Platt Retail Institute: Breaking Down Barriers to Create a Competitive Advantage
By Don Watt, chairman
and CEO of D+W Partners
a special arrangement, presented here for discussion, is a summary of
a current article from the Platt Retail Institute’s Journal of Retail
Several years ago, we experimented with
installing TV screens in the back rooms of 10 stores. This was in response
to management’s concern that store personnel were not following weekly
plans. The company president was filmed, outlining the five key objectives
for the week, ranking each store on effectiveness of implementation.
Each week, results were reviewed. No manager wanted to be questioned
on shortfalls to plan. The resulting peer pressure began to stimulate
improved performance. The 10 test stores outperformed the rest of the
chain by an average of 50 percent in implementing plan.
A 15-minute tape,
shown to every employee, was more effective than the previous 2-½-inch-thick
printed document. The reason was obvious. The printed piece was too large
to absorb, and if the reader did make an attempt, it delayed other functions.
on the test, screens were installed in all 250 stores. Internalizing
TV production functions, with a director, camera operator, assistant
and editor, lowered costs per commercial from $150,000 to $600. Annual
studio costs to set up and operate were under $1 million. Payback was
under 10 months, with ongoing annual savings of $3 million, including
As the screens sat idle during the day, they
were moved to the selling floor, to promote specific product programs.
The results were surprising. Average increases of 400 percent were achieved
when the authority figure delivered the message. At first, this created
some turmoil, requiring the issuing of rain checks, to compensate for
out-of-stocks, until adequate stocking levels could be predicted. Another
benefit was discovered. Pricing became less sensitive, as the value proposition
was clarified. The president, as consumer advocate, was more believable
than a paid spokesperson. Moreover, his message differentiated his business
from competitors in a meaningful way.
Several years later, the next president
of the chain dismantled the system, as he was uncomfortable on camera,
or communicating with employees in this medium. His tenure proved to
be short and the idea became distant history, until a new president began
to utilize mass media to tell consumers about his private label program.
Will he move to communicating in-store, given the proven effectiveness
of the system?
Stay tuned; a new case history may be
around the corner. For other retailers seeking to find a competitive
advantage, today’s technological advances offer an opportunity to use
flat screens, centrally controlled, without the spokesperson leaving
the office. This use of an authority figure isn’t for everyone, as it
requires several factors to come together, but when they do, the results
can be exciting and profitable.
Questions: What do you think of the potential to feature top retail
executives on in-store media networks? Generally, do you like seeing
store CEOs or other “authority figures” involved in commercial