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Will retail digital media’s growth extend into stores?
With looming changes to cookies set to undermine online targeting, retailers and brands are reconsidering ways to reach consumers in stores.
The attention comes as larger retailers are building massive advertising platforms online in order to take advantage of their access to customer data to personalize ads on their apps and websites. Through programmatic buying, retailers are extending such advertising not only to magazine content and influencer marketing but to digital shelf-edge displays and in-store audio, according to Advertising Age.
“With cookies going away and brands focused on the contextual environment, if you’re a CPG looking to reach a principal grocery shopper, how much more contextually relevant can you get?” Ryan Fuss, senior VP of global media solutions at Stingray, which in January purchased InStore Audio Network, told Ad Age in an article exploring in-store audio.
Kroger in 2020 partnered to automate its audio ad buying process to current programmatic standards, allowing the targeting of in-store shoppers depending on time of day, weather and local events.
“Our associates and customers are our number one priority at Kroger, and this is a new way for us to reach them with more meaningful content,” Cara Pratt, SVP, Kroger Precision Marketing at 84.51, said in a press release. “It allows us to provide them with up to date and timely information on their favorite brands, helping to improve their shopping experience. It also allows our brand partners to reach customers at a pivotal point in the buying process — the shelf.”
According to the Out of Home Advertising Association of America (OAAA), in-store advertising can also include shopping cart panels, above-aisle or end-aisle displays, checkout counter dividers, digital screens, branded clocks and floor graphics. Old-school methods include live product demonstrations and sampling.
In a recent blog entry, L.E.K. Consulting said, for the most part, in-store advertising remains non-programmatic and disconnected from the online advertising businesses. L.E.K.’s entry stated that while merchants often still control in-store advertising as part of the merchandising process, advertisers “are increasingly seeking an integrated omnichannel offering and the ability to more precisely target and optimize placements across ad types.”
- How In-Store Music Can Play A Role In Retail Media Networks – Advertising Age
- Vibenomics Teams Up with Kroger to Help the World’s Largest Brands Reach Customers at the Point-of-Sale – Vibenomics
- In Store Advertising – Out of Home Advertising Association of America (OAAA)
- The Retail Advertising Boom: Time for Retailers and Advertisers To Take Action – L.E.K. Consulting
Discussion Questions
DISCUSSION QUESTIONS: Will retail media’s strong growth online translate into expanded advertising opportunities for brands at the store level? Which existing advertising approaches are most and least disruptive to the in-store shopping experience?
Poll
Loading …BrainTrust
Carol Spieckerman
President, Spieckerman Retail
Lucille DeHart
Principal, MKT Marketing Services/Columbus Consulting
The challenge for in-store media has always been connecting it to actual results. Shelf labels, signs, end cap displays; none are connected to individual shoppers and so any measure of effectiveness is an estimate at best.
There are opportunities for in-store advertising, especially of the digital variety. However retailers need to ensure there is balance. Having an environment where screens are constantly flashing messages to entice you to buy can be extremely annoying and detrimental to the shopping experience.
Despite the common perception that we are inundated with marketing content and swimming in a sea of data, the reality is that the shopping experience is still very much like an Easter Egg hunt. The average shopper still wants a pleasant, successful, and enjoyable shopping experience, which is often not what they get. There are many – still untapped – ways to leverage technology to create an enhanced in-store experience. But the creative team is going to need to do more than just duplicate the TV ad experience on end-caps or digitize the circular to provide real-time coupons.
The simple answer is an absolute yes. I talked about the implications of the rise in retail media networks in my last two podcast episodes, with the most recent mentioning it as part of retailers’ rush to remodels. For the most part, retailers’ remodel plans are far more aggressive than new store launches and some form of in-store digital media is baked into these initiatives. As retailers’ owned media networks gather steam, more trackable digital elements will be integrated into stores and more robust data will result. Even so, retailers are invested in creating consistent, on-brand experiences so there will be a push and pull between taking full advantage of new in-store technology and mitigating confusion and digital clutter. The days of barking endcaps are over.
In the mid-’80s I started a company called Site Based Media. We grew to work with more than 100 stores. We tested the impact on sales of advertising for almost 60 brands. There was a significant uptick not only the brands advertised, but also their competition. Advertise Coke and watch Coke and Pepsi sales go up. In-store prompts work. In the most basic example, if a kid walks the store yelling “Heinz Ketchup,” the retailer will sell more Heinz Ketchup.
In the mid-’80s it was incredibly expensive to install the system and operate the system remotely. But today, the efficiency of installation and operation is about 10 percent of what we faced. This initiative will be a significant success if it is not annoying to the shopper.
I’ve been to this dance before and the song is always the same — websites should not operate like stores and stores should not operate like websites. Acquiring and leveraging consumer data is valuable if it enhances the experience and does not try to create it. Digital signs that change when you walk by, pricing that matches your lowest last search and post-purchase engagement may have a place in the customer journey, but it feels like retailers and brands are trying to create something before it is ready. Encouraging shoppers to download apps to assist them in store has been an initiative for may major brands. I believe that when shoppers are in stores, they engage differently and have more physical requirements; throwing in a touch screen is not a requirement. Regarding retail media and integrated communications across platforms and environments, sure, data can help and will provide a more targeted channel, but I think stores should still operate with a brick-and-mortar first approach.
The notion of retail digital media extending into stores sounds like a good idea in theory. In practice, however, it needs to be done without excess and distraction for shoppers. Most importantly, it has to enhance the in-store shopping experience.
Feels like another “back to the future,” as in, this was done before, differently — but in-store video content is nothing new.
For it to be a consideration as an addition to the store environment, it must be relevant to the shopper both strategically and tactically. The metrics that will determine “relevance” will be key.
There will certainly be retailers that adopt this and others that are hesitant as they feel it may not be “on brand” or promote a poor customer experience (like any other adoption of new technology). However with the right execution this seems like a natural evolution for those that already have an advertising revenue stream to help scale this revenue stream.
For those that don’t already leverage ad revenue, this is certainly going to open more retailers’ minds to the possibility of adding this as a revenue stream.
Yes, I think retail media’s growth will be beneficial for store-level advertising as well. Elaborated customer data is critical for achieving advertising success. Until now, Google ads have made retailers’ lives so much simpler that they haven’t given CDP and related tools much thought. Now that Google is phasing out cookies, retailers will have no choice but to develop their own customer data management systems and collect as much data as possible to provide personalized and quality advertising for customers. Doing this would be critical since tracking KPIs and measuring campaign success will be impossible without enough customer data. Though, one thing to keep in mind is that retailers should not overdo it with expanded advertising strategies; otherwise, customers will perceive it as spooky or spammy.