Sign of the Times

CAROL ANGRISANI

Let's say Wal-Mart Stores wants to sell more carbonated soft drinks. When the temperature outside of one, several or even thousands of its stores tops 70 degrees, a television screen on an endcap near the CSD aisle can be programmed to advertise a thirst-quenching bottle of Coke.

That's just the beginning of how the new Wal-Mart Smart Network can be used to get the right message to the right consumer at the right time.

“Our main goal is for suppliers to highlight products that are most relevant to shoppers,” Wal-Mart spokeswoman Linda Blakley told SN. “These products can be seasonal, offer a new or unique benefit to the shopper, or simply be a key item offered at an unbeatable price.”

The new network will allow Wal-Mart to monitor and control more than 27,000 screens in more than 2,700 stores across the country. This means content can be customized by store, screen and time of day.

So, say it rains outside: Wal-Mart can post a message about umbrellas on sale.

“The Wal-Mart Smart Network allows us to provide relevant information to our customers,” said Blakley. “It is a meaningful way to connect for the brands and improves the effectiveness of the network for Wal-Mart, by providing a real-time understanding of what is being advertised and what is moving in our stores.”

The Smart Network started rolling out this month and will be in place in 300 stores by the 2008 holiday season. Installations will be complete in the rest of the 2,700 stores by early 2010.

Each store will have about 10 screens, including two at the front entrances, five on endcap displays, and two to three in the grocery and health and beauty care aisles.

Procter & Gamble, Kellogg's, GlaxoSmithKline and Reckitt Benckiser are among about eight initial advertisers. More vendors are expected to join as the system grows, according to Richard Fisher, president of PRN, the San Francisco digital solutions provider that operates the network and sells ad space.

The Smart Network benefits vendors because they can send targeted messages, and also analyze sales data to see if sales increased, decreased or stayed the same in response to an ad, Fisher said.

“Vendors can reinforce their brand at different parts of the store and drive shoppers to a particular product,” he said.

Kellogg's got on board after being impressed with the results of Smart Network tests.

“I believe moving forward, advertising at the point of sale will become increasingly important to win the market,” Kim Miller, vice president of marketing at Kellogg's, said in a statement.

PRN's Fisher described the Smart Network as a first for in-store media.

“This is dramatically different than anything done in-store,” Fisher said. “It's just as dramatic as the leap from analog to digital.”

The screens will replace the current Wal-Mart TV system, according to Fisher.

While the Wal-Mart network is one of the most advanced in-store media programs, many other in-store media technologies are being used or piloted to reach consumers at the store, where 70% of purchase decisions are made.

For the past year, Stop & Shop has been using handheld scanners that transmit targeted marketing messages. Called Scan It, the system is in place in about 100 stores. About 6% to 7% of Stop & Shop's shoppers, representing 11% of sales, use it.

A Stop & Shop spokesman was unavailable for comment.

When shoppers walk into the store, they go to a display containing the handheld scanners. They swipe their loyalty card, fill their cart with empty bags and begin shopping.

As customers select an item, they scan its bar code and place the item in the shopping bag.

With the help of the loyalty card data, the system tracks 65 weeks of sales data.

Targeted offers and advertisements are delivered in real time based on past, present and anticipated buying choices.

“We can pair sales data with what a [CPG] company wants to do, such as attract a new customer, increase purchases of existing customers or some other function,” said Paul Schaut, chairman and chief executive officer, ModivMedia, Quincy, Mass., the retail media company that provides the scanner platform.

Say, for instance, P&G wants to target a shopper who does not buy any of its detergents. It may send that shopper a $1 coupon for “all” laundry detergent via the scanner. But P&G can also entice existing shoppers to make additional purchases by sending out a buy-one, get-one-half-off coupon.

Ads are location-triggered, meaning a customer will get a laundry detergent ad when they are in the detergent aisle.

Scan It currently has about 150 offers for about 40 brands, including Dannon, Clorox, Tetley, Frito-Lay and Healthy Choice. Offers have a 25% redemption rate, according to Schaut. He attributes that to the fact that the ads are targeted to reach the people most likely to respond to them.

“Since up to 70% of decisions are made in the aisle, it's important to present a targeted, relevant message while shoppers are in-aisle,” he said.

Cell phones are another form of in-store media being tested at food retailers.

Infosys Technologies in Fremont, Calif., has several pilots in the works with manufacturers and retailers, involving personal cell phones and permission-based real-time marketing messages.

Once they enter the store, consumers get a special shopping cart and key the cart's number into their cell phone.

Shoppers can download a recipe from the Internet and retrieve it on their cell phone in the store when shopping.

Based on where the shopping cart is located in the store, the shopper will see different portions of her shopping list. For instance, in dry grocery, the grocery items she needs can be viewed.

“This provides a more convenient shopping experience,” said Sandeep Dadlani, Infosys Technologies' vice president.

Users can opt-in to receive additional messages, such as in-store specials, recipes and complementary items. For instance, if a barbecued chicken recipe is requested, the user may get a message about the right type of wine that goes with it. Personalized promotional offers that can be redeemed electronically are also presented.

“It's a great tool for CPG companies to make cross-sell opportunities,” said Dadlani.

The technology includes a network of wireless sensors that detect the presence or absence of product on a shelf, how many facings remain on the shelf and how many shoppers stopped to look at the product.

“People don't have to wait for [RFID] to be manageable or affordable enough to do these kinds of things in-store,” Dadlani said.

Infosys also offers “heat maps” to track the movement of shopping carts within a store and provide such insights as shopper concentrations and cart paths.

“This gives grocers the ability to interact with shoppers via their cell phone based on where they are and what products they're considering buying,” he said.

The system is being piloted in about 12 stores globally, including one retailer in North America. Dadlani declined to name the companies involved, except to say there will be an official rollout in about six months.

Along with communicating with shoppers via television screens and cell phones, retailers are also using shopping carts to create a dialogue.

MediaCart Holdings has piloted computerized shopping carts with video screens at Wakefern Corp.'s ShopRite banner.

Once a shopper scans her loyalty card on the cart, she receives ads and promotional offers based on past purchases. She also can upload her shopping list via her home computer and call it up in the store via the cart.

The carts also show shoppers where products are located in the store; offer price checks and recipes; and provide nutritional information. They can even total the cost of the basket before checkout.

A ShopRite spokeswoman was unavailable for comment.

Shoppers who use MediaCarts have average shopping baskets that are about 8% larger than those who don't, according to Rudy Prince, the company's chief operating officer.

Prince said that because of the promotional messages and shopping lists they receive, MediaCart users are making more impulse buys and are purchasing products they otherwise might have forgotten, resulting in the larger basket.

P&G, Nestlé and Kraft are among the marketers that have advertised their products to shoppers on MediaCart.

“Because we have their prior shopping history, we can target by location or time of day,” Prince said.

70%
Approximate amount of brand purchase decisions made within the store.
Source: Point of Purchase Advertising Institute