Retailers as Media Platforms: Seizing The Opportunity of In-Store Digital Marketing | By Andrew Light, Shanthi Barton

  • 792 views
Uploaded on

The resurgence of the brick-and-mortar store is great news for omnichannel retailers, but it’s critical to understand how to make your offline presence an asset that you leverage …

The resurgence of the brick-and-mortar store is great news for omnichannel retailers, but it’s critical to understand how to make your offline presence an asset that you leverage effectively.

Emerging digital in-store technologies are enabling smart retailers to enhance their long-term relationships with their customers, influence transactional decisions at point of purchase, and even create new, scalable revenue streams to bolster their bottom lines. Let’s not forget that more than 90 percent of retail dollars still go through physical stores.

Retailers have responded. We are seeing significant new innovation and changing business models in pilots, test markets, and in a few select retailers. Yet, it isn’t clear to what extent these innovations are trickling into real-world retail experiences.

  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Be the first to comment
    Be the first to like this
No Downloads

Views

Total Views
792
On Slideshare
0
From Embeds
0
Number of Embeds
0

Actions

Shares
Downloads
19
Comments
0
Likes
0

Embeds 0

No embeds

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
    No notes for slide

Transcript

  • 1. Retailers as Media Platforms: Seizing The Opportunity of In-Store Digital Marketing Andrew Light VP Strategy, SapientNitro Toronto Andrew leads SapientNitro’s Strategy practice across Canada and the central and western United States, and his duties also include directing the omnichannel retail industry. Shanthi Barton Director Business Development, SapientNitro San Francisco Shanthi is a 20-year veteran in digital media and pioneer of strategies for digital media companies like Razorfish, Drive Performance Media and Microsoft.
  • 2. 113 With increasing channel complexity comes the now well-recognized “empowered consumer” challenge. We won’t beat that dead horse. Yes, your consumer is increasingly empowered by the depth and breadth of information available across mobile devices, via social channels, and so on. But there is another interesting dynamic that’s been created by all that empowerment. Consumers are increasingly suffering from “analysis paralysis,” which has created space at point-of-purchase for marketers to influence the final buying decision, particularly given the fact that 57 percent of U.S and Canadian in-store shoppers have not decided what they are going to buy when they arrive in the store.1 This increase in customer ambivalence has increased the potential ROI for advertising and marketing efforts at the point of purchase for the marketer and extended the fight for awareness and mindshare into the store aisle. Advertising strategists, media planners and buyers have historically faced a brick wall once the customer walks into a physical retail store. At that point, we have mostly relied on mobile targeting to deliver push-based messaging (not great), or re-messaging in other digital channels with the hope that a purchase wasn’t made and we can pick up the “dialogue” once the customer has left the store. It’s a compelling proposition that advertisers can buy our way in front of a customer at the point of purchase to influence decision making via sophisticated digital advertising tactics (previously only done via merchandising, packaging and event-based marketing tactics). These solutions are already in-market and generating revenue. U.S. convenience store leader Wawa has been busy incorporating digital signage across its 600- store network across the United States. Following a successful 25-store pilot, Wawa selected a partner to power its digital marketing network as part of a completely redesigned foodservice area, which features a fresh and appetizing new look. “Our new digital signage showcases our offer in a much more upscale, appealing way and moves us closer to our vision of fast casual to go,” said Howard Stoeckel, CEO of Wawa. New Consumer Behaviors and Patterns Mean New Opportunities In-Store The shopping mall has been putting up a fight lately, and it’s gaining ground against the pure-play online retailers that have been using technology to steal share for the past decade. The resurgence of the brick-and-mortar store is great news for omnichannel retailers, but it’s critical to understand how to make your offline presence an asset that you leverage effectively. Emerging digital in-store technologies are enabling smart retailers to enhance their long-term relationships with their customers, influence transactional decisions at point of purchase, and even create new, scalable revenue streams to bolster their bottom lines. Let’s not forget that more than 90 percent of retail dollars still go through physical stores. 1 Ipsos/SapientNitro 2013 survey found that 57 percent of in-store shoppers know the brand but not that precise item they will purchase, have little idea what they are going to purchase, OR know the category but not the brand of the item they are going to purchase.
  • 3. Wawa is using the digital signage displays to drive awareness for new fresh food products and to communicate relevant food and beverage options based on the time of day. Messaging is displayed on large-format screens mounted in the foodservice and coffee areas. Smart retailers have recognized the advantage they have and fast-movers are entering the digital advertising market as sellers. Why would the neighborhood grocery chain or a department store want to compete with the likes of Google and Yahoo for advertising dollars? Because the opportunity is significant. Cost and revenue benefits to large retailers (top 250 in North America) have been estimated in excess of $100 million a year. So, how does a retailer deploy digital technology? 1. Recognize That Clever Infrastructure and Technology Alone Will Not Be Enough These changes must be part of other investments to make the store more entertaining. For example, over-deploying on customer service, increasing the experiential aspect of the store (e.g., live training, taste booths and how-tos). The challenges for in-store retailing are not restricted to finding the right technology to combat digital-only threats. For example, the notion of “showrooming” is now well known. Yes, unwanted content can be blocked in a store, but that brings potential brand damage and social media vilification. Differentiation would be a better tactic to combat showrooming, such as agreeing with suppliers to make valuable edits to inventory so that it is only available in your store. Perhaps add a ring burner to the side of an outdoor grill, giving the product a new unique SKU. Marketers should consider the widest capabilities they have in their arsenal, such as over-deploying on customer service, increasing the experience with live training or taste booths, offering spot prizes, and hosting celebrity appearances. Leverage the ability to deliver multidimensional experiences: The in-store experience should not only be seen in terms of a transactional marketing opportunity. Naturally, there is the opportunity to drive increased basket size, but the in-store marketing opportunity is also a chance to create an experience, build a dream, enhance a brand, and create a desire for the future, prospective repeat visits and engaged loyalty. Similarly, the in-store experience is more than money-off coupons or price reductions, especially in categories where margins are already thin. The need for clarity of intent in the marketing strategy will never have been stronger, and the need to judge, gauge and assess ROI is as strong as ever. Stores with a physical presence have a unique opportunity to interact on multiple dimensions, such as smell, touch, feel, sound, and taste. Physical retailers need to play to these strengths and integrate their brand experiences across all of their channels. 2. In-Store Marketers Need a Deeper Understanding of the Buyer Marketing in-store can be so much more than “buy one now and get one free,” with new technology offering the opportunity to modify messages that can recognize the characteristics of the audience, their frame of mind, and even their immediate intent. Here are three ways retailers can get a deeper understanding of their customer: Targeting consumers based on shopping intent: There will be differences in experiences and customer journeys for all types of retailers, and naturally differences in in-store purchase patterns. At the core is a need to understand the consumer, the purpose of a journey and how, from a marketing perspective, to assess the value of a specific journey. Bringing together diverse sets of data sources: In order to get that deeper understanding of the buyer, retailers will need to harness and integrate data from a wide set of sources, such as their own traditional in-store records, complex and diverse external mines such as mobile network operators or third-party loyalty programs. Retailers as Media Platforms: Seizing The Opportunity of In-Store Digital Marketing
  • 4. 115 Monitor and influence in-store activity: The store visit is a snapshot of a wider journey. The packaged goods advertisers will want to drive messages across multiple stores and venues, while the retailers will want to generate differentiated propositions to make their environments more compelling than others. Data analysis and insights will be much richer by looking at the end-to-end cycle of the shopping process. 3. Create and Support a New Media Model Relevant to Your Store Environment; Support It with the Right Operational Infrastructure, Sales Infrastructure and People Retailers need to adopt a new business model that looks across more than just technology and infrastructure, but also goes deep into the operations, sales, people and culture mechanics needed to enable success. Traditional media marketing management skills may be about to become more relevant than ever. Traditional TV audience growth and rates may be flat, but they are still present. Moreover, it is still the same audience that is also walking into a store. The shift will be in understanding how to be relevant to that audience at the right moment, and thereby promotes the need for an integrated marketing strategy across new channels. A Friday from 5:00 p.m. to 7:00 p.m. in a grocery store, when customers shop for their weekends, might be a much better time to drive transactional messages on a digital screen, and thereby drive a higher media rate, for an impulse purchase packaged good (such as potato chips). The same screen in the same store, opposite the coffee shop, may run brand experience messages from 10:00 a.m. to 11:00 a.m. for those relaxing before their more leisurely daytime shop midweek. Marketers will need to understand their audience and adapt their pricing to enable access more than ever. In time, it may well be that pricing needs to be applied and customized at a store level across thousands of outlets. One example of a brick-and-mortar retailer that is using in-store media effectively is Thrifty White Drug. With 90 locations in the United States, the brand continually looks for ways to improve upon patient communication and education. Thrifty White Drug recently realized that digital signage would provide a visually appealing way to communicate initiatives such as flu shots, immunizations, patient education, automated prescription refill services, and many other programs and services that the company offers. Additionally, static advertisements with and without audio, as well as full audio and video commercials, are used to deliver relevant product brand messages and promotions to an engaged audience in the store. After a very successful pilot, Tim Erdle, executive vice president of store operations, commented that Thrifty White had installed the solution in an additional 66 locations in the spring of 2013. Conclusion In-store digital media needs to be addressed and managed proactively, and in many ways marketers need to catch up with the capabilities that the technologists have enabled. Traditional marketing competences of understanding an audience and anticipating and satisfying their needs and wants is more important and relevant than ever. Moreover, marketers need to embrace the potential of digital technologies to be highly relevant to the prospective needs of audiences, understanding the value of time, speed, mood, smell, touch, and sound that in-store experiences can deliver. Retailers as Media Platforms: Seizing The Opportunity of In-Store Digital Marketing Digital tools in-store offer another piece of data to enable CPG firms and retailers to understand – and influence – the customers’ decisions across their journey. These tools can provide additional detail to answer the crucial question as to why they bought what they bought.