What Marketers Need to Know
About the New Breed of Kiosks
By Lynne Cooke
A new generation of kiosks is emerging in supermarkets around
the country. Some are enhanced with digital video advertisements
for national brands, while others aim to engage shoppers with
on-demand coupons and recipes with branded ingredients. But all
of them are giving CPG manufacturers another reason to consider kiosks as part of their marketing mix.
“Kiosks play a valuable role in the store. Their strength is to enhance the shopping experience,” says Glenn Hausfater, a consultant who advises CPG marketers and retailers.
The key to a successful kiosk is its value proposition, according to Hausfater, president of Partners In Loyalty Marketing (PILM) in Chicago. “Supermarket shopping is increasingly a chore for shoppers. So, what are they getting from the kiosk to justify spending five minutes on front of it?”
A lot can happen in five minutes. For example, Hausfater gives thumbs up to kiosks that test a consumer’s blood pressure. Typically located in the pharmacy section of the store, these kiosks display print advertisements that consumers read while waiting for their blood pressure reading (what else is there to do?). “We’ve seen very powerful lifts coming off this kind of advertising,” he reports.
A new kiosk at retail is ShoptoCook’s GoCook Center which provides meal-planning ideas for shoppers. These touch-screen kiosks are positioned along the perishable perimeter of the supermarket in the meat, seafood, produce, wine, and cheese departments where meal planning takes place. With a simple touch of the screen, shoppers can view and print recipes.
The GoCook Center can be linked to a digital screen for video clips that enhance the information provided on the kiosk about branded products featured in a recipe, or about a certain wine and cheese. For example, after the shopper has either scans a bottle of wine or inquires about wine by variety, a video clip can be triggered on the screen located near by.
Food makers take part in the kiosk by providing recipes that include branded ingredients and accompaniments. A recipe sponsorship program allows them to provide their corporate kitchen recipes, including branded ingredients, banners and logos, and printed promotions or offers on every recipe printed that includes their product. The kiosk can even print coupons for the featured brand.
“ShoptoCook essentially gives branded food manufacturers an in-store advertising and promotional media channel located in the perishable aisle,” said Frank Beurskens, president of the company based in Buffalo, N.Y. “This creates incremental, full-revenue sales by satisfying consumer needs and influencing the brand choice of individual shoppers already in the store looking for meal solutions.”
The kiosks are installed in over 200 AholdUSA divisions of Tops, Giant and Martin stores located throughout New York and Pennsylvania, as well as in the southeast in all Bloom stores operated by Food Lion/Delhaize Group.
Another new kiosk for supermarkets and other retail stores dispenses coupons at the store entrance for use while shopping. Matthias MoneyBoard (MMB) is an interactive, web-based system available in stores 24 hours a day, 7 days a week. MMB provides three free-standing touch-screen kiosks per store, each with two screens displaying 24 coupons at all times per machine (72 coupons in total). A touch of the illuminated image on the screen gives the shopper an instant coupon for a product, along with its location in the store. The instant-access unit is designed to revolutionize coupon marketing.
“Manufacturers maintain a guaranteed presence in the retail store for just 5 cents per hour for each four-color, illuminated square occupied on the system, yet there is no additional fee charged until coupons are redeemed each week,” said John T. Matthias, founder, president and CEO of the company in Woodville, Wis. “The pre-determined fee is held in an escrow account until the week’s redemption reports are finalized and approved.”
Manufacturers also control the maximum number of coupons redeemed and the coupon amount, while MMB manages all aspects of the program for them and the stores. Data is delivered via secure internet transmissions. Up-to-date reports of redemption activity are available 24/7 on a password-protected web account. Manufacturers can change, add or discontinue programs within 48 hours.
“We provide the ability to create promotions in days, not months,” said Russ Markfelder, chief financial officer at MMB. ‘We give manufacturers an advertising presence in the store, where purchasing decisions are being made. We also give them total control of their liability. By tying into the store POS system, we can monitor redemption in real time and replace a coupon when its redemption target is reached. This flexibility provides a great tool to manufacturers to introduce new products, create sales lift on existing products, and quickly sell off overstocked or expiring product. Best of all, manufacturers only get charged for performance. We don’t get paid until we have helped sell their product in the store.”
Meanwhile, MMB gives retailers a higher handling fee and
eliminates the need to send coupons to a clearing house. Retailers are paid in one week. Markfelder adds that the convenience of not having to carry or clip coupons makes customers loyal to stores
with MMB kiosks. The program is being piloted in BI-LO supermarkets in the southeast.
According to Markfelder and others, there is a gradual shift of promotional dollars from pre-printed media to electronic distribution in stores. Hausfater, the consultant, sees more kiosks in store if they prove to be effective and useful for manufacturers, retailers,
and shoppers.
“We need to figure out how to make shopping a more interesting and more useful experience by using a kiosk,” he says. “We also need to keep in mind that the kiosk audience is really the top shoppers who account for 45-50% of store sales.” (see related story in the Loyalty Marketing section).
ConAgra Uses ‘In-Store Activation’
To Reach Hispanic Consumers
By James Tenser
ConAgra Foods is convinced that reaching the growing Hispanic market in the U.S. requires tailored in-store strategies and local programs, and it’s tapping Spectra and ACNielsen data sources to better understand where and how to deliver marketing messages.
“Our goal is to make our brands into the Hispanic consumer’s brands of choice,” said Laura Zoller, director, consumer insights, Hispanic marketing at ConAgra Foods, Naperville, Ill.. “For us, it’s been a brand-by-brand, category-by-category approach.”
Zoller made her remarks as part of a presentation at the ACNielsen Consumer 360 conference last month in Palm Desert, Calif. Co-presenting with ACNielsen analyst Christopher Hammer, she outlined several activities her company has undertaken in the past year to position ConAgra brands properly toward Hispanic-American consumers.
“Being present in the community is something we view as very important,” said Zoller, who explained that ConAgra’s approach is to link culturally-appropriate advertising and grass-roots marketing with what she called “in-store activation” to attract Hispanic target groups. She said ConAgra’s multi-point Hispanic marketing programs in recent months incorporated these in-store elements:
- Sampling – In a recent partnership with Tupperware and Royal Prestige, ConAgra coordinated on-site couponing, sampling, and in-store displays. It produced Spanish-language promotional print materials to support the effort.
- Cooking Camps – ConAgra used local media to promote shared cooking experiences among the Hispanic community, and sponsored in-store family cooking events.
- Youth Soccer League Program – ConAgra combined media support with on-site activity at local playing fields where coupons were distributed to drive customers to local stores. The program was activated in selected stores with a sampling program.
ConAgra foods established what it calls its Hispanic Center of Excellence one year ago, Zoller said. From the outset, the Center identified four tasks: (1) Prioritize key brands across ConAgra’s portfolio with respect to their appeal to Hispanics, (2) Compare penetration levels of those brands among Hispanic groups with those of the general market, (3) Drive buy rates, and (4) Leverage ConAgra brands’ extensive strength in home countries.
Several brands the company identified as having particular affinity for Hispanic consumers included Act II popcorn, Chef Boyardee, Pam, Rosarita and others, Zoller said. “Act II is currently the hottest popcorn brand in Mexico,” she offered as an example.
Hammer of ACNielsen said the U.S. Hispanic population is forecast to reach 50 million by 2010, or roughly one in six Americans, cumulatively representing approximately $1 trillion in buying power. He emphasized that Hispanics in the U.S. are “an extremely diverse group,” breaking down by national origin to 57% Mexican; 10% Puerto Rican; 4% Cuban; and 29% other.
Zoller observed that these “different countries of origin dominate Hispanic marketing in different markets in the U.S.” It is well understood that the Spanish-speaking population of Miami, which is largely of Cuban origin, differs culturally from the Mexican-American populations in Los Angeles or Dallas, for example.
Hammer added that Hispanics will also differ by their degree of acculturation in American life. New arrivals to this country naturally have different lifestyle and consumption behaviors compared with long-time residents.
Among CPG marketers, “Winners are investing in local Hispanic media and activities,” said Hammer. “The best retailers are committing to this sector, and it’s not just by setting up an
ethnic aisle.”
Available data from ACNielsen, Spectra and other sources permits store-level targeting of promotional programs and merchandising, he added. He advocated what he called a “culture point model,” that begins by looking at consumption behavior first, then demographics.
It is intuitive that identical Hispanic-oriented in-store activities will
not be appropriate in every store, even within a community with a heavy Hispanic penetration. Zoller said ConAgra uses the Spectra Hispanic IQ data service to target Hispanic consumers in particular stores and communities.
ConAgra also uses the Spectra model to help target Hispanic consumers by acculturation level, Zoller said. The data helps inform ConAgra decisions on product relevance, brand appeal by brand, and the overall price-value equation.
“We ask ourselves, ‘Who is the right target population on brand-by-brand basis?’” she said.
MAY 2006
Early Efforts in ‘Shopper Marketing’
Yield Valuable Consumer Insights
By James Tenser
Call it “shopper marketing,” “first moment of truth,” or even simply, “customer marketing.” Whatever the preferred buzz word, it refers to that sought-after magic formula that converts in-store communications into brand equity and profitable sales.
CPG marketers are watching the lead of powerhouses like Procter & Gamble, Unilever, Clorox and Kimberly Clark as they advance a new vocabulary populated with terms like “in-store media,” “trip management,” “need states,” “touch points,” and something called “demand creation and activation.”
What have these pioneers found out about consumers in-store and what can other CPG marketers learn from their work?
At Procter & Gamble, this idea set is summarized as “The First Moment of Truth,” (FMOT) which is both a corporate slogan advanced by CEO A.G. Lafley and the name of a cross-functional task force headed by its director, Dina Howell. At Unilever and others, the less proprietary term, “shopper marketing” is currently in vogue.
P&G’s Howell, who already held a high profile within her firm as a veteran of its Wal-Mart account team, attained wider notoriety last August when her likeness appeared in a page one Wall-Street Journal article that reported on a shift of media spending from traditional media. The story spurred a good deal of commentary, including published estimates that $1B or more of ad spending could shift into the retail environment this year. Because this could be highly strategic, the precise dollars and cents defy confirmation, but there is little doubt that that the shelf is where the action is today.
“As our consumers’ media habits evolve, we strive to better understand the shopper and the relationship that in-store marketing plays in the broader marketing mix,” said Howell.
David Diamond, president of David Diamond Associates, a New York-based marketing consulting firm, said, “Wal-Mart TV has made the world safe for this stuff. What’s changing that’s important is it used to be funded out of promotional money with a short term outlook. Now people are really thinking of this as advertising -- real life -- that also builds brand equity.”
Needless to say, some major ad agencies, whose lifeblood is their clients’ media spending, have read a great deal into statements like these. Several have defined business units tasked with meeting clients’ requirements for in-store communications that coordinate – or at least work synergistically – with traditional advertising, consumer promotion, and trade promotion.
“I think we’re feeling an acceleration of interest within the industry in retail communications, based on recognition that point-of-sale communications or the “first moment of truth” is a critical touchpoint where you can communicate with the consumer,” said Joe Celia, president and CEO of Grey Synchronized Partners, New York, a unit of WPP Group.
Celia resists the notion that huge dollars are rushing from home TV to in-store TV. “I would be surprised to see wholesale spending reallocation happening on year-to-year basis. Industry doesn’t tend to work that way and we haven’t seen the seismic shift or change in view that would cause that.”
But he does concur that change is afoot. “I think it’s an evolutionary process, by design. People examine alternatives. Our industry is also working to develop metrics to be able to advise our clients about how best to allocate spending across all forms of media – traditional broadcast, digital media, viral marketing as well as at retail.”
Added Celia: “A universally accepted independent source of data would remove some of the obstacles to growth in in-store media if people truly believed they understood value.”
Diamond said he harbors a “fundamental” skepticism about measuring return-on- communications that should be regarded as brand equity building, even if located at retail. “If measuring in-store means you want to develop an ROI, that will never work for advertising. You can’t say it’s an investment for long term equity building and also demand ROI.”
Howell asserted that P&G has a goal of “driving consistent marketing messages across all areas of our marketing mix, to include the retail component.” She said that her company has made significant recent progress in this regard. “By applying our learnings and insights, we have been able to develop breakthrough marketing plans which delight shoppers at all touch points.”
While work in this area will continue, there are several early lessons that CPG marketers may wish to take from the published actions and statements of the big firms that have made “shopper marketing” and “moment of truth” key phrases in the industry vernacular:
- Consumers are reinventing marketing. CPG marketers and their retail partners must evolve and develop breakthrough in-store communications that connect with consumers in meaningful ways.
- A consumer's need state and receptivity are different pushing a shopping cart as compared with sitting on the sofa. Replicating the traditional ad message in the retail store is therefore insufficient. A new communications environment demands appropriate messaging.
- Measurement and accountability may be more important than ever for marketers, but the methods for measuring in-store audience are still in their infancy. Controversy remains regarding whether in-store advertising should be evaluated using methods developed to track promotional effectiveness.
What do CPG marketers and their agencies need to do to get ahead of this curve and remain in front as these changes accelerate? Chris Hoyt, president of Hoyt & Company, Scottsdale, Ariz. offered five conclusions in a recent presentation:
- Accept that the marketplace has permanently changed.
- Ensure that you have the right organization for the new marketplace.
- Throw out the old delineations of “Advertising, Consumer & Trade” both in your thinking and in your budgeting.
- Zero-base your allocations rather than perpetuating the status quo.
- Measure the results so you learn what works for your brands.
Finally, Diamond suggests that the shift to a shopper marketing focus may also prove organizationally challenging for many CPG marketing firms. “There are people who are in charge of promotion and people in charge of advertising. The people in charge of both tend to be awfully high up in the organization.”
P-0-P Hall of Fame Welcomes
P&G, Pepsi-Cola and Lancome
Three CPG marketers have been inducted into the P-O-P Hall of Fame: Dina Howell of The Procter & Gamble Co., Leslie Nagy of
The Pepsi-Cola Co., and Joseph DeLise III of Lancome.
Each year, the P-O-P Hall of Fame recognizes a select group
of consumer product marketers and retailers who have lifted their brands to high levels by using effective in-store marketing. The program is administered by the In-Store Marketing Institute,
Skokie, Ill.
Howell, Director, first moment of truth team, is a 17-year veteran of P&G. She oversees a multi-functional network of disciplines including marketing, market research, R&D, purchasing, integrated data solutions, finance and design. All areas are focused on applying consumer and retailer insights to best practices that will enhance and simplify the shopping experience.
Nagy has been director, marketing services and licensing for the
last six years of her 18-year career at Pepsi-Cola. She is responsible for all temporary P-O-P displays and collateral, premiums such as dealer loaders and display builders, neon, signs and thematic displays.
DeLise has been vice president of promotional purchasing at Lancome U.S. since 2000. He directs a staff of five P-O-P professionals who produce more than 1,000 non-repetitive items every year. He is a 25-year veteran of the graphic arts and P-O-P industries for brands such as Elizabeth Arden, Unilever, Coty
and others.
