Todd Hale, SVP, Consumer & Shopper Insights, and George Wishart, Global Managing Director for Nielsen In-Store Services, The Nielsen Company
SUMMARY: Inspector Gadget has taken up residence in retail stores, with coupon-dispensing kiosks, Web TV cooking programs, self-checkout scanners, smart carts picking products based on grocery lists, text reminders of last minute items, and Internet sites that track purchases and analyze nutritional content. Technology is changing the rules at retail.
Reaching consumers is both easier and more complex as outreach options proliferate. With the growth of cable and satellite, TV channel availability has more than tripled since 1990. And while traditional vehicles are still vital, more immediate and ubiquitous media are taking a hold. Online and mobile video viewing is exploding and time-shifted TV is growing.
|Manufacturer-driven coupon redemption in the U.S. surged nearly 10%…|
Market-leading retailers are learning to embrace new media technologies, incorporating them into the promotional arsenal even as paper coupons enjoy a resurgence of interest. Everyone’s feeling the pinch from a volatile economy and looking for ways to conserve. As a result, manufacturer-driven coupon redemption in the U.S. surged nearly 10% in the fourth quarter of 2008, according to Inmar CMS Promotion Services.
For the year ending February 2009, Nielsen determined that more than one-third of dollar sales at food, drug and mass merchandiser stores were sold on promotion in the U.S., accounting for some $133 billion excluding coupons. Inmar determined that, while manufacturer FSI coupons represent roughly 80% of redemptions, manufacturer online coupons comprise the fastest-growing subset.
Online merchandising is beginning to make inroads at many retailers, although for some, web pages often mimic the layout and look of printed weekly feature advertisement inserts. However, many manufacturers—especially those in the health and wellness field and discretionary categories like carbonated beverages and candy—are taking full advantage of the web’s highly engaging interactivity by featuring sites with games, e-cards, activities, videos, commercials, recipes, ring tones, personalized planners, and clubs that include special discounts and reminders.
|More than 200 digital ad campaigns averaged a 32% sales increase…|
In a recent U.S. study, Nielsen measured more than 200 digital ad campaigns which averaged a 32% sales increase, $1.1million hike in short term incremental retail sales, 157% return on investment, 18% boost in penetration and 14% surge in the buying rate. Impressive results all, signaling the strength and potential of visually-exciting, content-rich, interactive digital media.
Niche players like Dollar General keep their online outreach focus narrow to enhance impact, addressing just three primary areas on their web site: pets, easy meals and store brands. Others take a different tack and adopt the posture of trusted friend and resource like the Walgreens monthly Wellness online newsletter and news service covering everything from drug interactions to seasonal health challenges to caregiver support forums.
Retailers had best hone their electronic marketing chops quickly. Waiting in the wings to take a bite out of brick-and-mortar grocery sales are two companies that excel at marketing online and are hungry to expand into food: Amazon and AOL.
Food Lion’s Bloom format encourages consumer engagement via Breeze kiosks that feature handheld scanners that enable consumers to scan and bag as they shop, see a running total and speed-up checkout. Freestanding Breeze info displays allow shoppers to check prices, retrieve shopping lists, find and print recipes, and even generate bar-coded price stickers for random weight items.
Ahold’s Stop & Shop chain deploys self-scanner and kiosk technology in many of its stores to enhance consumer convenience. Shoppers enter stores, place their deli orders via a kiosk, finish the rest of their shopping and pick-up their custom order at the deli counter, without having to queue in line.
|Offers are based on prior shopping history…|
Ukrop’s Super Markets developed the Savings Spot to leverage the value of its frequent shopper program. Valued Customer program members insert their card into the kiosk, and seconds later, it dispenses as many as eight product offers reflecting individual customer preferences based on prior shopping history.
With the declining performance of traditional media outlets like newspapers, marketers are exploring emerging vehicles which operate on mobile platforms such as social networking, texting, video and tailored promotional codes and coupons. The iPhone opened up a whole new world of more than 25,000 applications covering every interest and need—from budgeting to calculating tips to bill paying to shopping. Skeptics waiting to see if iPhones will catch on should take note of the fact that Apple can boast more than 800 million downloads and counting.
|Different media and positions generate vastly different impressions…|
Mixing it up
Not all marketing is created equal or enjoys equal impact on consumer segments. Even within a store environment, different media and positions generate vastly different impressions. Take this recent example from a Nielsen U.S. study, where gross impressions per store for carbonated beverages delivered a high of about 32,000 exposures for an endcap runway display positioned front-of-store, versus a low of barely 5,000 for a household cleaning aisle endcap.
Another look at differences by type of marketing vehicle and store location established that an in-store flyer ad provided a sales lift of 18%, followed by a slat/wall display at 17%, case stacker display at 16%, shelf coupon dispenser at 14%, endcap display at 13%, power wing display at 12%, freestanding display at 8% and shelftalker at 4%. These huge lift differences among the various displays located in different parts of the store indicate that there will potentially be big sales variations as retailers continue to deploy new marketing strategies using emerging technologies.
A word of caution, however, is necessary. Without coordination among the various technology platforms, there is the potential for adding clutter and potentially conflicting messages. A plan that has inconsistent ad space coverage on everything from the in-store radio network to the deli/produce and check-out screens may turn out to be a noisy mess.
|Expect feature ads to disappear over the next five years…|
If media diversification and proliferation continue apace, marketers can expect feature ads as we know them to disappear over the next five years. Coupons will go paperless and coupon delivery will occur in-store and in-aisle—literally at the point of purchase. Shoppers will deploy mobile devices to seek out and “pull down” messages ranging from recipes to promotions as they shop the store.
Consumers hungry for recipe ideas or product recommendations can text or “tweet” friends, and visit “foodie” social media sites and blogs for inspiration as they walk store aisles. Traditional ad formats will yield to the immediacy and brevity of vehicles like Twitter tweets, which enjoy the boost of enhanced credibility from peer group product champions.
|Embrace the best of the new and retain the best of the old techniques…|
As the media shakeout continues, marketers will be experimenting with different mixes of media and schedules. Given the wide range of consumer technology savvy and comfort levels, retailers will need to embrace the best of the new and retain the best of the old techniques. Self checkout is a prime example of this hybrid strategy. It’s great for small orders and bar-coded items, but still requires a human intervention for random weight items requiring help with PLU codes or to tweak twitchy scanners.
Even as RFID tags, audio capture, wi-fi, dual sensors, ultrasonic and thermal technology gets integrated into the store setting, employees remain a primary consumer touchpoint. Well-trained, proactive employees serve as the face and voice of a retailer, humanizing the experience as no media can. Human capital remains a significant investment area with unmatched potential for generating shopper loyalty and an impressive ROI.