SIGN OF THE TIMES 2002

JOHN KAROLEFSKI

To sign or not to sign?

Advertising signage inside supermarkets has always been a double-edged sword. Its advocates say that floor decals and signs on the shelf and attached to point-of-purchase displays help brands cut through the clutter. They inject excitement and color -- as well as information -- into the shopping experience. But critics claim that too many signs can easily become store clutter, annoying consumers and drawing attention away from brands on the shelf.

As a result, determining the right amount of ad signage is a challenge for merchandisers who orchestrate the in-store environment of their supermarkets.

"You can overdo it," said Tony Gasparro, vice president of advertising for A&P's Atlantic region. "If consumers had to read every sign in some of these stores, you'd have to give them pajamas and a blanket. They'd be in there a long time."

Such an attitude has prompted some retailers to install a "clean-store" policy -- that is, no decals on floors or ads on the shelf, and limited use of POP displays with signs attached. Basically, these retailers don't want to over-commercialize their stores and contribute to sensory overload.

"The use of signage becomes too much when it is not part of an integrated plan. It can overwhelm the store environment and create a cacophony of images that decreases browsing and purchasing," said Rick De Herder, president and chief executive officer, Array Marketing Group, a Los Angeles-based firm that provides in-store marketing strategy and solutions to retailers and manufacturers.

In practical terms, the motivation for a clean store results from "a combination of reducing clutter and perhaps reducing labor hours to put up, take down and clean up the signage," pointed out Jim Garrison, president of the Dallas-based Piggly Wiggly Co.

"Every retailer has to balance the benefits of a clean store with the value to be added and sales lift to be gained from in-store signage and displays," said De Herder. "A clean store can make merchandise presentations appear uncluttered, but they also can starve the consumer for information and lead to 'lost stores' because of an environment that feels sterile and antiseptic -- the antithesis of the excitement we all crave when we shop."

Some industry observers speculate that it's this generally accepted need to make shopping exciting that accounts for more aggressive marketing nowadays by vendors of in-store signage. And while there aren't any national statistics available, anecdotal evidence from supermarket executives and marketing consultants suggests that the use of ad signage is growing in supermarkets.

Piggy Wiggly's Garrison said there's more signage in supermarkets than ever before because there's more competition among brands and more retail formats where consumers can buy groceries. "Everyone continues to struggle for sales," he said.

Other executives say that the fragmentation of mass media has prompted makers of consumer packaged goods to divert their marketing dollars to in-store advertising.

"There isn't a mass media any longer. Consequently, in-store advertising becomes very important," explained Andy Edelman, a consultant and former chairman of the board of Point-of-Purchase Advertising International, New York.

Proponents of a first-rate signage program say the benefits include enhanced brand awareness, increased sales and trade promotion revenue earned from sign placements. Also, signage can effectively tie into local and national promotions, further boosting brand awareness and impulse sales.

Recent research has quantified the lift that in-store advertising gives to brand and category sales. Initial results from the study, "In-Store Advertising Becomes a Measured Medium," show that POP advertising generated incremental sales ranging from 2% to 65% in supermarkets. The study, conducted by POPAI with the Advertising Research Foundation, encompassed 250 stores, including independents and the Top 15 supermarket chains in 22 different cities. It covered 94 brands in eight product categories. Gasparro of A&P said, "We have increased our point of sale, and it has helped us increase our customer sales per transaction. Point of sale is an integral part of our overall merchandising program.

"What consumers are looking for are items at reduced retail, information that indicates what the unit price is, the variety that's on sale, and the length of a promotion. That's what our point-of-sale program does. By category, we select items that bring a customer throughout the entire store. We call it the Path to Success. We want to bring those consumers through the store, using point of sale as a guide to increase our sales per transaction with that consumer."

Signs bring displays to life and attract shoppers, according to Stan Sorkin of Alpha One Marketing, White Plains, N.Y. As corporate director of marketing, he handles marketing services for C-Town, Bravo and Ames. The supermarket companies, which operate stores largely in the New York metropolitan area, use floor decals as part of their ad program. "Our operators are very much in favor of a lively, decorated store," he said. "We like the exciting look that point of sale gives. If it's colorful and graphic, it can highlight the uniqueness of the product. It can educate the consumer about the price/value of the item on sale. We take advantage of manufacturers' point-of-sale material, more so than average chains would do."

Garrison of Piggly Wiggly said that ad signage enables products to "stand out amid the clutter. It helps to have a logo, icon or mascot to assist in branding initiatives." The company's cartoon figure, Mr. Pig, is used by the more than 600 independently owned and operated Piggly Wiggly supermarkets in 16 states.

According to De Herder, a well-executed ad program can enhance the store environment in several ways: increasing sales by reminding consumers about what they planned to buy, creating demand for new products through the delivery of information, and making it easier and faster for consumers to buy products.

"Not only will signage increase impulse purchase, thereby increasing sales, it will also help consumers shop the store better," said Sara Owens, president of Promo Pros, a St. Louis-based consultancy. "There is frustration among consumers about finding the item they want out of the 30,000-plus they have to choose from. Signage can be both educational as well as functional."

According to Richard George, professor of food marketing at St. Joseph's University, manufacturers have traditionally been a source of profit for retailers by providing trade dollars in return for marketing programs such as ad signs. There is more signage in stores today, he said, because retailers are looking for additional sources of income at a time when competition has never been tougher.

"With the difficulties that retailers face in terms of profit margins," explained Owens, "the additional revenue generated by allowing vendors to place signage in stores is a double bonus. Not only do retailers get volume from increased sales, but they also get revenue from placement fees."

A&P's Gasparro said that ad signage helps create awareness of product tie-ins with national promotions for seasonal holidays such as Halloween and Easter, as well as sporting events such as the Super Bowl and the Final Four college basketball championships. Usually, the event corresponds with a promotional allowance, he added, so the advertised item will be reduced in price.

"If we can tie everything from the shelf back to a national campaign," he said, "the manufacturer wins because he gets awareness and moves product, we win because we get an increase in sales and store traffic, and consumers win because they receive quality items at reduced retails."