FUNNELING THE MESSAGE

DENISE POWER

Retailers have a dizzying array of choices for in-store marketing, and the pressure is high to make the right choice. Time-starved consumers are spending less time on supermarket shopping trips, sources told SN, so in-store marketing must make its mark quickly and effectively.

Many retailers, however, are worried that the proliferation of in-store marketing has caused information overload, confusing customers and diminishing the effectiveness of merchandising efforts overall.

"We underutilize the communications tools we have available," said Bob Spelts, director of advertising at Supervalu, Minneapolis, in an interview earlier this year. "We put up point-of-purchase advertising, for example, but we tend to just let the store sit there.

"We need to give customers a tangible reason to come back next week," Spelts added. "We should remind them to come back Saturday and take advantage of a truckload beef sale. The customer in the store may not have seen that newspaper ad."

One increasingly popular in-store marketing vehicle, interactive electronic kiosks, combines this type of direct customer communication with multiple marketing and promotional opportunities. While some retailers believe the units waste valuable selling space, their supporters are enthusiastic about kiosks' increasing versatility and user-friendliness.

At G&R Felpausch, Hastings, Mich., store kiosks see heavy customer traffic, particularly among the retailer's highest-spending shoppers, according to Jeff Crim, target marketing manager.

"They enjoy it," he said. "My best customers, the top 10%, use the kiosk four times as much as the rest of the customer base. Of those loyal customers, 71% use my kiosks on a regular basis."

About half the shoppers in the next spending tier, the "silver" level comprising 20% of the customer base, use the kiosks frequently, he added.

Several technology developments have made kiosks an integral component of the shopping experience. Touch-screen technology, with its intuitive interface similar to bank automated teller machines, for example, makes the units easy to use unassisted, even for elderly people who may be unfamiliar with the technology.

Multimedia features, including audio, full-motion color graphics and the future ability to produce aromas, allow the units to deliver entertainment value.

Interactivity and kiosks' ability to recognize and greet each customer, as well as respond to certain commands, personalize the experience.

In addition, newer flat-screen technology has given retailers the option of adding kiosk technology without surrendering valuable floor space. Flat-screen computer monitors can be mounted to a wall or pillar, and wired to an unseen computer in the supermarket's back office.

Retailers note that kiosks need to become a destination for significant numbers of shoppers to be effective. The biggest challenge Felpausch faces with kiosks is providing enough varied promotional offers to capture and keep customer interest, Crim said. Although the company does not customize offers to the individual based on his or her shopping patterns, Felpausch does try to ensure its most generous offers are reserved for its best shoppers.

For example, after tracking purchasing patterns among its top customers, the retailer learned that many of them were purchasing laundry detergent from other outlets, presumably warehouse clubs. In response, Felpausch programmed the kiosks to offer those customers an irresistible $2.50 discount on laundry products regularly priced at $2.99.

"So they pay 49 cents for that item," Crim said, "and now it is 83% of our loyal customers buying detergent from us. That's up from 60%."

In-store promotions is perhaps the most popular application today, although retailers are now evaluating kiosks' role in a number of other areas. Among these are:

Targeted marketing. While many kiosks are stand-alone units, others are being integrated with the retailer's point of sale and linked to customer databases. The swipe of a customer-loyalty card at a kiosk can trigger promotional offers customized for that shopper and applied automatically at the POS.

Customer service. Upon arriving at a store, shoppers can place deli and bakery orders in advance, with the kiosk communicating the information to the appropriate store department. Shoppers can later pick up their orders without waiting.

Information resource. Loading a kiosk with information frequently requested by shoppers, such as where departments or specific products are located, is a valued service. Recipes and nutritional information can easily be displayed and printed out for the shopper.

"When customers walk into a store, at some point they are going to need more information or assistance. There needs to be a piece of technology that makes it easier for the customers to have their questions addressed," said one industry observer who tracks kiosk implementations in supermarkets.

"A kiosk can be used to check prices and to record shopper suggestions," he added. "There are a lot of opportunities to touch that customer through technology."

Another customer-oriented kiosk application gaining attention is one that extends beyond the store walls, and involves retailers partnering with third-party service providers, such as banking institutions and utility companies.

In one recent test, a retailer reportedly programmed its kiosk to offer shoppers the option to learn more about electricity deregulation, which offers consumers the opportunity to save on their energy bills because they will be able to purchase electricity competitively. By giving power companies a presence on their kiosks, the retailer earns incremental revenue and consumers learn about new products and services available to them.

Other third-party kiosk applications that bring value to both the retailer and shopper include partnerships with banks, travel agencies and real estate companies.