Survey: CPGs to Focus More
On Brand Building in Stores
By Lynne Cooke
In-store marketing will get considerable attention from CPG professionals this year, says a new survey.
In fact, nearly seven of ten (68%) respondents to an Instant Poll on the Home Page of CPGmatters in December 2007 listed In-Store Marketing as their top area of focus in the New Year. Other areas of attention included Category Management (11%), Shopper Insights (10%), Trade Marketing (10%) and Other (1%). Nearly 400 executives took part in the poll.
“The results don’t surprise me,” said Alison Chaltas, principal of Interscope, LLC, a consulting firm in Southport, Conn. “In-Store Marketing is very much the way category management was in the late ‘80s and early ‘90s where everybody was talking about it and everybody wanted to do it. It felt like the right thing to do.”
James Tenser, principal of VSN Strategies, a consultancy in Tucson, Ariz., also was not surprised that In-Store Marketing is a top priority for CPG professionals. “But I’m a little surprised that it’s a priority by such a large margin. And if you’re talking about a sample of almost 400, that’s a pretty significant base. How often
are you going to have a poll that’s got that many respondents in
this business?”
In recent years, the industry’s interest in in-store marketing – also referred to as at-retail media, shopper media, and shopper marketing – has been spurred on by two significant developments: one, Procter and Gamble’s well-publicized initiative called the First Moment of Truth, and two, the industry’s attempt at developing a metric for measuring in-store media.
P&G made headlines by creating an executive position called Director of First Moment of Truth with the responsibility of focusing on in-store marketing. According to the consumer products giant, shoppers make up their mind about a product in three to seven seconds; that is, about as long as it takes to see a product on the shelf or in a display. This moment is a critical marketing opportunity for brands.
Not long after P&G kicked off its initiative, a group of prominent companies aimed to come up with a new yardstick for measuring in-store media audiences. In pilots, researchers use infrared sensors to track people’s movements past strategic locations within test stores, and converted the measurements into audience data. Experts say the new measurement tool has the potential to change the way brands allocate media mix spending between traditional ad media and in-store channels.
“For marketers, the impact of establishing a reliable in-store metric is gigantic,” Jim Stengel, global marketing officer at Procter & Gamble, one of the major backers of the research, said when the project began. “We’re confident we now can have an in-store tool to better assess shopper traffic and reach.”
The effort, called Pioneering Research for an In-Store Metric (P.R.I.S.M.), initially involved six brand marketers, four large retailers, and one of the nation’s largest media buying firms in a study that measured consumer traffic in 64 retail categories in
10 food, drug and mass stores located in Atlanta and Portland,
Ore. The Nielsen Company is now spearheading the research that
is ongoing.
“That is adding some legitimacy,” said Tenser. “(In-Store) is not
yet a measurable media, and it‘s not yet a media that’s easy for advertisers to buy. But manufacturers have decided that they’re going to shift money in this direction. It’s loud and clear: they’re moving dollars from traditional media and traditional types of advertising into the in-store environment. And the reason being
is that the First Moment of Truth argument carries a great deal
of weight.”
Chaltas of Interscope acknowledged that the other options in the Instant Poll – Shopper Insights, trade Marketing and Category Management – are also important. But executives already know what they need to do in those areas.
“Shopper marketing or in-store marketing is something we need to invent, so it’s getting a lot more attention and a lot more energy,” she said. “Both manufacturers and retailers are struggling with how to invent the right approach to shopper marketing for their own store or category or brand. It’s creating a lot of buzz because it’s an unknown and requires a lot of energy and attention. And most organizations are going from a world of doing almost none of it to doing it for the first time.”
According to Chaltas, manufacturers are enthusiastic about in-store marketing because they can develop an important interface with shoppers and consumers at the point that really matters – when they’re picking up products and actually making a decision to buy.
“It helps brands communicate their preferred brand messaging to build equity as opposed to just, ‘Buy me because I’m cheaper.’ It moves the discussion from a price conversation to one more focused on the higher-order benefits of the brand,” she said.
For retailers, she added, shopper marketing should not be viewed as “a bunch of gismos that can be used in-store.” Rather, it should be viewed as a much more strategic approach to building marketing plans together with manufacturers that meet the needs of the segments of shoppers that are most important to that store and to that category or aisle.
“It should also help retailers build better loyalty among shoppers,” she said. “It should help retailers differentiate versus the competition. And the way to do that is in an integrated plan, not just think about a specific Catalina program or a specific digital media program. It’s more how all pieces of the puzzle come together.”
Tenser of VSN Strategies pointed out the dramatic growth of in-store media networks in recent years, especially those involving digital signage. His research turned up more than 50 companies in North America that are operating third-party advertising networks of various types – everything from checkout coupons and at-shelf signage and coupons to floor decals and digital signs.
“Procter and Gamble is just one company that’s committed an enormous amount of money – like half a billion dollars – to in-store,” he said. “But in-store is broad. So it’s not just to shopper media but everything they do in-store. Nevertheless, that’s a significant sum. If other companies like Unilever, Nestle and Kraft make similar decisions, you roll it all together and before you know it there’s a couple of billion dollars going in that direction.”
Market Watch
PromoWorks in Joint Venture
With Mobile Media Enterprises
By Rose Anthony
PromoWorks, a leading provider of sampling and retailtainment events and promotions, has entered into a joint venture with Mobile Media Enterprises (MME), a provider of experiential event marketing services.
The alliance enables PromoWorks to offer integrated experiential marketing as part of its complete suite of in-store and out-of-store marketing services. It allows the company to deliver brand experiences at the event or street level right into the stores with trade presence, in-store sampling and retailtainment programming.
“As we continue to expand our service offerings to our blue-chip clientele, it is important to focus on the areas where we can provide best-in-class services and continue to deliver the highest levels of quality and service for which PromoWorks is widely know,” said Mike Kent, CEO of the firm based in Schaumburg, Ill.
Bob Lewis, CEO and founder of Mobile Media Enterprises, said, “In today’s experiential-based economy, it is absolutely essential to have the ability to deliver integrated experiential solutions that help brands break through the clutter and drive accountable results.”
Jon Bos, president of PromoWorks, said the joint venture “represents another step in the implementation of our strategic initiatives to create a comprehensive one-stop solution for our clients’ brand marketing and promotion needs.”
Other recent introductions from PromoWorks include GameDayWorks, offering innovative sports marketing services, and Segment Promotions, providing proprietary and exclusive platforms for brands to reach various consumer segments.
NCR Offers Two-Sided Receipts
NCR Corporation is now offering two-sided thermal receipt printing for its FastLane self-checkout units. The enhancement provides promotional opportunities and paper savings. It is available as an option of new self-checkouts or as a field upgrade for existing units.
The two-sided printing technology allows retailers to customized messaging on receipts rather than relying on paper rolls with pre-printed promotions that cannot be changed. Plus, to attract attention and develop more effective promotions, retailers can use the unit to print the receipt in combinations of black on one side with black, red or blue on the other side.
‘Easy Sell’ at Stop & Shop
Grocery customers at Stop & Shop ion New England are enjoying a futuristic shopping experience combined with personalized savings. By using Easy Shop, a new handheld terminal with a small screen, loyalty card shoppers can now scan items while they shop and receive targeted offers as well. Easy Shop is available in 90 supermarkets. It replaces the Shopping Buddy shopping cart screen and scanner that was deployed in 16 Stop & Shop stores.
But there is a downside. Easy Shop lacks touch-screen capability, rendering shoppers unable to transmit, for example, deli orders – although they can be placed at the deli kiosk and shoppers are alerted when the order is ready. Also, the device is also unable to locate products in the store (a feature of Shopping Buddy). But Easy Shop is much smaller and less intrusive than its predecessor.
DECEMBER 2007
No Shopper Media
In Tesco’s Fresh & Easy
By Jack Grant
The hottest trend in retail marketing is “shopper media,” which refers largely to high-tech communications in stores. Meanwhile, the hottest format in retail is Tesco’s Fresh & Easy, which debuted
last month in Southern California after much publicity and anticipation. Ironically, there was no evidence of shopper media in Fresh & Easy.
Craig Johnson of Customer Growth Partners said, “In my conversations with Tesco, shopper media didn’t come up. I’m not saying they would be against that in all circumstances, but it was not something they were looking to do.”
So what was Tesco looking to do and why wasn’t shopper media part of the mix?
“They’re saying to the consumer, ‘We’re giving you great and interesting products that meet your lifestyle, and we’re also doing it without spending a lot of money on decorations and needless pizzazz,’” said Brian Sharoff, president of the Private Label Manufacturers Association (PLMA) and a long-time observer of Tesco, a dominant grocer in the United Kingdom.
Tesco’s first Fresh & Easy Neighorhood Market grocery stores kick off a rollout of hundreds of small-format units that will cover Southern California, Arizona and Nevada in the coming year. The retailer aims to attract on-the-go shoppers by largely offering ready-to-eat meals and fresh produce in a footprint of 10,000 to 15,000 sq. ft. – about the size of a Trader Joe’s.
It’s not like Fresh & Easy couldn’t use some pizzazz. Early appraisals in the media say the stores are “plain” and “bare-bones.” Other than sampling stations, the stores lack any promotional flair.
“I haven’t seen anything to suggest that there’s going to be any advanced shopper media activity going on in those new stores,” said James Tenser, principal, VSN Strategies in Tucson, Ariz. “Maybe, like any other experiment, you can only have so many variables in motion at a time. Tesco is a company that I think is not likely to be unaware of digital signage or the in-store media innovation that’s going on. It’s happening with plenty of vigor in Europe as well as in the United States.”
Tenser pointed out that the stores would be stocking a lot of private label product – a strong suit for Tesco in the U.K. Most shopper media promote national brands and give the retailer new revenue streams from CPG promotional budgets.
“If these stores are going to be largely private label, then Tesco is not necessarily going to pay itself trying to promote its own brand. These items are not necessarily going to be deriving incremental, upfront revenue. But there are some ideas floating out there about store brands doing that. Would a retailer develop a network primarily to support its own store brands at the shelf using in-store media? Maybe. However, the program would have to justify itself entirely based on incremental sales and profit,” he said.
Johnson, president of the consultancy in New Canaan, Conn., said the small size of Fresh & Easy makes it difficult to find space for digital signage, interactive kiosks and other devices.
Other observers agree, but acknowledge that small retail units can accommodate some forms of shopper media. For example, Harvest Foods is enjoying early success with a meal-planning kiosk in its 19,000 sq. ft. store in Bedford, N.H. The kiosk, provided by ShoptoCook in Buffalo, N.Y., is also installed in other independent grocery stores that don’t have the large footprint of chain competitors.
Tenser of VSN Strategies sees a place in Fresh & Easy for small, self-contained video units that can be placed at the shelf very close to a product that’s being promoted.
“Those concepts ultimately will have more clout than some of these flashy, large sign systems that are being installed,” he said. “The idea that the items promoted in your weekly circular could also be highlighted at the shelf with small devices that may incorporate video or some kind of electronic display is very interesting.”
Tesco has a very active loyalty marketing program in the U.K. that often gets credit for its enormous success and popularity with consumers. Although the retailer says there are no plans to unveil a similar program in the U.S., Johnson believes that loyalty promotions will one day debut in Tesco’s U.S. stores.
But maybe that will be in another format, which will also be equipped with shopper media of various types. Retail experts don’t believe that Fresh & Easy will be Tesco’s only retail format in the U.S. That’s certainly not the case in the U.K. where the retailer operates grocery stores that are big and small, urban and suburban, as well as unique convenience store/petrol stops where motorists can partake of a variety of ready-to-serve foods.
“The thing you have to understand about the Tesco stores in the U.K. is they do not follow a uniform, cookie-cutter approach,” said Sharoff of PLMA.
Market Watch
Harvest Markets Pilots
Recipe/Meal Planning Kiosk
By Lynne Cooke
Harvest Markets, a supermarket owned by Associated Grocers of New England (AGNE), is testing a unique in-store touch-screen kiosk for recipes and meal planning in one of its two supermarkets. The kiosk is located in the produce department near the entrance of the 19,000 sq. ft. store in the affluent town of Bedford, N.H.
ShoptoCook Recipe Centers provide shoppers a unique opportunity to discover new and exciting solutions to their shopping dilemma; namely, what’s for dinner? The device engages shoppers at the most influential point in their buying process. They can print their favorite recipes from an in-store kiosk typically located in the perishables department of the supermarket.
“So far, the results have been very positive,” said Tim Merrill, general manager of the Associated Grocers supermarkets. He is banking on the kiosk to help differentiate Harvest Markets from strong local competition from such chains as Shaw’s, Stop & Shop and Hannaford Bros. He is also looking to the application to promote good health via a special module on health and wellness.
“We installed the recipe center because we thought our customers would relate well to it, and we have had a very good response from them,” said Merrill who added that the kiosk’s application of pairing wines and foods was a shopper favorite. Harvest stages wine samplings every Thursday and Friday nights. “It’s been good tie in because we are a big player in the wine business.”
In the first 40 days of installation, there were nearly 900 recipes printed from the recipe center. Collectively, there were more than 6,600 ingredients from those recipes for sale in the store. Research shows that 62% of shoppers buy at least one ingredient for the recipe they printed.
Merrill explained that ShoptoCook conducted training sessions
with the store personnel to educate them about the kiosk and its applications. “It was very important to have our managers – especially in the produce, deli, seafood and meat departments – understand the recipe center and the value it would have for
their departments.”
Merrill said if the recipe center continues to perform as expected, AGNE would consider installations in other independents that it supplies. ShoptoCook has over 750 kiosks installed at supermarkets throughout the country.
Frank Beurskens, CEO of ShoptoCook, said, “We continue to develop new media-based applications for the perishable perimeter, with the goal of engaging the consumer in the shopping experience. We understand the world of the shopper and we understand the world of technology.”
New Leadership for IFBA
Jim Hall of Riteway Sales and Marketing, Lakeland, Fla. and Steve Horowitz of Co-Sales Southern California, Sherman Oaks, Calif. have been named to the top elected positions with the Independent Food Brokers Association (IFBA). The 90-company member group operates within NARMS International, a global trade association of retail support service groups.
Hall, as Chair, and Horowitz as Vice Chair, were named at a recent meeting of the IFBA Division Committee. They replace outgoing Chair Chip O’Hare, Johnson O’Hare Company, Billerica, Mass. and outgoing Vice-Chair Don Cox, Co-Sales Company, Phoenix, Ariz.
Self-Service at Stop & Shop
Stop & Shop Supermarkets is now working with the ZoomSystems company to pioneer the emerging concept of automated retailing. Two self-service shops can now be found in select Stop & Shop locations: a Proactiv Solution Skincare shop and a Consumer Electronics shop featuring iPods, headphones and other
innovative gadgets.
These self-service shops are yet another step in the evolution of shopping, which enables consumers to get more of what they want in one place. Shoppers select items through a touch screen, finalize purchases with a credit or debit card, and receive their products immediately via robotic arm. All of ZoomSystems’ shops are networked and centrally monitored, ensuring high reliability and customer service levels. ZoomSystems enables manufacturers to place their products directly in the path of consumers in an interactive manner. This removes them from the competitive clutter
of traditional retail offers the immediate gratification of instant
product delivery.
