What’s In-Store for Brands? Retailer Marketing
By Bill Bittner, President, BWH Consulting
Yesterday’s Wall Street Journal front page trumpeted the shift from out of store advertising to in-store marketing as the way to reach consumers suffering from message overload as they make purchasing decisions.
According to the article, Procter & Gamble created a new position 18 months ago under the title of Director of the FMOT (pronounced “EFF-mott”) or “First Moment of Truth.” The FMOT Department’s goal is to impact consumer decisions during the three to seven seconds that comprise the “First Moment Of Truth” when a consumer initially notices a product on the shelf.
P&G’s director of FMOT, Dina Howell, told the Journal her goal is to take in-store marketing “from an art to a science.”
The growth of in-store marketing is perhaps best exemplified by the commitment to it by the world’s largest retailer. The article discusses Wal-Mart’s use of in-store television as a vehicle to present new products to consumers for the first time. Last year, according to the WSJ piece, 122 new products were launched on Wal-Mart TV. Brand marketers pay to air their product spots on the retailer’s in-store network.
Many advertising firms are now moving from their traditional branding roles using out-of-store media to developing in-store promotion campaigns, including special shelf displays and packaging.
The investment bank Veronis Suhler Stevenson Partners pegged last year’s in-store marketing expenditures at $17 billion. It projects that number will increase to $23 billion by 2009.
Moderator’s Comment: Where do you see in-store marketing heading? Does it provide an opportunity for category managers at retail to increase the return
on their sections by being able to offer point-of-purchase promotions?
The focus on in-store provides a great opportunity for category managers at retail to generate incremental volume and profits for the departments and sets
they oversee. It has to be tied in, however, with an overall in-store program that prevents “desensitizing” the customer. Too many in-store displays and promotional messages may
turn off customers who want to get their shopping chores done in peace.
Retailers can work to plan programs for the various categories as the consumer sees them, emphasizing soups in the winter and cold cereal in the summer,
and let manufacturers bid to participate. Category managers will begin to look at the total performance of the category instead of individual brands or items.
Looking at this from the technical perspective, this trend further emphasizes the need for retailer item files that recognize label variations for the same
item. One of the easiest ways for the manufacturer to impact the point of purchase decision has been with special labeling, such as cents-off or pre-priced versions of a product.
The challenge is that inventory tracking and replenishment systems are not always built to recognize the relationship between the various versions of an item. With Computer Assisted
Ordering and perpetual inventories becoming more of a reality, it is important the system designs take into account the variations on labeling. Now with increased emphasis on
in-store marketing, it becomes even more important. –
Bill Bittner – Moderator