BrainTrust Query: How do we make the ‘Store as Media’ opportunity real?
By Laura Davis-Taylor, Founder and Principal, Retail Media Consulting
In continuing our efforts to employ RetailWire as a think tank and feedback mechanism for new ideas, we present “BrainTrust Queries”: a series of proposals,
hypotheses and intellectual investigations from our BrainTrust panel of retail industry experts.
The “Store as Media” concept is rapidly gaining traction. It’s tantalizing premise is that every communication opportunity within the store is actually one piece of an overarching media toolbox — be it print, digital, event or mobile. Therefore, as with any other media, it needs to be evaluated, planned and purchased as one spoke in the hub of any integrated marketing program.
In recent news, the WPP group’s Mediaedge:cia is supporting the concept by forming MEC Retail. This new unit specializes in providing services to valuate store media, help advertisers choose the stores most suitable for promotions and determine promotional effectiveness. This news comes on the heels of Interpublic’s formation of the Consumer Experience Practice, a group solely focused on understanding the experiences people have with media — in current and future forms — so that they can help brands more relevantly and successfully engage consumers.
The Point of Purchase Advertising International (POPAI), which has also been active in efforts to try to valuate store media, has predicted that U.S. advertisers will spend $19.3 billion in 2006 on POP advertising. The first group to publicly support the concept of the store as a valued media channel, or “Marketing at Retail,” they saw that digital signage was operating as a catalyst to a new iteration of POP that can make use of media and marketing best practices. And, digital signage was just the beginning, as more mobile and technology-based communications emerge to engage customers while shopping.
All of this makes sense for the following key reasons:
- Media has continued to fragment;
- Consumers are harder to reach, and;
- In creating a brand experience, one is not going to be successful if the physical manifestation – aka the store experience – does not fulfill the promises of the brand advertising.
Despite new support for the Store as Media concept, certain realities are inescapable. Marketing and Merchandising teams have very different roles and responsibilities, different measures of success, and aren’t known for their appetite for working together.
- The Merchandising teams plan, price and execute the store promotions – and they don’t see it as media or feel that Marketing teams are imperative to their success.
- Retail Marketing teams don’t always understand the Merchant world and the realities of in-store execution.
- Most importantly, Agency media planners and buyers have very little understanding, or current role in, the planning and execution of the retail store activities. Why should they assume a leadership position on something that they’ve never done?
Moderator’s comments: How can we get marketing and merchandising working together in order to take advantage of these new store-as-media opportunities?
What role does the traditional and media Agency play?
The fact is, reaching consumers successfully and motivating them to come back is now hard. The formulas that we’ve historically used have changed and technology
will continue to make it harder. After all, the very technologies we now have to reach people can be used to screen out our efforts!
In my opinion, it’s going to require the chiefs within the retailer corporations to create – and reward – a “village” approach. Understanding the customer,
and planning and executing the methods to reach them, needs be done with all niche specialists at the table. Be it the interdepartmental teams or the media, brand, traditional,
direct, store design or interactive agencies, if we aren’t working together, it’s going to show in the consumer experience. –
Laura Davis-Taylor – Moderator
This situation is driven to a large degree by financial scorecarding. Promotional space (prime selling space in retail) translates to sales and profits, and buyers use that space to reach their assigned targets. All one needs to do is witness a weekly promotion meeting where buyers are “presenting” end cap opportunities for “their department”.
The key is a unified marketing plan that incorporates all in store marketing opportunities to reach shoppers in the most effective way with the most appropriate products to drive basket share and experience for that week.
That can only be accomplished when you change the way you currently measure buyer goals, as those goals are driven by overall department sales and profits which include base sales on the sidecounter as well as promotional sales supported by ads, displays, and features.
Category buyers must collaborate to win the shoppers loyalty and experience in the store vs. compete for share of promotional in store real estate. That mindset change has to be driven at the top executive levels of the organization starting with how you measure a buyer’s effectiveness and success.
My understanding is that Wal-Mart and P&G withdrew from part of an in-store media audience measurement industry group. See Wal-Mart Pulls Out Of Marketing Study.
The ultimate challenge: getting in-store media to be effective with its audience instead of being tuned out. In-store media can be reduced to just a lot more clutter. If a person watching TV sees 4 different car ads and 3 different fast food ads and 2 different cellular ads in 20 minutes, what will be retained? What’s the real impact on buying behavior? If a person in a supermarket sees 10,000 different colorful product labels, 2,000 shelf talkers, 40 floor display signs, 12 window posters, and 4 minutes of TV commercials (while standing in line), will any of these competing messages have an impact? Or will the person just feel relieved to escape from all the sales noise when she leaves the store?
Store as media is clearly on the business horizon for both merchants and marketers, but there are conditions that need to be in place if we’re going to reach a new day of reaching/connecting with consumers and shoppers at store level.
The problem is complicated because of existing relationships between the players as they work on trade promotions, i.e., where marketers are influencing merchants to put additional emphasis on selling their products.
Moving forward into the world where marketers and merchants will work more closely together around the store as media, we’ll need to:
>More clearly define and be able to measure the trade promotion output of cooperation–something that won’t be hard to do.
>Establish a measurement system, e.g., gross rating points, that marketers can use to evaluate store media in the same way they evaluate all other measured media. This is something that good people are working on right now and should be in place before the end of 2006.
>Build a new collaborative framework that measures that and gives credits for the value created by each party. The outline of this framework is available today, but it will take time for everyone to familiarize themselves with it to the point where it provides the “rules of the road” for marketer/merchandiser collaboration around the store as media.
The store-as-media has always been an opportunity waiting to be fulfilled. When grocery manufacturers — with the help of their agencies — had the power to pull product out of the store, they probably gave little consideration to the possibility that one day they might have to push their products out of the store with the new processes. That day seems to have come and given the impetus to include the store-as-media in the media toolbox, which will become most successful when the manufacturer and retailer can “start off” by planning cohesively to accomplish mutual objectives. Sounds rather elementary, doesn’t it? And it would be if there weren’t so many individual goals.
As for a corollary thought on retailer initiative, I have always been impressed when a retailer realized that his product (his store) would benefit if it could be perceived as an entertainment media center and could communicate a “Sense of Theater” to its customers. Stew Leonard’s first store comes to mind when his “Sense of Theater” with only 4,000 SKUs created a destination each week for 40,000 customers who really enjoyed what that store-as-media communicated.
The Store as Media doesn’t mean more signs, labels and displays, or shouldn’t. Store as Media means using the store as an opportunity for communication, more particularly for two-way communication. To implement this concept effectively, several fundamental changes need to be made.
First, collaboration needs to exist but each organization needs to decide what that means to them, what they are willing to do, and what they are willing to share.
Second, the focus needs to be on the consumers – what they value, what they want, what they buy, and what experiences they want. Stores won’t be the same; merchandising, marketing and advertising need to collaborate internally; measurement of performance needs to change. The only unifying theme that makes sense is the consumer.
This simplistic orientation requires a drastic change of business process and orientation.
I guess I am a little confused and maybe it is because each retailer defines the roles of merchandising and marketing differently. Conceptually, I have always thought of merchandising as category oriented and marketing as shopper oriented. Yes, the two may sometimes clash on specific promotions, but their fundamental goal is to increase the quantity or quality of revenues. Quality refers to the purchase of higher profit generating items.
With that understanding, I would think both can understand the store as being part of an “advertising continuum.” The difference would be that merchandising promotions would be generic and marketing efforts would be directed at specific demographics. This means that the promotion message must be carried down to the store shelf.
I guess another question is whether you consider the store as the top or bottom of the continuum. Are you trying to use the in-store material to cause a change in consumer behavior or is it meant to support an advertising message that was initiated outside the store?
There are a lot of angles to this question, but I don’t see why merchandising and marketing cannot work together.
It is easy to become focused on the complexities and assumed opportunities of this concept and lose sight of some fundamental questions that must first be answered. Mark hints at this. A regional grocery chain in the Southwest took the “store as media” concept a great deal further than I have yet seen elsewhere. Customer complaints about the use of advertising soared. Loyalty-card use dropped. Customer vindictiveness went to heights I’ve rarely seen in retail. Store traffic declined. Eventually the chain closed. There were a number of factors in the closure, but our analysis showed that customer good will and loyalty were some of lowest we had ever found. Focus groups and surveys on this retailer consistently showed customer anger over use of media in the store. Retailers and consultants alike, beware before you plunge into this.
The implementation of the store-as-media concept is still not feasible for current retail outlets. The entire structure of the management would need to be re-aligned, getting away from being category-centric and focusing on a holistic approach. Simultaneously, manufacturers would have to restructure their relationships with the retailers to support this trend.
Never going to happen successfully in my lifetime. The leader is the worst offender and best example – just give me low prices and I don’t care about customer experience. But it works. So other Retailers can’t really afford a radical change in their behavior.
Getting marketing and merchandising to work together is often difficult to do, but should not be in my opinion. If both teams focus on the customer and work more closely with each other and operations, their efforts would be more integrated and successful. Reaching consumers with simple yet concise and intriguing offers through a variety of media is important, but numerous offers are often complicated and difficult to follow at store level.
Integrated messages would benefit store associates as well as customers, because it is the associates who often bear the brunt of having to implement new programs and offers each week at retail level. If management makes a customer focus the priority, rather than each separate department having their own priorities, clearer marketing efforts will surely occur.
The concept of store as media is not so much about merchandising and promotion as it is about ‘meaningful engagement.’ Based on some of the threads here, I am led to believe that many of you think that the media will look and feel just like advertising we see on TV. Therein lies the problem. We must remember the underlying agenda here and not get confused by the choice of words. Although we have seen great numbers to support POP media, i.e. 73% of buying decisions are made at the shelf, this is not because of promotions but rather because we are giving the consumer what they need and what they want. Remember that we have also found that our largest % of shoppers leave a store without buying a thing simply because they were not ‘engaged meaningfully.’ We must tackle those exit points by providing that meaningful engagement whether it be with a sales associate, kiosks, media etc. But first and foremost, for that engagement to be meaningful and not just noise, we must understand what the consumer wants from us. Those who have been successful at this have provided more in depth information about products, how-to papers, recipes, provided interactive capability so the consumer can get some answers. That is when the store becomes media! When you can tap sources of information, customer service and help the consumer to get answers and come to the buying decision faster. So no, this is not just about merchandising and marketing, it is about customer service, store operations and closing those exit points!
Wow, some terrific comments to a terrific article by Laura Davis.
Every network I have ever worked on or consulted with is unique, and I find it difficult to attempt to generalize what makes a successful one. While we strongly suggest these networks should be about driving sales, the retailer really needs to be educated so they can help define a goal that can be tracked. And this is possible!
Regarding working together, we always stress to a client to get other departments involved, including the obvious — marketing & merchandising, but also training, human resources, corporate communications and public relations. Someone needs to drive the ship, but it can benefit everyone.
With that said, I also agree with Mark Heckman on content being the driving force behind the successes of these networks. I’ve been in stores where I see TV spots running in 10 minute loops, as if this is effective. Each environment is unique and needs to be programmed that way. Nobody wants to be sold to, especially inside a store, so the content needs to reflect that. I know people who don’t shop at particular stores because of annoying content. This is not a way to promote our industry! Educate a customer and let them drive the sale. Getting feedback from the retailer on what programming works, and more importantly, what creative isn’t working, is one of the keys to having a successful network, one that is judged successful by the one who matters, the client.
Interesting discussion and some great comments, Laura!
Quite frankly, I don’t think things look so good for the silo-dwellers. You can see from the comments to your article that there are plenty of marketing professionals who ‘get it.’ In other words they are keeping up with the changes that are occurring in the brave new world of marketing to ensure that their company/agency/team acquires the perspective and skills to provide clients with the integrated marketing services they demand. Things are moving way too fast for anyone who doesn’t want to, or can’t get it, to come around. Natural selection isn’t pretty but it is efficient.
As with many things, the store-as-media concept requires rethinking the retail concept from start to finish. Most retailers that I know are very fragmented in thinking about touch points with the customer. From product development and packaging through merchandising to marketing to customer service, retailers don’t see a single thread but many chunks patched together. The innovation will come when a retailer assigns someone to think through the customer message from start to finish and coordinate the pieces along the way so that the end result is cohesive. Store-as-media should not mean more or less media, but rather is an opportunity to tie together all the bits and pieces. If some 70-80% of customers want entertainment, then all of the elements must tie together to provide an entertainment experience that excites the customer to buy. It isn’t just marketing and merchandising working together, it includes product development, customer service, operations and real estate.
I particularly share the opinion of Bill Bishop regarding the success of in-store media, or the store becoming the media being highly dependent upon the integration of the trade promotion process with in-store messaging. Actually, given the implied expectation that in-store media should have some positive effect on sales of products in that same store, it is hard for me to envision how trade promotion and in-store “gross rating points” won’t somehow be joined at the hip as this medium develops.
While “good people” are working on developing a widely accepted platform of performance metrics, “great people” should be working on solving many of the consumer issues that have plagued the effectiveness of in-store media for years. First and foremost is relevant content. Connecting the message to a call-to-action, a promotion, or a new product that offers value to the consumer is the type of message that will positively resonate with consumers and actual prompt incremental sales. Running the same ad shoppers can see at home on TV (which they are now about to TiVo through) in a fifteen minute cycle, will result in the same response as it did back 10 years ago…unplugged TV monitors and annoyed shoppers.
I get the sense that some believe that now that we have “flat screen” equipment and digital content technology all of the issues of the past will dissolve. The future is bright for those who learn from the past before they bolt forward!
“The retail store is a communications environment for brand messages.” From the package labels to signs, displays, sampling and coupons to at-retail media (both static and digital), the ultimate goal is the same – “customer activation.”
Activation essentially means stimulating favorable intent and actual purchase. The assumption is that the final product choice reflects the culmination of a variety of brand interactions that may stretch back for years – encompassing brand reputation, past product experiences, traditional media advertising, promotions, and in-store messages (including competing messages and prices).
P&G calls this the “first moment of truth,” a usage that suggests a customer-brand relationship begins with product experience. Other large CPG companies refer to “shopper marketing.” Terminology aside, it is evident that shopper messaging complexity defies easy measurement of ROI. It’s a multi-variable equation. Measuring frequency and reach of in store media will be helpful, but it won’t come close to being explanatory on its own. The same may be said of promotion “lift” analyses.
Major ad agencies are reeling at forecasts that billions of CPG ad dollars will shift to shopper media in the coming 36 months. Digital media players are rushing to meet this market with in-store messaging systems. That explains the heightened interest in measuring in-store GRPs.
Chain retailers have foot traffic galore and sweet dreams of making easy cash by selling access to their audiences. But linking these activities with merchandising is a long way off.
The store is a great place to reach the consumer, and given time-compressed lifestyles and fragmented media usage, a cost-effective one.
Before you select a retailer partner for this, walk their stores. If you find effective cross-merchandising in the store (j-hooks of vegetable peelers in produce, fruits merchandised in the cheese section, hangover medication merchandised with mixers, etc..), then they understand the basics of meeting a shopper’s needs holistically.
If you don’t see cross-merchandising, you likely have a retailer still dominated by stove-pipes within the store; if they can’t get the basics right, IMHO they aren’t a good vehicle for reaching the consumer experientially.
The real issue here is that spending by the big advertisers is still siloed — As long as the advertising budget (dollars to be spend on presumably unmeasurable “brand equity building”) exists separately from the promotion budget (dollars to move product now), Store as Medium will remain an idea not a reality.
The fact is that most in-store media does not “pay out” in the way good direct marketing does. That means that you need to give some “credit” to the advertising value of in-store media. But no one is empowered to buy hybrid media — media which is designed to move product AND build equity.
Advertisers need to fix this inherent problem in their systems before Store as Medium will really work.
Great post, Laura, and very interesting feedback, all.
This whole thing is a big challenge to all stakeholders. Problem is that, as we all know, a fundamental organizational shift needs to occur within the retailer’s corporate environment, not to mention in the vendor’s corporate and distribution world, as well as within the marketing services community.
There’s obviously no easy answer, since what we’re talking about is integrating disparate organizations, infrastructure, systems and people. But at a certain point, we’re all just going to have to put a stake in the ground regarding establishing some standards and try to work to them. Some of us will play and some won’t, but regardless, we’ve got to start somewhere.
If we all thought about this a bit more like Seth Godin, who suggests turning the funnel upside down to enable the consumer to drive the sales and marketing experience more, I think we’d find some keys to making this massive retail undertaking more logical – and possible to execute. It is, after all, all about the end customer — the consumer.
At Psychsoftpc, a high end PC manufacturer in Massachusetts, we have been doing this sort of thing for a number of years now, first with our Psyches Genie Digital Signage PC and, more recently, with our Psyne Creation Station for color print point of purchase signage. What I’ve found is that it is important to strike a balance between blending into the background, the way McLuhan said radio does, and being annoying. One gets your message ignored and the other gets a negative association to your product. Spacing of Digital Signage, especially if there is sound as well as video, is also important. If something is used too much, it becomes commonplace, and then gets ignored. If there are competing messages too close together, the brain will tune all of them out. Despite appearances, we can only concentrate on one thing at a time. So the watchwords are “less is more” and “moderation in all things.”