Influencing Purchases at the Shelf
By George Anderson
With traditional forms of media becoming less effective in generating store traffic and sales, retailers are increasingly looking to their own shelves as a means to influence consumer purchasing.
Tim McKenzie, executive vice president and director of sales and marketing at Vestcom, a manufacturer of shelf tags, told The Associated Press, “You’re in the store. You’re making a decision and they have the last chance to try to influence you to buy their product. It is where the industry is going in terms of trying to redirect advertising dollars to what they call the last three feet of the marketing plan.”
In an effort to make a greater impact at the shelf, Vestcom is developing a small prototype shelf level video monitor system that will show commercials between 10 and 30 seconds in length with the item’s price. The video monitors measure about four inches wide, according to the AP report.
Jack Taylor, a professor of retailing at Birmingham-Southern College in Alabama, sees promise in the Vestcom system although, he cautioned that stores will have to be mindful of going to far with the technology and irritating consumers.
Moderator’s Comment: Do you see opportunities for shelf level video systems to influence consumers’ purchasing decisions? What do you see as the pros
and cons behind such as system? –
George Anderson – Moderator
Coca-Cola did not double its sales – nothing in the universe doubles your sales of a CPG product for any sustainable period of time (like more than a week or two). And we’re not talking interactive media, as in the Behr example – we’re talking television advertising in the aisle.
Turner’s Checkout Channel was never able to show an ROI – I think research is required to see if this is the new thing or another silly idea.
In store radio, signage on the floor, shelf talkers, wiggling pop out signs, and now four inch shelf commercials will attract some retailers interested in tapping the suppliers media budget, some suppliers desperate to attract trade and consumer attention, and of course companies planning to make a buck by providing the devices.
But successful initial results will not be sustained; as participation proliferates the consumer will learn to tune it all out. Shopping is still a chore, and additional distractions are not what the consumer wants or needs.
But if it does work, I guess we will next see cereal boxes touting specific brands of high definition TV’s arrayed on the shelves in Circuit City stores.
Sorry Bernice, but I like it. Provides a little entertainment value in the aisles. If the screens are kept small, the commercials are short and fun, and there are no more than a couple per aisle, why not? These could be great for introducing consumers to new items, and showing consumers how to prepare unique dishes. Why not liven up the shopping experience a little? Consumers might actually walk down some of these aisles again if the videos are good enough.
James Tenser is right on here. However, I think the package itself is the most important in-store media.
“Within months, not years, we will see brave attempts to measure in-store media, further legitimizing the store as a key element in consumer goods marketing campaigns.”
We are already providing very detailed and accurate measures of in-store media based on a second by second accounting of the traffic of millions of shoppers on every square foot of floor space, in relation to every square foot of visible surface, expressed as impressions and GRPs.
Since the early 1990s when the promotion trade association found that 70% of consumers make their decision on choice of brand in the store, there has been an increase in in-store advertising. Haven’t you noticed the end of aisle displays, announcements over the intercom, new posters on the floor, coupon dispensers in the aisles, large promotional displays near the door? There have been experiments using scent dispensers in the aisles, computer chips on products or labels or shelves that play jingles or present product information, LCD displays on cards that are triggered to present specials as consumers go down the aisles, LCD screens that are programmed to display special promotions for consumers when they insert their loyalty cards, and the many stores that have introduced large video display screens. Small video display screens in the aisle are only a new example of a long-standing phenomenon that is growing.
This will likely come as no surprise to anyone but I’m agin it. Vehemently so. Those few shoppers willing to take the time to hang around watching a commercial have huge potential for causing lost sales by other customers who have to move around them or push them to one side to get at what they want to take off the shelf. I’d love to see the research (Hey, Race, I’m talking to you) that convinces anyone of the ROI on such a project.
More useful, from a customer perspective, would be shelf tags that somehow help the shopper connect with the manufacturer or producer. My supermarket uses pictures and mini biographies to do the trick and they don’t take more than a split second to read. It creates something of a bond, in my view, by personalising the relationship between the end user and the person or people behind the scenes.
On-shelf video is one opportunity inside the store, but only one. In fact, there are much deeper opportunities for retailers to build shopper loyalty. Instead of looking for the next magic bullet, like on-shelf video, retailers need to do the hard work of establishing who they are, what value they provide shoppers, and then creating a shopping environment that supports their position. The right environment will include the right collection of products, assorted in the right way, and presented in a manner that improves the shopping process. Every category will have different barriers to sale, and should be addressed with different tools…sometimes video and many times with some other approach. If every retailer defaults to putting video on their shelves, we’ll just have more of the same. Video has great potential, but only if it is integrated as part of a broader store, and category-specific solution.
Here, Here. I agree with James Tenser and for the person asking for the stats, they do exist. This is an emerging concept and has some excellent numbers behind it. Below is part of an article I wrote on this very subject plus the stats as published by Forrester.
“Interactive digital media is a concept based on the premise that 74% of buying decisions are made at the point of purchase thus encouraging the placement of signage, with the intent to sell, as close to the product as possible. Through the strategic placement of media throughout the store location to educate, influence and entertain, customer retention as well as revenue has proven to rise. Studies have shown revenue increases ranging from 30% to over 100% as identified in the following examples:
• Behr paints doubled same store paint sales by implementing interactive kiosks (Behr Paint)
• Coca Cola realized 109% sales increase (Forrester)
“Retention studies have demonstrated an increase from 23% for a traditional TV ad to 63% for in-store media content, leading suppliers to question the value of ad dollar allocation today. With already declining TV ad viewership, in-store interactive digital media is coming of age as an alternative channel for the $153B advertising tool chest of retailers and product producers.
“Retailers can reap the benefits of this new ‘point of purchase’ advertising today through the deployment of digital media end-devices, software to design and schedule the actual media content and support from a well defined secure network with data management and controls.”
This weekend,, I walked through a local Wal-Mart. The impact of the in-store advertising clutter felt unbearable. The TV’s had loud competing advertising and the proliferation of signage was overwhelming. There was no way to quietly think. I assume the employees learn to tune out the clutter and noise or suffer from increased stress. Of course, it’s feasible to install tiny TV screens on the shelves, since cell phones have tiny TV screens. Any store can install advertising on the floor, the ceiling, TVs, audio, shelf talkers, signage, flyers, etc. What will the cumulative effect become? For many, just a noisy busy jumble of stuff to tune out. The best way to tune out? Walk out. So I did.
It will work for some and it won’t for others. There are tremendous opportunities for those who understand their stores as their most effective marketing venue and strategically plan not only how to connect their products with target customers but also build their brands and long term relationships with customers with these types of in store tactics. For some, shelf video will work with their larger plan and, for some, it won’t. Some will use it in fun, interesting, co-ordinated ways that make sense and bring results and some will do it half ass. Some will involve all their people and will leverage this tactic and some will try to get vendors to pay and others to take responsibility. Simply… it would work for those who know how to make marketing in their store work (like, for example, Crate and Barrel – if they chose such a tactic) and for those such as the large supermarket chains (who many of RetailWire responders seem to work for in one way or another, which is not a bad thing but seems to skew some of our discussions) it probably will not work since they are not in the habit of doing these kind of things right.
The value here will be highly correlated to the level of involvement consumers have with the product. The best retail model at the moment is the outdoor superstores, like Cabela’s and Bass Pro Shops. There is a monitor with an instructional or experiential video running in practically every department. And most of them have at least one person stopping by for a moment or two at all times. On the supermarket level, I have noticed that the two monitors getting the most viewer time in my local Jewel are the ones in produce and meat. Of course, the subject matter is fresh food prep, and why not? Think of it as an onsite version of the Food Channel — with instore specials to boot.
This is a great idea, however it probably will not be effective in any large numbers, and should be limited to select locations (endcaps) in the store. Having monitors in shelves with 10-30 second promotional spots is too time-consuming. Customers don’t stop and view the online demo as they walk down an aisle. Instead, they are rapidly scanning hundreds of SKUs every minute for a solution or product. Featured items, placed on end-caps could certainly benefit from this, as well as places in the store where consumers wait (deli, meat counters, etc.) for assistance. The key here is allowing the device to share its message with the consumer, rather than demanding the consumer’s attention. Selectively using these monitors (we have seen the same concept in Costco already) can help drive business on more expensive items in a area where messages are often lost.
I agree retailers have established the POP programs with decent successes and returns. Successful strategies of engagement definitely include in-store promotions and the FMOT is a real mentality. BUT, consumers are constantly bombarded with advertising and marketing messages and, as a result, have developed the ability to “tune out” media communications. The potential here is questionable but I’m sure we’ll find out soon enough.
Bruce hit upon something that we constantly overlook:
positioning the business in the shoppers’ mind better than
the competition.
There is no joy in grocery shopping, and consumers want to
get in and out, as quickly as possible. If giving samples of food and wine tasting doesn’t keep
shoppers in play, what makes you think there will be more
time spent by shoppers to see a video for brand building, and
make a sale right there? And we aren’t talking here about a new product introduction.
Will this fit in creating a positioning for the retailer and,
most important, separate it from competition?
Such video companies want to sell everyone! So what is the
benefit?
The bigger issue is for the retailer to advertise its
positioning benefits vs. competitors down the street.
This builds traffic and leads to sales.
Bruce, again, was right on! If all grocery stores are
basically the same in format and product offerings, no video
for a Brand or store label is the answer.
Any retailer, in any industry, has to advertise its positioning and why its different. This means outside the four
walls of a grocery outlet.
Do we realize how many dollars aren’t filtering through the
supermarket and going elsewhere? The non traditional and
some consumer-centric food groups and family chains are
marketing their way to consumers who will spend on high
profit margin foods, services, and beverages if (IF is so
Big here) they are made aware, and understand the retailer
has more benefits than any type of
competitor. Hmmmmmmmm and Hmmmmm, again.
We’re on the brink of an in-store advertising explosion. Small, shelf-mounted video is just part of a spectrum of offerings that includes large fixed flat panel monitors, in-store audio, cart-mounted video, and an assortment of more familiar static sign networks on the floors, shelves, ceilings and carts of tens of thousands of retail stores.
Vestcom’s new tested shelf video offering is one of a dozen or more in-store channels that are vying for network status within the nation’s retail chains. It’s a market that already adds up to more than $1 B in marketing spending and it’s growing fast.
Within months, not years, we will see brave attempts to measure in-store media, further legitimizing the store as a key element in consumer goods marketing campaigns. Agencies are taking notice too, and inititives like P&G’s First Moment of Truth lend further credence to the proposition that the shelf is where the action is.
“Retail stores are communication environments for brand messages.” I’ve been shouting this for 14 years. Now we seem to be reaching the tipping point. Hang on, it’s going to be an exciting ride.