Platt Retail Institute: Digital Signage - Many Factors Influence In-Store Purchase Decisions
Through a special arrangement, presented here for discussion is an excerpt of a current article from the Platt Retail Institute Quarterly Retail Analytics report.
It has long been stated that "70 percent of purchase decisions are made in the store." Thinking more about this caused me to embark on a journey to trace the accuracy of the "70 percent Rule," and the implications for in-store digital signage.
As it turns out, the most often-cited support for the 70 percent Rule is a 1995 study by Dr. J. Jeffrey Inman and Dr. Russell S. Winer. Their research advanced a four-stage model for in-store decision-making, and the factors and relative importance thereof on the consumer impact of unplanned in-store purchases. From this model, the researchers performed an analysis and ranking of the strength of influence of the noted factors.
In the following chart we present the results, which rank from most to least the relative factors' impact on consumer in-store purchase decision-making
This indicates that the number of aisles shopped, trip type, and deal proneness are more important factors influencing in-store purchase decision-making than, for example, the use of a shopping list or a simply display. These findings are significant when considering digital signage as an in-store medium. This is because digital signage is unique in its ability to leverage many of these factors into tailored messages to convert shoppers into buyers. Stated another way, digital signage content can easily be geared to impact those factors found to have the most effect in consumer in-store decision-making.
For instance, the most important influence on in-store purchase decisions was found to be the number of aisles shopped. Thus, creative content geared toward encouraging consumers to visit more parts of the store can increase retail sales. To illustrate, an ad that introduces, "Buy peanut butter here, and get 50 percent off jelly located in Aisle 21," may be an effective way to augment the number of aisles shopped. If this content is not, in fact, producing the desired result, it can easily and quickly be altered to find the most effective messages.
Retailers should run content that most effectively impacts consumer in-store decision-making to increase sales. A fill-in shopping trip can be converted to a more lucrative trip by, for example, by targeting promotional messaging to areas of a store where consumers tend to make fill-in visits, such as the milk area. Such pinpointed messages can have an outsized influence on sales.
Discussion Questions: What do you think of the potential of in-store signage as a driver of unplanned purchases? What are some key drivers of spontaneous purchases and what are some ways digital signage be used to trigger those drivers?