RETAIL MARKETING 1998-05-18

MAUREEN TONN

Interactive kiosks, stand-alone video screens and even flashing lights on in-aisle coupon dispensers have proven their power to capture customers' attention in stores.

Retailers are leveraging these and other in-store communication vehicles, however, to do a lot more than highlight weekly specials.

Savvy retailers are employing related signage in different parts of the store to, for example, spur meal solution sales without having to physically group products together. And while opinion is divided on the value of in-store kiosks, some retailers are using them to target their best customers, maintain excitement during multiweek promotions and provide additional promotion for peripheral departments.

In-store media do not have to employ technology to be creative, sources told SN. Floor graphics, for example, have produced significant sales increases for products they point customers to. Even in-store audio, when used to announce fresh bread at the bakery, can create customer excitement.

The key to any kind of in-store advertising is quality rather than quantity, said Buddy Martensen, director of advertising services at Fleming Cos., Oklahoma City. "Every shelf is loaded with advertising," he said. "Every box is an ad, so the store can look very cluttered. There is no magic bullet that cuts through the clutter."

Signage, kiosks or audio announcements all can be effective "if used properly," he added.

In-store signage was cited by retailers as the single most effective tool for making an impression on customers, and technology is playing a role here as well. Lower prices for computer graphics software and printers allow stores to produce colorful, store-specific signs themselves, rather than rely on a chain's centralized advertising department.

Hy-Vee, West Des Moines, Iowa, uses computers to produce more professional-looking signs in its stores, said Ruth Mitchell, assistant vice president of communications. "It's one of the biggest changes we've seen from technology," she said. "A few of our stores are experimenting with CD-ROM-based software so they can put four-color photos of, for example, produce on their signs."

The money for printers and software is well spent, Mitchell said, because in-store advertising "is one of the most cost-effective kinds. It reaches the consumer right when he or she is making a buying decision."

Having printers in-store affords retailers the flexibility to change their signage at will. "The signs can be changed daily, if needed, to reflect something hot going on," she added.

Signage that combines a manufacturer's brand message with store-specific information, including the product price and the retailer's logo, is reportedly being provided to more than 1,000 retail locations by a third-party company. The retailer maintains control of key elements of the signs' design so they fit in with each store's overall "look," according to a source familiar with the situation.

In-store media can also be used to promote solution selling. Sources told SN a retailer could use a number of signs to promote chicken marsala without having to physically stock the ingredients together. A large sign suspended from the ceiling would suggest the dish for dinner, while smaller signs in the produce and meat departments would remind customers to pick up mushrooms and chicken.

One retailer gave this idea an electronic facelift when he used video screens to cross promote a frying pan and beef in the general merchandise and meat departments.

Another cross promotion concept is stickers, similar to the price look-up stickers used on produce, promoting either related products or an event such as a major video release. Stickers promoting salad dressing could be placed on lettuce, beer on limes or breakfast cereal on bananas, according to a source.

Some retailers are extremely enthusiastic about kiosks as an in-store medium. G&R Felpausch Co., Hastings, Mich., employs electronic kiosks to provide customers with meal solutions in the form of themed coupons. "About 71% of customers use the machines on a regular basis, on average three times per month," said Jeff Crim, target marketing manager at Felpausch.

The retailer uses the kiosks, which it installed last June, to offer its best customers up to 40% discounts on their favorite brands, Crim said. "There are huge gains to be made in targeting to customers you already have," he noted. "Some of the coupons are being redeemed at a 75% rate."

The kiosks helped Felpausch maintain customer interest during a recent 11-week ham program. The retailer established 10 different spending levels, and members of its customer-loyalty program could use the kiosks to learn how many certificates they had earned toward discounts on hams.

Heavy signage throughout the stores encouraged customers to use their cards and helped avoid the usual mid-program slump. "[Programs] lose their luster midway through," Crim noted. "But there was a 20% increase in the number of households who qualified this year," compared with last year's program.

When the kiosks sit idle, screen savers promote new releases at Felpausch's video department as well as upcoming community events. "We probably get another 100,000 hits a week for these things in this way," Crim said.

While Felpausch has achieved strong results with its in-store kiosks, many in the industry remain skeptical about their value. Bob Spelts, director of advertising at Supervalu, Minneapolis, said he has yet to find a satisfactory kiosk system.

"We haven't seen one yet that works well," he said. "The problem is that the limited number of machines typically placed in stores don't support getting the customer in and out. But we are exploring a couple of things right now.

"We underutilize the communications tools we have available," Spelts added.

Floor graphics in Dick's IGA stores, River Falls, Wis.,"are the single most effective thing we've done in the past eight to 10 years,"said Dick Rinehart, president of Dick's IGA. He pointed to sales increases ranging from 5% to 25% when floor graphics spotlighted a product. "They're the sleeping giants of advertising."

Rinehart is also considering placing product images or promotional messages on his stores' point-of-sale system monitors.

Despite the numerous options already available, sources told SN they are always on the lookout for the next "magic bullet." Devices that emit the aroma of home-baked cookies from an on-shelf vent system, for example, or full wall displays of video screens are possibilities for in-store media. Said Martensen, "If there's an advertising medium out there, supermarkets will try it."