Coke Activates Brands at Retail
With Tests of Video Media

By Dale Buss

Coca-Cola and Meijer Stores learned tons about harnessing in-store video media in the service of shopper marketing from a test they ran a couple of years ago with Coca-Cola Classic. Now both the leading beverage brand and the major Midwestern hypermarketer are applying these lessons to their own expanded in-store initiatives with different partners.

Atlanta-based Coke has been testing the use of in-store video to activate brands at retail with Wal-Mart Stores since last fall. And Grand Rapids, Mich.-based Meijer is finishing up an entire new in-store video network that will allow it to target areas throughout its stores and to work with many brand-name partners.

“Shopper engagement hinges on relevance,” said Laurie Clark, senior customer media and interactive manager for Coca-Cola, at a recent presentation on the company’s test with Meijer, Starcom MediaVest group, and some technology partners. “But maximizing shopper relevance is complex. And technology enables better execution and results.”

That’s particularly true when that technology comes in the form of an in-store media network that touted Coca-Cola Classic during a Christmas-holiday period, when many Meijer shoppers already were predisposed to purchase soft drinks.

“When you’re able to advertise at point-of-purchase, it has a much bigger impact than flyers or weekend tabs,” Rob Fleener, Meijer’s vice president of marketing, told CPGmatters.com. “When shoppers are ready to buy is the right time to be touting your products.”

Specifically, Coke and Meijer set up video screens at store checkouts, in a grocery aisle, in a pet-care aisle and in a pharmacy aisle during the promotion and ran 15- and 30-second clips featuring Coca-Cola Classic. One primary clip involved the animatronic polar-bear “mascots” that Coke is famous for bringing out for winter-holiday promotions. Another motif simply featuring ice-cold bottles of Coca-Cola Classic.

Sales results were what Fleener called “dramatic”: percentage increases in the high single digits, he said, directly tied to when and where the in-store media network played the spots. “Not only did it drive specific Coke sales, but also the whole soft-drink category, although Coke benefited most,” he said.

And Coke, Fleener added, considered the initiative “a very successful program for them because the cost is relatively minimal even with a store-specific program like that.”

Coca-Cola declined to elaborate on its results or on any lessons it has learned in its similar in-store media test with Bentonville, Ark.-based Wal-Mart.

Meijer figured out a few important things about shopper marketing from the program with Coke. First is the importance of using in-store video mainly to offer customers “immediate gratification,” as Fleener put it.

“We found that they could be enticed to change behaviors right away,” he explained. “A lot of other things [in shopper marketing] are next-shopping-trip kinds of stuff. This program also didn’t ask people to buy more than they were used to, or to try something unknown to them, or to switch brands. This said to them, ‘It’s here; this is Coke; you know the taste; try it now.’”

The Coke Classic test also showed Fleener that, with a media format as new and still-developing as in-store video, safe presumptions can blow up in your face. For example, he and the Coca-Cola representatives had assumed that the video clip depicting the cuddly polar bears having fun with Cokes would be more popular with shoppers than more ordinary images of Coke in a glass.

“But the images of the drink itself, with water glistening on the outside of the cold glass, proved to be a much better driver for business,” Fleener said. “That was especially true as we continued the program after the holidays. At that point, people were done with the polar bears and ready to move on.”

As far as Coke is concerned, the success of the test left executives determined to try it in more retail chains and channels, including Wal-Mart and, as Clark put it, “potentially others that provide shopper-response reporting.”

Clark said that Coca-Cola also planned to use what it learned “to inform better execution” and “optimize” its approach to in-store video. And the company planned to “build a body of knowledge across Coca-Cola brands.”

As Coca-Cola shares what it has learned with retailer partners like Meijer, Fleener said, it “can save us a lot of time and effort and money by utilizing the best practices from those who spend a lot of money on this – to figure out what works and doesn’t work.”

Right now, Fleener and colleagues are eagerly applying what they’re learning to a major enhancement of Meijer’s in-store video network. They are figuring out how to customize individual messages to different stores to accommodate how shopper demographics vary by location; for example, Meijer has some stores in or near city cores, while others are more rural.

Meijer also is attempting to figure out the best departments of the store, and the best product segments, for using in-store video. And it is determining the paths of least resistance to repeat success in using the technology to market to shoppers.

“We’re not in the business to try to get people to change their behaviors, but to get the best value from applying the technology,” Fleener said. “We’re looking at every item and trying, from a category-management standpoint, to maximize our ability to make the products as relevant and valuable as we can to consumers – but also to make it pretty easy for them to understand what to do.

“If people have to stop and think about the consequences of what we’re trying to promote, it defeats the purpose.”

Applying these criteria, for example, fresh seafood may be an area to get some in-store video treatment at Meijer. “Everyone likes it and knows that it’s relatively good for you, prepared the right way,” Fleener explained. “But a lot of people are just intimidated; ‘What do I do with a fish fillet? How do I cook and prepare it?’

“If we can do things [with in-store video] to help people overcome their apprehension of preparing things that are good for them, then maybe we can get people to do things they haven’t tried before.”


Market Watch
NARMS Promotes Study of ‘Return on Retail Investment’

By Rose Anthony

The National Association of Retail Marketing Services (NARMS) is stirring up interest in its upcoming study of Return on Retail Investment (RORI) by promoting the report at trade events.

A preview of the study was presented in March at GlobalShop in Las Vegas. Last month, details of the upcoming project were released to association members at the 14th Annual NARMS International Spring Conference in Colorado Springs. The study is scheduled to be fielded starting in August with the results available at the NARMS 2010 conference in April, with preliminary results released a month earlier at GlobalShop 2010. 

NARMS officials define RORI as “the return on that part of the marketing mix that is applied directly to the retail market ‘selling place’ while taking the effects of price out of the equation.” The selling place is defined as both brick-and-mortar and on-line retail with linkage of both offline and online.

Unlike several other recent industry studies, NARMS says the RORI effort will seek to be “inclusive” by involving retailers, manufacturers, merchandising service providers and industry suppliers in establishing marketplace value.

The study aims to become the logical building block for manufacturers, retailers and service providers to begin to understand and define the future. NARMS says it will deliver transformational ROI for the retail spending mix and carries with it innovation in thinking, metrics and implementation.

NARMS will engage Group M Business Sciences, a WPP Worldwide Business Analytics Company, for study design and the faculty of the University of Wisconsin-Madison’s Kohl Center for Retailing Excellence as partners in research design, insights and as an arbiter of objectivity for the RORI study.

Other companies consulting on the project are Pelco Advisors, Selling Machine Partners, Hewlett-Packard Company, and Mphasize.

POPAI Salutes Displays of the Year
At GlobalShop in Las Vegas, POPAI presented its Display of the Year (D-O-Y) Awards to brands Dr. Scholl’s, Yellow Tail, the movie “Space Chimps” and retailer Best Buy. 

The Dr Scholl’s Custom Orthotics Walmart Kiosk, created by Mechtronics Corporation
for Schering-Plough Corporation, received the Permanent D-O-Y award; the Yellowtail Lava Lamp created by CM Global for Ryan Partnership captured the semi-Permanent award; Space Chimps from Drissi Creative Studios for 20th Century Fox captured the temporary award and The Best Buy-Mall of America Living Standee created by Modernistic Incorporated for Best Buy captured the award for Digital Signage.

ISM Expo Set for October
The 2009 In-Store Marketing Expo is scheduled to take place Oct. 7-9 at Navy Pier’s Festival Hall in Chicago.

The annual event, hosted by the In-Store Marketing Institute, combines a broad selection of exhibits and a full slate of educational seminars.


APRIL 2009

Hormel Foods Aims to Simplify
Center Store Shopping

By John Karolefski

Hormel Foods Corporation is trying to breathe life into the dying Center Store.

The $5.75 billion maker of meat and poultry products, salsa, canned stew and microwaveable meals is combining innovative products and partnership with retailers to simplify the shopping experience and boost sales in an area of the supermarket that has fallen on hard times because of a lack of pizzazz and foot traffic.

The results? So far, so good, according to Jeffrey Ettinger, chairman of the board and chief executive officer of the Austin, Minn.-based multinational marketer of such well-know brands as Hormel, Spam, Jennie-O Turkey, and Dinty Moore.

“The center of the store has become hot and interesting again because of the economy. We’ve tried to innovate against it for many years because it’s a core area for us and for our retailers,” he said in a presentation recently at the Food Industry Summit hosted by St. Joseph’s University in Philadelphia.

“What are consumers looking for in the shopping environment?” he asked. “They’re still
time pressed and don’t want to spend a lot of time in the store. They find the store layout to
be frustrating.”

For example, he said microwaveable products such as soups, meals and pasta are in different aisles of the grocery store. This identified a potential problem and a potential solution for the Hormel team. 

“The center of the store – particularly in some retailers – has not gotten much attention and wasn’t calling out new items to consumers. So we thought the center of the store was ripe for innovation,” said Ettinger

Last month, Hormel and Cannondale Associates released the results of a study that found shoppers are looking for a more efficient and effective way to shop for convenience food items. The shopper insights study found that rather than having convenience items scattered throughout the store, shoppers would prefer a dedicated convenience meals aisle where the full range of quick and easy products could be found.

“Based on the study results, we are now communicating with many of the retailers in the U.S.,” said Ettinger. “We’ve started pilots with a few of them to try and change the section. It won’t be a radical change in one day from the way the store is designed today to a complete reset, but we are encouraging them to try a sub-section at a time in a few stores.”

Research for the study involved interviewing 1,500 shoppers in-store, and analyzing more than 15 million frequent shopper card households and more than 100 million baskets. Also, they analyzed the buyer and basket interaction indices for convenience foods and a cultural anthropologist examined shopper’s grocery lists, habits and patterns in the store.

“Our goal for this research study was to develop a fact-based, shopper-designed program that would improve the shopping experience, and in turn, help retailers optimize their center store for increased sales,” said Bob Samples, director of category planning and support for Hormel Foods, in a press release announcing the program. “Americans today are eating in more, but we’re not cooking more. Instead, we’re relying on convenient meal solutions to feed ourselves and our families. By creating a convenience meals aisle, retailers have an opportunity to better serve today’s busy shoppers and grow their center store.”

The convenience meals aisle would be located in the center store, a highly profitable area for retailers, representing 88% of total store net profit.  The research found that convenience meal shoppers are worth up to 31% more annually than other shoppers for retailers and that “Best in Class” retailers generate up to 12% higher aisle sales.

“By leveraging our knowledge of the center store,  studying how shoppers interact with various products and categories, and then combining those insights with our experience delivering innovative convenient meal solutions for consumers, we were able to develop a comprehensive solution that benefits both retailers and shoppers,” said Bob Pepper, group product manager for Hormel Brands, in a press release.  “By approaching the project from multiple angles and including cross-functional disciplines, we were able to deliver on the retailer’s desire for improved profitability while at the same time providing solutions that will improve the shopping experience for the convenience-seeking consumer.”

Hormel Foods designed its convenience meals aisle solution to allow retailers to customize it to specifically meet the needs of their stores and shoppers. For example, retailers can implement the solution in small steps, starting with key adjacencies, and can integrate private label with national brands to find the right assortment of products to fit serve their clientele.

During this study, shoppers defined which products they would include in the convenience meals aisle, as well as the organization of those items within the aisle. Shoppers requested that ultra-convenient items, such as microwavable meals and microwavable soups, should be placed at the end of the aisle nearest the front of the store, and more time-intensive meals, such as boxed dinners and sides, including macaroni and cheese and add-meat-and-heat entrees, should be placed toward the back of the store. Shoppers also chose a name for this aisle: the “Convenience/Prepared Foods” aisle.

In response to the survey findings, Hormel developed a white paper outlining a convenience meals aisle to help retailers better serve convenience-minded shoppers. The full white paper is available on the White Papers tab at http://www.hormelfoods.com/newsroom/download/
default.aspx


ISI Network Study: Issues Beset One in Four Resets

By James Tenser

Nearly one in four supermarket resets analyzed over a three-year span suffered from implementation issues in a case study previewed this month by the In-Store Implementation Network. More than half the issues reported resulted from planners’ inadequate understanding of store conditions, according to an excerpt of the study previewed by the ISI Network.

The supermarket reset case study is slated to be the first released by the group, which has been advancing an educational mission around professionalizing In-Store Implementation. The report accesses a rich data set gathered from a sample of more than 2,000 supermarkets, with multiple banners, between 2006 and 2008.

Data highlights include 4.6 million hours of reset work tracked, 900,000 store visits, 220,000 issues identified, and 40,000 schematics tracked.

More than 2,000 individual users in the field, associated with 40 different reset providers.
This unprecedented data set was captured using an On-Line Reporting System (OLRS) – a Web communications portal – that was used to distribute tasks to reset providers in the field and capture compliance verification data as those tasks were completed. The OLRS application was developed by Retail Tactics, a founding member company of the ISI Network, which is also providing the case study data.

“Issues” were defined as reasons why an assigned reset task was not completed on time or to specification. By far the most frequently cited issue in the data set was “section not carried,” followed by “division elected not to complete” and “section combined with another category.” All these issues – 125,000 in the present data – may be characterized as disconnects between the reset plan and the reality on the ground.

This case study may be a promising step toward defining industry benchmarks around In-Store Implementation. Analysts are presently pursuing further insights from the data set, including:
  • Normalized labor hours on a per-project and per-foot basis
  • Project time to completion trends
  • Percent completed on time
  • Time required to correct issues
  • Cost of reporting.

Some time-series analyses are also anticipated, to explore how ongoing feedback from the on-line reporting system may affect reset performance.

A preview of the OLRS case study will be shared at the NARMS Spring Conference this month in Colorado Springs, as part of an ISI Network presentation.

With this initial case study, and the launch of a new Web portal in March, the In-Store Implementation Network has commenced a transition from defining an industry opportunity to identifying some practical solutions around professionalizing retail compliance.

The ISI Network has evolved considerably since April, 2008, when ten companies calling themselves the In-Store Implementation Sharegroup issued their working paper, “In-Store Implementation: Current Status and Future Solutions.” With more than 800 copies of the paper downloaded, the group’s leadership elected to shift to an open-enrollment model that would permit widespread industry participation.

At the beginning of the current year, the name was changed from ISI Sharegroup to ISI Network, and work commenced on a revised portal Web site (http://instoreimplementation.com) that can support interaction among members. Now with an email list topping 3,000 individuals, including a 280-member LinkedIn group, ISI Network is actively pursuing its educational mission on several fronts.

Top of the list are membership recruitment and case study development. Most of the original ISI Sharegroup companies remain involved as members of a Steering Committee, and general membership is now open to retail, manufacturer, broker, merchandising services organization, and solution provider firms who share an interest in advancing In-Store Implementation practice.

Editor’s Note: The author is Director of the In-Store Implementation Network

IN-STORE MARKETING

Coke Activates Brands at Retail with Tests of Video Media

NARMS Promotes Study of 'Return on Retail Investment'

Hormel Aims to Simplify Center Store Shopping

ISI Network Study: Issues Beset One in Four Reset
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