Will in-store media transform retail spaces?

Articles
January 21, 2009

CPG manufacturers and retailers increasingly eye the selling floor as the most effective place to message shoppers in targeted ways at opportune times. Why not? Traditional mass media has fragmented. Consumers have long been able to Tivo commercials out of their TV-watching experiences. They’re mobile, to say the least (and cell phones will be a hot communications frontier for brands). They use many alternative sources for information. So where is it best to capture them? “Everybody has to shop, so the store is the last place where mass marketing exists,” says George Wishart, global managing director of Nielsen In-Store. “Even better, you are reaching people who are declared shoppers. They’re there for a purpose.” His comments appear in a new White Paper, “Major Media in the Shopping Aisle,” from the Booz & Co. consultancy. The document declares: “In-store advertising will transform the retail environment.”

CPG manufacturers and retailers increasingly eye the selling floor as the most effective place to message shoppers in targeted ways at opportune times.

Why not? Traditional mass media has fragmented. Consumers have long been able to Tivo commercials out of their TV-watching experiences. They’re mobile, to say the least (and cell phones will be a hot communications frontier for brands). They use many alternative sources for information.

So where is it best to capture them? “Everybody has to shop, so the store is the last place where mass marketing exists,” says George Wishart, global managing director of Nielsen In-Store. “Even better, you are reaching people who are declared shoppers. They’re there for a purpose.”

His comments appear in a new White Paper, “Major Media in the Shopping Aisle,” from the Booz & Co. consultancy.  The document declares: “In-store advertising will transform the retail environment.”

While ad spend in traditional media (TV, newspapers, magazines, radio) grew less than 2% a year in 2006 and 2007, the online ad spend grew (on a far smaller base) 20% annually in those years. Web ad spend is already larger than cable TV or radio, the report adds, noting “this shift reflects marketers’ desire for greater targeting, interaction with consumers and measurability—all qualities offered by in-store media.”

Although retail-store media is currently just a $500 million annual business, some
46% of CPG marketing executives plan to increase their investment in it over the next two years, according to findings of a 2007 survey conducted by Booz, DemandTec and Trade Promotion Management Associates.

Brand messages will take many forms, some of which are already live. Video ads will target specific shoppers, based on where they are in the store, time of day, and the promotions on nearby displays. Shopping carts will respond to items taken from shelves, suggest companion purchases, tell shoppers of related promotions, generate coupons and keep a running tab. They can also create individualized shopping lists for frequent cardholders who’ve made a list before, as well as recipes that make meal planning and shopping more efficient.

With Walmart already moving ahead with Internet Protocol TV (The Walmart Smart Network will be in 2,700 stores, in partnership with Premier Retail Networks), CPG will be paying close attention to how it impacts sales. In some categories that tend to perplex shoppers, credible video content might actually be welcome.

The keys to success, believes SupermarketGuru.com, go beyond performance fundamentals such as the right metrics and analysis. To win at this will require sophisticated engagement of shoppers when they are mission-oriented, time-short and ready to move on. Messages will need to be entertaining, educational and gently persuasive in order to keep shoppers paying attention rather than ignoring them as clutter in the retail environment.