non-buyers, non-shoppers. In other words, what is the share of shoppers who arrive at the point-of-selection that actually make a selection, and particularly why those who don’t, don’t. The conversion rate here is crucial, and something the brand manager can do something about – potentially. But we also need to know exactly how many shoppers had the relevant in-store media within their field of view, and, of those, how many actually noticed it.
These are the kind of detailed analytics that lead to understanding of individual sales, and add up to an understanding of group sales, as well as non-sales (which in some cases may be even more important, from an understanding point of view.)
As important as the sale is, we have to remember that the purpose of the media is to create more sales by motivating what would otherwise be non-buyers. It is this type of careful analytical metrics that is essential to parsing the impact of in-store media.
The real issue/need is not in-store advertising and promotion that plagues retailers and the related advertising and marketing businesses. Or said another way, “the problem.”
Interestingly, and factually if you will, it’s advertising outside the four walls of the football field outlet that is the opportunity, and the way to capture consumers’ attention.
If you don’t give a reason to shop a retail outlet to consumers, i.e. point of difference, or competitive strength, why should the shopper spend any time in the retail store?
Have we forgotten there are many more options, and food/ beverage alternatives that are eroding grocers’ businesses?
Retailers, do you have the traffic count on a consistent basis, and loyalty level to rely on, “day in and day out”? Hmmmmmm
Why do you think this ‘in-store’ advertising issue exists? The answer sure isn’t the “winning price” game (that will be the most frequent response). It is communicating outside the “four walls”!
And for the other “football field” size retailers, advertising to consumers’ needs just might be a winning proposition… touchdown! Hmmmmmmmmmmmm
Where do advertisers and merchandisers come together? In testing the shopper response to an in-store media effort.
Business intelligence is the key factor in delivering this vital feedback. After the promotional idea is crystallized, you must test it carefully in a few beacon stores.
Analyze the sales uplift, if any, against a well defined control group over a period of a few days. You would be smart to look very closely at the impact of the promotion on margin, cross selling, and customer loyalty. Look at number of items per customer, count the number of high margin customers who bought the promoted item, and capture the number of new customers attracted by the promoted item. What was the impact on your loyal shoppers?
Without a great testing approach and a solid BI system for feedback, in-store media innovations will lead to over dependency on the advertising agency and inconsistent performance. It may even accelerate customer attrition.
I know it’s early in the game, but the Shopper Media dialog will not truly advance understanding until we get some of our concepts, terms and definitions pinned down.
First, let’s stop referring to retail stores as a “channel.” Stores are complex communications environments that house multiple media for brand messages, ranging from product labels to static signs to in-store demos to mobile digital video devices and more. In fact, stores are filled with messaging channels that interact and compete for the shopper’s attention.
Second, defining the value of Shopper Media in terms of Gross Rating Point analogs or equivalents overlooks the considerable experience already accumulated by promotion marketers with regard to lift analyses and other in-store return measures. As noted above, shopper media exposures are stunningly brief and overwhelmingly numerous. Understanding messaging in the store media environment requires that we connect the dots between exposure and action.
Third, because the experience and timing of the in-store media environment is fundamentally different from the at-home, on-line, or even other public media environments, Shopper Media content must be designed to be environment-specific. This means that while they must be coordinated within an integrated media strategy, Shopper Media messages must fit the context in which they are delivered. Mere re-delivery of at-home ad messages on a new screen in-store will likely prove ineffective when real ROI measures are applied.
Laura does well to include Spencer Knisely’s quote above, as it seems to carry great insight. The implication, I think, is that Shopper Media messaging requires new disciplines and skills that are fundamentally different from those traditionally championed by ad agencies. In the end, we’ll be measuring customer take-away, not eyeball flashes.
Seventy-five percent of purchase decisions are made in-store and we are continuing to move from media driven to consumer driven marketing. What does that tell us? It tells us that we need to think about the consumer and we better make it pretty easy for them to figure out what they want in all the store clutter.
It also tells us that Packaging is the new enabler and it really is the “silent salesperson” (or it used to be silent). With P&G and others pushing The First Moment of Truth (FMOT), the importance of packaging has changed across all channels. Media is not effective and consumer choice is all about FMOT – when the consumer sees the product (the package) for the first time on the shelf surrounded by all its competitors!
This is where the rubber hits the road. I say put the focus on the package. Just look at what improved graphics did for Private Label across categories. We just completed a Retail Multiclient Study on retail and packaging – it is truly becoming the new enabler for retail. Packaging enhances performance, taste, convenience, variety, fun, sustainability and many more consumer trends.
Companies that invest in packaging will be the difference makers. Look at what it did for Target – think Method, think Archer Farms, think iPod and think about how packaging is changing the retail landscape. So put the money in the package!
Thank you for bringing up this topic. Around my company, we are having two debates. The first: What happens if Digital Messaging wins? In other words, what if this becomes not only the prime method with which the store communicates to the shopper, but the method that the customer comes to expect, or rely on for factual information about the store’s product or services?
The other side of the coin is the debate of what happens if Digital Messaging loses, or if in the end we all find that it is a tremendous waste of time and money. What comes next?
I have gone to too many digital conferences that are organized by tech companies, scare away retail merchants, and then the tenants run around looking for someone to sell flat screen monitors and content development to. Is this our future?
Early in my career I worked for a real merchant. You wouldn’t know his name, but like so many companies 30 years ago, he had an important role and a voice in company planning. I learned that you never leave the customer asking where the advertised item was. You don’t hide it, but make sure that the promises made to lure the customer into the store are fulfilled quickly and completely. Reasoning was, once satisfied, you build brand trust and the customer spends more time shopping the rest of the store.
This is the creed I live by today, and find that the chasm between agency marketing and in-house merchandising is vast; the perfect place for me to build a bridge.
In reflecting on Laura’s question and much of the commentary, it strikes me that there are a couple of traditional paradigms under attack here.
(Perhaps I see it this way because my own experience is a bit of a microcosm of at least one of those paradigms. The first part of my career was spent focusing on the consumer research, the media plan and, above all, the commercial shoot. The second half has focused on bringing those “classic marketing principles” to the retail environment.)
Traditional paradigm number one is the separation of messaging and message delivery. Agencies develop messages. Media vehicles deliver them. This paradigm began to break down in the digital environment because it is so easy to say “we do it all” with digital content and delivery. It never really existed in the in-store messaging environment (at least from the brand marketer’s perspective) because no one cared what the in-store message was. It’s not that hard to communicate “Buy One – Get One Free” — right?
Now in-store message delivery has the attention of brand marketers (and, therefore, the attention of their agencies). So will we now separate the message development from the message delivery? Or will the in-store vehicles (or retailers themselves) convince the brand marketers that they can create more effective in-store messages than their advertising agencies? Either way, our own definition of “in-store marketing” is “the manifestation of the brand image at retail” and that means integrated messaging is a must.
But that brings us squarely up against paradigm number two — that the marketer has sole control over the message. With only modest regulatory restrictions, most media vehicles have been happy to accept whatever message the brand marketer wanted to deliver. After all, the business of media is to attract and deliver advertising to consumers. That is NOT the primary business of a retailer.
So unlike any “delivery vehicle” marketers have ever met before, retailers are going to care about whether the message fits their environment, reinforces their image and meets their marketing objective for this week in this market in this store.
So here is where the real conflict appears. Who controls the messaging in in-store media vehicles? How will marketers balance their need to “manifest the brand image at retail” with Publix’ need to reinforce the Publix positioning in Atlanta?
This question may not generate the industry interest that new technologies do, but you can bet it will be the question agency account executives will be focused on when they are debating the shift of media dollars from ABC to Wal-mart TV with their brand managers.
Wow, all this talk about metrics and flat screens is exciting – but really missing the mark. The real challenge in the retail landscape is EXECUTION! Right now it is bad, and that must be conquered before the measurements have any validity.
You also need to look at the brands that spend the most money at retail – and that is in grocery, mass and drug, and has nothing to do with flat screens or high tech gadgetry – it’s as simple as getting the display up to coincide with the ad that you bought. Today’s execution of that is around 38-40% – on a good week.
So whatever you are using for a measurement tool, the agencies better be ready to match their numbers up to what is actually executed, not what the store universe is. So therein lies the biggest challenge – how do you measure execution?
Greater understanding can lead to greater productivity when ad agencies and brands hire people with retailing experience, and retailers hire people with ad agency and brand management experience. Ad agencies who only hire people with agency experience and retailers who only hire people with retailing experience prevent diversity. Diverse backgrounds enrich marketing creativity and improve execution. Little is added when everyone comes from the same background.
Those of us who are directly involved with in-store media and the development of its metrics are encouraged by the new digital technology and the desire of brand manufacturers to reach the consumer at the “point of decision” in the store. Together, these developments have created a significant retail footprint of flat screens and digital signage devices across most of the major retail channels.
What remains to be seen, however, is the strength of the consumer proposition, which is inextricably linked to a viable and sustainable business model. If the impetus for in-store messaging is reaching the consumer at the point of decision, measuring incremental sales lift, empirically linked to the messaging, must be possible.
Simply measuring projected GRPs, or “eyeballs” as is the case with media outside the store will not cut it. I mentioned in my comments last week that a number of challenges relating to consumer interaction with in-store media have largely gone unaddressed, as if they are not relevant to the success of this initiative. Nothing could be further from the truth.
Further, if in-store media is to finally become a mainstream option for agencies and/or the brand manufacturers, who buy this medium through those agencies, brands and retailers will ultimately want to see a “media package” tied into to their trade promotion buys. Purchasing an end cap with a “price/item 15 second spot” could make for a powerful consumer message and begin to help solve both the dilemma of trade promotion efficiency and the development of a viable business model for in-store media.
The Tesco study, which indicates shoppers do not spend a lot of time looking at in-store messaging, should be a wake up call. Before we think we have cracked the code on in-store media, we should redouble our efforts to understand the underlying reason why shoppers would even want an already hectic shopping environment “invaded” with yet another message that does not add value to their shopping trip.
Make the video content relevant to the consumer (they are in the process of making “75%” of their buying decisions and want help) and everybody wins.
We operate an in-store TV network in 300+ alcohol beverage retail stores that is highly effective and always measurable. We’re shifting brand decisions and selling new products with short product videos like drink recipes in action (“doesn’t that drink look good? pick up X right now…”). Granted, we are in a highly targeted retail environment where almost 100% of the shoppers are there to buy alcohol beverage products.
However, I think agencies, retailers and others are thinking too hard about finding all the answers and the “metrics” causing a “paralysis by analysis”….
Dive in. Keep the messages simple and relevant and expect to measure your ROI immediately. It’s the power of TV in the store…it works!