Has the internet changed the nature of the way shopping occurs in stores these days? more
To a society fascinated with the process of buying and consumption, a great retail experience should be of significant importance; yet despite the fact that 90% of dollars are spent “in store,” the media are crowded with stories and analysis of “online experience” but scant mention is made of the ways in which we can improve the “in-store” experience for consumers.
If you want to see one of the reasons why shopper marketing has been carving off an ever-bigger slice of the marketing pie, just compare the number of weekly shoppers at major retail chains with the number of Americans who tune into top TV shows.
Take Dancing with the Stars and American Idol, for example. While 21 million people waltzed over to their sets to watch an average episode of Dancing last year, and Idol cast its spell on still more (35 million for the season finale), those audiences pale when compared to the crowds that pack the aisles of the big-box retailers. Costco, Walgreens, Safeway and Kroger boast weekly shopper counts of 20 million, 30 million, 44 million and 68 million, respectively. Passing through the revolving doors of Wal-Mart locations across America each week are 150 million people.
Now consider this: While TV's audiences have been fragmented by the addition of hundreds of new channels, retail has been concentrating its consumer base via consolidation. Ten to 15 years ago, the top 10 retail accounts of the typical packaged goods manufacturer represented 20 percent of sales. No more, says Peter Hoyt, executive director for the In-Store Marketing Institute. "Due to consolidation and the rise of megachains," he says, "those top 10 customers now represent as much as 80 percent of sales—more, in many cases."
It's the confluence of these economic forces over the past decade or more, says MEC Retail partner David Sommer, which has allowed shopper marketing to truly come into its own. "The dynamics have changed, and now the one place you can still aggregate a mass audience is in-store," he says. "That's a big media buy, and if you hit shoppers with an ad message, 'This is relevant,' you'll get a response that can be measured via a sales lift."
No wonder, then, that shopper marketing (the in-store appeals that take the form of shelf talkers, end-aisle displays and the newest: in-store video networks) is getting more attention than ever from retailers, manufacturers and ad agencies alike. According to a study by the Grocery Manufacturers Assn. and Deloitte Consulting, the number of manufacturers and retailers that have significant shopper marketing organizations of more than 20 people has jumped from 29 percent in 2007 to 60 percent in 2008. The study also found that over the next three years, in-store marketing activity will grow at a higher rate than any other marketing tactic. A Booz & Co. survey of consumer packaged goods marketing executives found that 95 percent plan to either maintain or increase investments in retail store media.
The argument above was restated from a recent AdWeek article - but it misses one critical point ... how do you know you are targeting the right person?
Just because you have the Law of Large Numbers working for you and no Tivo to get in the way of your message doesn't mean the old adage of "50% of my marketing dollars are wasted - I just don't know which half" still isn't in play!
What is missing is the identification of your presence ...
According to Forrester, in-store ads or "shopper marketing" does work. While only 67% of consumers pay attention to television ads, consumers aren’t tuning out ads in the store: 88% of consumers still notice in-store. The missing ingredient in making “shopper marketing” the most compelling media-buy is an ability to quantify the in-store audience.
In order to do this you need to know 3 things:
1. Who the shopper is or "Presence Identification"
2. What shopper demographic she belongs to or "Customer Segmentation"
3. And probably the most important, what her shopping behavior is or "in-store session metrics". In-Store shopping metrics captures the duration of a shopping visit, departments visited, time spent in the various departments. It provides key insights such as lost sales -- when a shopper spends time in a department/store and does not purchase.
Paco Underhill said, after doing extensive research, that the average time a buyer spends in a particular department is different from a non-buyer. This is one example of the importance of "in-store session metrics". Armed with this information you can now decide whether a shopper is deserving of a marketing message or promo. Typically 2/3rd of promos cannibalize a brand's own sales. With in-store shopping metrics you do highly targeted marketing to focus on the other 1/3rd of shoppers who matter in order to increase a brands sales.
