Platt Retail Institute: Digital Signage – Many Factors Influence In-Store Purchase Decisions

Discussion
Feb 24, 2009

Editorial by Steven Keith Platt,
Director and Research Fellow, Platt Retail Institute

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?

Please practice The RetailWire Golden Rule when submitting your comments.

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14 Comments on "Platt Retail Institute: Digital Signage – Many Factors Influence In-Store Purchase Decisions"


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Steve Montgomery
Guest
13 years 3 months ago

I support the comments on de-signing stores. We work primarily in smaller formats and there is a strong tendency to over sign the sites. When confronted with too much signage, the customers see none of it.

That being said we have found digital in-store media to be effective when part of an overall signage strategy. Its effectiveness depends on all those things that make any media impactful. A common example of where it is not is when the digital screen is at the checkout area and is advertising items displayed at the back of the store.

Camille P. Schuster, Ph.D.
Guest
13 years 3 months ago

In a study done 4 years ago at a sports store, consumers (18-24) watched digital signage messages for about 5-7 seconds. Sales at the store increased slightly.

Ian Percy
Guest
13 years 3 months ago
First let me get a small peeve out of the way. There is no point to listing influence categories like “Trip type, “Family size;” “Age,” or even “Gender” without giving us the correlations and direction of the influence. OK…how about some woo woo stuff? Somewhere deep in their subconscious every person going into a store wants to buy something. On a quantum level there is no such thing as “just looking.” In other words a ‘buy energy’ is already at play in the universe and it will be collapsed into a profitable reality UNLESS the retail store and its salespeople do something to stop it. Rather than thinking we have to create the buying urge as this article says, why don’t we look at how we put up barriers to the urge that’s naturally there. Health is a good metaphor for what I’m suggesting. Our bodies are made to run perfectly…until we do stupid things to muck them up. Our environment is designed to be sustainable…until we do stupid things to muck it up. The… Read more »
Anne Howe
Guest
13 years 3 months ago

Why are we still talking about data from a study conducted on shopper behavior in 1995? Babies born in 1995 are now about to be 14 years old, entering high school. As an industry, we need to move beyond the theory that “one size fits all stats” are relevant, period. And we need to accept that shopper behavior is complex, emotional and varies widely. In my 18 years in shopper marketing, I’ve not yet met a client who would make a decision based on these kind of findings alone. Nor do I know any clients who would attribute success in “impulse buying” to just one tactic, such as digital marketing. Getting to the heart of the impulse purchase behavior in any category requires diligent research as well as the art of cultural consumer understanding.

Ryan Mathews
Guest
13 years 3 months ago

I’m in Ian’s camp on this one. I’d start de-signing most stores and reconfiguring a more appropriate environment. In most stores there are too many signs, too much messaging and too little actual nurturing of nascent spending behaviors.

Dick Seesel
Guest
13 years 3 months ago

I don’t think there is a “one size fits all” answer to this question. Clearly the decision-making leading to a purchase depends on the type of category and retailer. The use of in-store signage pertains to categories like groceries where most of the decision-making is limited in nature and the retailer has a chance to capture impulse purchases. But for categories requiring more decision-making and a less habitual approach (consumer electronics, for example) there is a much smaller than 70% chance of a “snap decision” in-store.

There is still opportunity for add-on sales with big-ticket items like TV’s and computers with creative use of in-store signage (digital or not), but the best chance of adding to the shopping basket in this case is the “suggestion selling” of a good sales professional.

Paula Rosenblum
Guest
13 years 3 months ago

I must be confused, but it seems to me that the correlation between number of aisles shopped and total purchases is not particularly interesting or meaningful.

By definition, the more you’re planning to buy in a supermarket, the more aisles you will have to walk down to find what you want to buy. I suppose the opportunity for impulse buys is greater the more aisles one walks down, but the direct cause-effect relationship is completely lost on me.

Herb Sorensen, Ph.D.
Guest
13 years 3 months ago
“For instance, the most important influence on in-store purchase decisions was found to be the number of aisles shopped.” This is just SO WRONG in its chicken and egg implications. Very obviously, people who buy a very large number of items probably do so by visiting a lot of the store. Duh! But the idea of “forcing” shoppers to visit a lot of the store, when they really only want to buy a few items, in the hopes that they will buy a lot, is actually killing a lot of retail sales. It kills sales because over time, with tens of thousands of shopping trips, it SLOWS the purchase process tremendously. The longer it takes you to close a sale on a single item, the less time you have to close a sale on the next item. You may have plenty of store for the shopper, but they have a very limited amount of time FOR YOU. The shopper’s time is a more important asset for the retailer than is the size of their store,… Read more »
Joan Treistman
Guest
13 years 3 months ago

Note the inference from the article is unplanned product purchases…in contrast with unplanned brand purchases. My research suggests there can be great in-store opportunities for moving consumers to “unplanned” brands. Next, the article doesn’t talk about whether the consumer is in front of the snack display or cough/cold remedies…a big difference when the purchase decision process is under scrutiny. Snacks are selected quickly. Cold remedy decisions are more deliberate and take longer (want to make sure I get something that will treat ALL my symptoms) and therefore more brands are considered and can break through. Like everything else in this marketing world of ours…context can make all the difference.

James Tenser
Guest
13 years 3 months ago
I must say I’m strongly in Herb’s corner on this discussion. Let me amplify a little: First, in the most literal sense, 100% of purchase decisions are made in the store. In know I’m being glib here, but let’s carry this notion a bit further. It’s just as true that a very large majority of purchase decisions are somehow influenced by messaging or shopper experiences that take place prior to the shopping trip. Impulse happens, but pure impulse (selecting a product completely outside one’s intent) is exceedingly rare. So it follows that messaging in the store can influence shoppers when choosing between items that are substitutable in some way and in a desired category. It also follows that messaging may remind shoppers to take home items they may have forgotten they wanted. To do either, the message must succeed in penetrating and influencing the consciousness of a shopper who is task-focused and time-pressed. In-store digital signs appear to succeed (a little) by turning up the volume and frequency of the in-store messaging environment. But they… Read more »
Anne Bieler
Guest
Anne Bieler
13 years 3 months ago

While there has been a lot of discussion about “impulse buying,” making the sale still depends on making the shopper connection. Many retailers are looking at the obstacles to purchase. Improving shopability, customer service, store experience, and communication of the value proposition keep shoppers loyal.

Think carefully about the purpose and placement of new signage for busy shoppers sorting through thousands of SKUs. Customers in the store are on a shopping mission–helping them achieve their goals quickly and painlessly should be the starting point.

Kai Clarke
Guest
13 years 3 months ago

For this information to be of any use, why didn’t the authors compare digital signage to non-digital signage? Why wouldn’t this type of comparison better determine the impact of digital signage?

As we examine digital signage, perhaps some of the better questions which need to be addressed are their impact on purchasing decisions contrary to product placement, pricing, in-store promotion, and product packaging. These are generally the key indicators that drive a product’s sales at the shelf. How digital signage impacts these is perhaps the most important information that should be addressed.

Mark Lilien
Guest
13 years 2 months ago

Most digital signage is implemented so poorly that it probably does more damage than good. It doesn’t sell anything when it’s in the cashier aisle. Too late, folks. It doesn’t sell anything if it has 5 to 10 minute “TV programs” ’cause shoppers won’t stand still for 5 minutes to watch anything you’re going to show. It doesn’t sell anything if it has to compete with 3 other blaring screens nearby. And don’t say you’re “building the brand.” That just means you can’t prove anyone bought anything from it.

vinay purbia
Guest
vinay purbia
13 years 2 months ago

A sign in a store is the primary asset of the strategy that you are perceiving for igniting unplanned purchases but the thing that results into positive outcomes is that the signs should be planned as per the audience of the store. In a country like India where sometimes cultural & traditional touch pulls the maximum unplanned purchases, a sign well prepared in local language attracts the customer and the in-store media should also be planned on the basis of the audience.

In my store, most of the signage is in the local language which works more effectively.

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