It's no secret that Center Store lacks the foot traffic and sensory appeal that's become characteristic of the store's perimeter. Now retailers are narrowing the gap with digital media designed to draw customers to, and influence their purchases in, less-frequented areas of the store.
“How do you get that customer to buy more groceries when they're just hitting five sections in the store's perimeter?” asked Carre Dawson, chair of POPAI Digital Signage Group's Advocacy Committee and vice president of Los Angeles-based eVision. POPAI is a trade association for the marketing-at-retail industry. “Digital signage is helping bring customers, and their attention, down these aisles.”
Digital communication networks (DCN) — broadcasting section-specific and sometimes day-parted content from flat panel screens — are engaging customers in Wal-Mart, Kroger and Tesco stores.
“The opportunities presented in-store for influencing customer behaviors are unparalleled,” said George Wishart, global managing director for Nielsen In-Store, a division of the New York-based Nielsen Co. “There are 21 billion retail trips taken each year. Larger retailers [have the opportunity] to reach audiences as large as those influenced by traditional broadcast networks.”
Wal-Mart, for instance, makes 150 million Nielsen-measured impressions every four weeks with the aisle-specific content it broadcasts from six different areas in close to 3,000 stores, according to Mike Quinn, senior vice president of market research and product development for the retailer's network provider, San Francisco-based Premier Retail Networks. That means that of the 400 million customers visiting Wal-Mart stores each month, 150 million watch the Wal-Mart network. The retailer declined SN's request for comment.
“Every month in each of the six departments broadcasting product-focused content, there are six items featured,” Quinn said.
New health and wellness information that incorporates featured items is broadcast in the health and beauty care department, while easy meal solutions can be viewed in the grocery aisles. The fresh food, electronics and apparel sections also feature flat panel screens broadcasting 15-second section-specific spots, each focusing on only one of the section's featured products.
“Our goal is to deliver a succinct reason to buy a product in 15 seconds,” Quinn said. “A manufacturer might have four good reasons to share, but it's better to pick one reason and deliver it to the shopper within that time frame.”
Longer ads run the risk of losing a shopper's attention, while shorter ones might fail to effectively deliver the message.
“It's challenging because, as consumers get from Point A to Point B, you want to engage them but not interrupt them,” Dawson said. “Content also needs to mean something to the consumer in that particular environment. You're not going to broadcast CNN news in the produce section.”
Items featured on Wal-Mart's DCN are usually new, seasonal or related to a larger promotion.
The findings of a recent study performed by PRN at 10 Wal-Mart stores show that sales of a product promoted through the medium can be lifted between 5% and 69% higher than sales of that particular item in a Wal-Mart store that's not equipped with the technology. Still, the medium doesn't make sense for all departments. It had no impact on sales in Wal-Mart's home department, which merchandises higher-ticket items like household appliances and patio furniture.
“Items with the greatest lift were new items promoted with real product news. They did much better than existing items that had been around for a while,” Quinn noted. “The other products that really stood out were those that were seasonal.”
A 40% sales lift was associated with a back-to-school variety pack of snacks that Wal-Mart promoted through its DCN.
“I think the product is about 30 years old, but we reminded the customers, ‘It's back to school time and you should start stocking up on these now,’” Quinn said. “The chip was taken out to show that the product is not just a bag, it contains this gorgeous chip. On the flip side you're not going to see that kind of lift with products that are neither new nor seasonal.”
As part of an effort to further influence sales in Wal-Mart stores, PRN is rolling out 15-inch flat panel screens, called display TVs, to the entire chain over the next three years. The screens will be suspended at eye level on endcap displays in 1,200 locations by the end of this year.
A display TV will be featured on two endcaps in the Center Store section, and one endcap in the household cleaning, pharmacy and HBC sections.
“We decided to install two display TVs in the dry grocery departments just because it's such a huge section and there is so much product innovation going on,” Quinn said. “We looked back on all of the new items introduced in 2006 and realized that only one endcap TV in the section would limit us to featuring 12 products [during the year]. We determined that there were at least 20 exciting things to talk about in dry groceries each year.”
Every four weeks Wal-Mart will select the items featured on the endcaps, and PRN will work with the manufacturer to create the programming best suited to educate shoppers about those items.
Consumers shopping at Cincinnati, Ohio-based Kroger stores will also soon see and hear content broadcast from 15-inch LCD screens suspended at eye level, according to Robert Wolf, executive vice president of research for the In-store Broadcasting Network (IBN), Salt Lake City, which distributes audio and video advertising to retailers.
Kroger didn't respond to SN's request for comment.
IBN will begin installing the screens, which will be attached to a foam-encased hinge that allows them to hang perpendicularly from the shelf, in 95 Houston-area locations in March. The smaller screens will eventually be installed in the snack, beverage and cereal aisles in all Kroger stores. Larger flat screens suspended 7 feet in the air once broadcast content in those aisles.
“The 15-inch screens are twice as effective as the larger ones,” Wolf said. “We did a lot of research and found that screens suspended way up in the air get ignored because people in the store are focusing on what they need to get done. If the screen isn't at your eye level, you won't notice it. These allow us to broadcast the content where the brands are.”
Drawing shoppers to less-frequented areas of the store is another objective of IBN's Perfect-Media network that's leveraged in Kroger stores.
“We designed an in-store network with channels that match the way shoppers move,” Wolf explained. “Most shoppers enter the right side of the store and shop counterclockwise, using the perimeter to navigate their path.”
In addition to broadcasting ads that help brand the retailer, IBN's perimeter channel features what Wolf describes as hints about products that can be found in the aisles.
“You wouldn't see an advertisement for Pepsi on the perimeter channel,” Wolf noted.
Instead, shoppers might see video of a person opening a bag of Doritos.
“It's not an advertisement but it might cue a person to think, ‘I'd like to visit the snack aisle and get some Doritos,’” Wolf explained.
The channel that's broadcast in Kroger's checkout area is also used to promote less-frequented sections of the store.
“Many stores have pharmacies and they're typically underused, so we'll broadcast an ad that tells customers, ‘You trust Kroger for your food, so why not try our pharmacy the next time you come to the store,'” Wolf said.
Kroger stores also feature aisle-specific channels in snack, cereal, carbonated beverage, dairy, household cleaning and pharmacy departments.
IBN sells exclusive sponsorships for each of these channels to a single supplier.
“The charter member of the carbonated drink aisle channel is Pepsi, so you'd see a lot of content related to Pepsi broadcast there,” Wolf said.
Kroger receives a portion of the advertising revenue generated from these sponsorships, but since IBN foots the bill for the technology required for the network, Kroger's share isn't as substantial as it could be.
“We paid the capital expenditure so they get a relatively lower revenue share,” Wolf said. “We have other relationships where the retailer put forth the technology investment so that increases the share of revenue they'll derive.”
Quinn declined to share details of PRN's arrangement with Wal-Mart.
No matter a retailer's financial relationship with its in-store network provider, maintaining content control is of critical importance, Dawson noted.
“It's a catch-22 because if the retailer doesn't put out the dollars, the provider can dictate a portion of what the content will be,” she explained. “Chains can't afford to push any more customers away, so content is critical. Approaching these deals with the attitude that shoppers are just aggregated eyeballs that retailers can make a few dollars off of is the wrong way to go.”
In-store merchandising media, including television, radio, shelf-talkers, digital signage and other point-of-purchase displays, collectively comprise the sixth-largest advertising vehicle in the U.S. and were the source of $18.6 billion in spending in 2005.
Last year, the Skokie, Ill.-based In-Store Marketing Institute formed a consortium to determine if it could develop a way to measure consumer exposure to these in-store media.
Retailers including Albertsons, Kroger, Walgreens, Wal-Mart and members of the supplier community, such as Coca-Cola, 3M, Kellogg's, Miller Brewing, Proctor & Gamble and The Walt Disney Co., took part in the effort, called “Pioneering Research for an In-Store Metric,” or PRISM.
A 10-store PRISM pilot was conducted early last year and included about 60 brands, according to George Wishart, global managing director of Nielsen In-Store, a division of the New York-based Nielsen Co.
“First, store traffic was analyzed to determine who was in the store, followed by what was in the store,” he said. “For instance, if there was radio, television and/or shelf talkers. Then, they tried to determine how much duplication of exposure to a particular message existed, whether it be from multiple visits to one store or if a customer received the same message at Albertsons as they did at Wal-Mart.”
In December, the Nielsen Co., formerly called VNU, formed a partnership with the In-Store Marketing Institute with the hopes of launching a syndicated global measurement service, that would build on the findings of the PRISM pilot and provide retailers with both aggregated and store-specific information relating to consumer exposure.
“The service will help retailers decide how to best spend their money when it comes to getting messages out to consumers, in-store,” Wishart noted. “It will help them answer questions about which in-store tools are most effective when it comes to communicating to their particular consumers, and which messages are the right ones to engage and convert a person from a shopper to a buyer.”
The Nielsen Co. and In-Store Marketing Institute are forming a consortium for a new test that will be launched in May.
“The whole objective of the first test was to find out whether or not we could determine the audience of a particular store, and we found that it can be done,” Wishart said. “Now the trick is to scale the findings of the original test that only included 10 stores to 34,000 stores.” The results will be published in the third quarter of this year, and the global measurement service will be launched in 2008.