What's in Santa's Sleigh?: Mobile Search Advertising and Color Barcodes

Ever seen the original version of Miracle on 34th Street? One of the best scenes is when Kris Kringle, taking a toy request from a child in Macy's, tells a distraught mother that she can get the toy at Gimbels, Macy's big competitor. The marketing executives take it three steps further, compiling a local merchandise directory so that sales associates can send customers to the right store if Macy's doesn't have what they're looking for. The hope, in this case, is that customers will be so impressed by the good will and helpful information at Macy’s that they will come back more frequently and spend more money there (as one happy mother exclaims).

I don't know if Macy's ever did try in the real world the strategy that worked so well for them in the movies, but I've yet to come across something similar today. In my mind the closest thing we have in the digital era is Priceline, but even with William Shatner batting for consumers, it's still missing a hefty dose of benevolence.

But perhaps a new contender is coming up on the horizon. In particular, Amazon recently announced a modern version of this Miracle approach called TextIt, a new service where customers browsing in a real retail bookstore can use their cellphones to scan the barcode on a book or other item, get its information and price, and order it directly through Amazon (if available). Not exactly the kind of goodwill gesture that Santa Claus might endorse, but one that many digital merchandisers are counting on as a competitive edge. Adweek highlights recent research predictions that mobile search advertising will have phenomenal growth in the next five years. The foundation for these prognostications is the speed at which companies are trying to develop their software for mobile phones. Better photo quality on cell phones and more standardized barcodes are the key concerns, and both are actively being addressed by multiple vendors. As if to seal the future deal with a kiss, Microsoft announced today that it had patented a color barcode licensed by the International Standard Audiovisual Number International Agency.

The beauty of the color barcode, aside from its visual design appeal, is adaptability. According to Microsoft's press release , though they can be physically smaller these multi-colored codes can be read from more places, like televisions, posters, advertisements, CDs, and computers. As a simple example, imagine seeing a print ad for a movie posted at the train station. While you’re waiting to commute in to work, you can use your phone to scan the barcode on the poster, watch a trailer for the movie and find nearby theaters and playing times without having to type in phone numbers or a ton of additional information.

As I mentioned in a prior post, some analysts have even predicted that the cell phone will be the death of modern advertising, which will have to morph into something else. Consumers are more involved in tracking and debating the value and significance of various products than ever before. Indeed, perfume blogs have garnered such consumer power that they have upended a lucrative and previously unfettered industry, leaving marketers and manufacturers with great distaste for the intrusion. Even so, the balance of digital power tends to remain with manufacturers.

While the new tracking media has great potential, it still has a number of problems. Barcodes and cell phone technology have made more inroads in Southeast Asia, but critics cite multiple standards and lack of consumer awareness and education. Microsoft hopes to use its gigantic reach to address the first problem. As for the second, consumer use is not as advanced as technological desire partly because people are unaware of the capabilities. Let’s face it: so much technology, especially the mobile digital kind, spreads when it’s picked up by the magic demographic – young users with some disposable income and a desire to be on the cultural cutting edge. But these users also move on quickly if the application doesn’t have an interesting or innovative purpose (see this great chart on the quick boredom with Twitter). Even with a recent trend towards thrift in the younger demographics, comparison shopping and bargain hunting are still more in the worldview of an older demographic.

Developers might need to think more broadly right away, rather than waiting for people to figure out new uses on their own. It's not like companies are going to hold our hands and point in the direction of their competitors until everyone gets up to speed. I have a feeling it’s going to be a while before Microsoft hands consumers a color barcoded guidebook to getting what they want. Perhaps we're better off believing in Santa.

Tags: shopping, mobile advertising, retail media

Catching up on retail media news...

Whew! It's been a while since I've had the time to sit down and write a post for this blog. Between GlobalShop, the POPAI Digital Signage contest and the usual rigors of day-to-day operations I've come across way too many articles that were neat, but would have to "wait till later" for closer study. Here are some of the more interesting things I've been meaning to post about, but haven't had the chance to:

Jesse Bove, Associate Editor for ddi Magazine and bona fide Retail Design Diva asks "What makes shoppers tick?" in an examination of some of the newest trends and techniques in customer observation and behavior analysis. It's a good introduction to some of the cool/creepy technologies on the horizon that promise to turn your everyday trip to the grocery store into something from Minority Report -- and not necessarily in a good way.

Our friends over at Brand Experience Labs announced that they completed a deal with theater advertising company National CineMedia to install AudienceGame, their audience-controlled "'advergame' which is played by theatre audiences moving together to act
as a 'virtual joystick' to control the gaming elements on the big
screen."

POPAI announced the OMA and Digital Signage Award winners at GlobalShop last week, with top honors going to Creative Instore Solution/Red Bull, Idea Plant/20th Century Fox and Drissi Advertising/Paramount Pictures. For a list of digital signage winners, check out Digital Signage News.

Last but certainly not least, RetailBulletin has had several great articles the past three or four weeks, but my favorite was this article about supermarkets reacting to anti-packaging campaigns in an effort to satisfy consumer demand for green. No, not money, the other kind of green. You know, the one Al Gore invented.

So that's what's caught my eye these past few weeks. Thankfully, to keep from falling even further behind, we're bringing in some new blogging blood, so watch this space for more frequent articles, and definitely some that take a decidedly different spin from the normal pro-retail-media rah-rah-rah kind of stuff that I'm inclined towards :)

Tags: retail media, store media, advertising

When high-tech packaging crosses the line into "retail media"

For most big CPG companies, package design almost assumes the status of "black art," and is relegated to a team of highly specialized designers and engineers who know how to get the most branded surface area out of a few the square inches that the typical product must occupy for it to be economical for retailers to carry. Consequently, we've seen some extremely creative packages crop up here and there that go the extra mile to really try and get the passing shopper to stop and take notice. For the most part, though, packages still tend to be pretty bland and generic-looking.... in fact I'm having a hard time wracking my brain to try and think of a good example of exceptional product design.

That aside, some folks are clearly thinking out-of-the-box about what they can do to make their products look more exciting and inviting on the shelf, and the New York Times just wrote a story about one such success, a new shaving gel called NXT.

While I don't know anything about the product itself, it's really the packaging that's the star, and in the already-crowded world of men's grooming products, it was ultimately this package that convinced Target to bother carrying the item (a new product from a small company, so this is no small feat!). How did they do it? The Times recounts this anecdote:

ABOUT a year ago, when Jamie Leventhal was trying to convince big chain stores to stock his new line of shaving gels for young men, a buyer for Target asked a crucial question: How much would he spend on advertising?

“I told him we would not spend a single dollar,” Mr. Leventhal said.

The buyer was stunned until Mr. Leventhal pulled a prototype out of his briefcase. The product, called NXT, is sold in an arresting triangular container that lights up from the bottom, illuminating air bubbles suspended in the clear gel. The plastic is tinted blue, and when the AAA batteries in its base are lighted, the whole thing looks like a miniature lava lamp or a tiny fishless aquarium.

The novelty of the light-up container worked, and NXT’s shaving gel — as well as its after-shave and face wash, similarly packaged — will hit the shelves at Target this month.

To call attention to themselves, the products, which are aimed at 18- to 24-year-old men, will glow on the shelves, inviting customers to pick them up. Every 15 seconds, a light-emitting diode (LED) in the bottom of the container flares on, stays lighted for a few seconds, then fades out.

The most interesting part of the whole story (to me) is that Leventhal identified advertising as a problem, and not a solution. Thus, rather than dump a whole bunch of money into advertising the product in the "usual" places (on TV, print, radio and the Internet, all of which require dozens to hundreds of individual ad buys for maximum coverage), he instead spent his money on getting his product noticed at the one place where it really counts -- at the store, where you can actually buy it. Further,

While most brands want to be placed at eye level or higher, Mr. Leventhal said the ideal shelf location for NXT is lower. “When you look down at them it’s more dramatic, so what I’m doing is going into retailers and saying, ‘Let’s take the less valuable real estate on the shelf and make it more valuable,’ ” he said.

So the package is even more appealing to retailers who vary their slotting fees based on shelf location (which is pretty much all of them these days).

I think NXT is probably going to do well thanks to their in-store strategy, even despite their lack of traditional advertising. However, now the bar has been raised. I'm pretty confident that Target isn't going to want a dozen different products blinking up and down each of their aisles, and for brands that are already spending a lot on advertising, the additional packaging costs for this type of gimmick may be prohibitive. But considering that hundreds of new brands are launched every year -- many from smaller companies that don't have the budget of a Unilever or a P&G -- I expect that we'll see a lot more creative packaging-as-promotion ideas in the future.

Tags: retail media, marketing at retail, NXT

Guessing the impact of mobile media at retail

I've been watching a conversation at RetailWire about mobile device integration develop for a few days. It seems like the data is finally in and most opinions are settled, and I wanted to draw some attention to what the folks in the discussion -- arguably some of the better-informed, savvy retail analysts and consultants out there -- are saying about the future of mobile phones and devices for the typical retailer. To begin with, Amanda Ferrante, Assistant Editor for the website Retail TouchPoints, asked what seemed like a simple enough question: Within the next five years, what percentage of Americans will have used mobile devices as part of their shopping experience?

Surprisingly, as you can see from the chart, 40% of those who responded think that within five years, at least 60% of shoppers will be using mobile phones to aid and improve their experiences. Almost another 30% of respondents think that it 40-60% of shoppers will do so. No matter how you slice it, these people think that mobile integration is going to be big, soon.

I'm not quite so sure. Yes, I've had a WAP-capable phone since 1999, and I clearly remember trying to do some comparison shopping while at a Barnes & Noble store. Most clearly, I remember the bewildered look of the clerk as I tried to explain that bn.com was selling the same book for less, and I wanted the lower price. Needless to say, the five or six lines of text on the tiny black-and-white screen wasn't the best visual aid to help make a compelling argument.

Anyway, the point is that I've been hoping for better use of mobile devices by retailers for a while. And despite nearly a decade of technological advances, trying to use mobile in a store today isn't much different than it was in 1999. Sure, the mobile Internet is now faster, prettier, and generally more like the regular Internet than ever before (heck, on an iPhone it is the real Internet). But very few are using their devices to try and connect the virtual and real worlds, which I think is a major component of all of these retail-oriented programs I've been reading about and waiting for.

Will mobile devices become a big part of the shopping experience? Sure. We all have them. They keep getting more useful (we can use them as phones, computers, GPS tracking systems, and even payment devices right now). And for the most part, they work pretty well. But in 5 years I expect things to look much the same as they do now: people carrying around gadgets, stores talking about using said gadgets to get better access to the customer and provide better service, and deployments of useful and usable in-store mobile integration systems still very few and far between.

Tags: store experience, retail media, mobile marketing

Will Starbucks's $1 cup o' joe help or hurt?

So by now of course everyone has heard that after besting Starbucks in the taste category (according to Consumer Reports, at least), McDonald's is planning to bring barristas and high-end coffee machines to a good number of franchise locations this year and next. Gearing up for the new competition, Starbucks has decided on a decidedly low-tech approach: compete on price. While the company has always offered an off-menu "short" coffee (what everyone else would just call "small") for those who knew to ask, they'll now be pushing the product for a mere dollar or so as a test in a number of key locations. As Visual Store tells us:

"The test will be conducted in many of its Seattle-area stores, though the retailer did not say how many stores are part of it, whether it’s considering a similar promotion for any other products or whether any new test markets are on the horizon.

"A Starbucks spokeswoman said the test 'is not indicative of any new business strategy.' Among its rivals in the suddenly heated-up coffee wars, McDonald’s sells a 12-ounce cup of premium roast for $1.07 and Dunkin' Donuts sells a 10-ounce cup for $1.39. Starbucks' normal price for the 'short' cup had been $1.50.

"'Testing is a way of life for us, as we are constantly looking for new ways to connect with the customer and provide the best Starbucks experience,' the spokeswoman said."

Considering that McDonald's is known for low-cost fare (on top of having great-tasting coffee, apparently, I wonder if this approach is something that could actually work for Starbuck's. On the plus side, their product has virtually zero marginal cost -- I mean, how much can a few ounces of plain ol' coffee cost to make, especially when the company controls the entire supply chain and manufacturing process.

On the other hand, though, as many people go to Starbucks for the atmosphere and image as they do to feed their caffeine addictions. For them, making the shops extra-crowded with lines full of people waiting for their $1 cups might make the trip less enticing.

Having started out upmarket, my guess is that trying to grab a larger slice of the low-end market is at best not going to generate a lot of additional income, and at worst could alienate their core customer demographic or even sully their finely-honed brand image.

Tags: starbucks, retail media, marketing at retail

Kroger and Nascar team up for in-store blitz

According to MediaPost, Kroger and Nascar are gearing up (no pun intended, honestly) for a major in-store marketing push, with Nascar providing POP displays, buying screen time on the digital signage network and even branding packages for dozens of different branded goods in 2,500 Kroger stores. The purpose of the event will be to celebrate the 50th anniversary of the Daytona 500, Nascar's central event.

As you might imagine, branding packaged goods means that Nascar isn't just working with Kroger on the deal. They've made arrangements with General Mills, ConAgra, Kellogg, PepsiCo and a bunch of other companies to feature the Daytona 500 50th anniversary race logo on products in Kroger stores, all starting this week.

Interestingly, one major reason to work an in-store marketing deal is because Nascar fan demographics are starting to shift. About 40% (and rising) of Nascar fans are women, and this campaign is seen as a way to better reach that part of their audience as well as promote the brand to more Kroger shoppers (like most grocers Kroger skews to women too).

I have to say I'm impressed. This is a pretty savvy move, even for Nascar, which is known to have run some clever campaigns in the past. I wonder if they'll have any way of measuring the discreet elements of the promotion to see which work and which don't. Given the quantity of products that will be branded and the fact that there will "only" be 2,500 stores running the campaign, it doesn't seem like standard-issue split tests will be viable. Likewise, if they want to go for maximum exposure at all costs, they likely won't want to limit the amount of marketing in any given store. Thus, it'll be hard to figure out how much of an effect the branded merchandise has versus the branded fixtures or digital signage ads.

Or, given how massively profitable Nascar and related companies like ISC are, maybe they just don't care :)

Tags: retail media, digital signage, marketing at retail

Will retailers look to the Internet for clues to success?

According to a new report released by Datamonitor Plc (and as reported by the Wise Marketer), "retailers around the world are hoping to win back lost market share by making their customers' shopping experiences a little more meaningful - and even theatrical - with emphasis placed on the sensuous elements of an in-store shopping trip." Of course this should come as no great surprise to those working in retail design and marketing, however the report's summary identifies a few key trends that, at least upon my initial cursory analysis, don't quite fit with what my customers and colleagues have been telling me recently.

The summary leads off with the notion that, "the next step in the battle to retain customers is to streamline the
buying experience, bringing it more in line with Internet shopping in
terms of ease and speed of transaction." While most retailers -- especially big ones -- do constantly try to optimize checkout lanes, reduce overall transaction time, and generally improve the part of the experience where the customer has to pay for stuff, in all other parts of the store retailers have been focusing on ways to make bricks-and-mortar less like the Internet, not more. The report notes that as tracking devices become more reliable at identifying a shopper's race, gender and age, retailers will be able to beam targeted ads and messages to nearby digital signs in hopes of catching their attention. So ok, maybe stores will start experimenting with Internet-style banner ads. However, where experience really counts, there's still no topping the bricks-and-mortar store.

Looking for a new guitar? Want to try on a pair of shoes? Is the Corinthian leather really that much nicer than the brushed vinyl? There Internet still lags far behind the real-world experience when it comes to examining/analyzing anything that can't be captured accurately in a photo or two. Lots of really innovative work going on inside the store these days tries to highlight the advantages of traditional commerce, and increasingly, hybrid commerce.

Of course, where the Internet excels is in instances where the customer can benefit from a very large amount of information, the ability to compare multiple products at once (for both price and features), and see reviews from (presumably) like-minded shoppers. And in my experience this is where retailers have been putting more effort lately. In an effort to combat Amazon, Borders has had kiosks in-store for a while, and Barnes and Noble is starting to follow suit. Best Buy and Circuit City have had product info/comparison kiosks for a few years, and recently I've even seen department and home furnishing stores get into the act.

While the Datamonitor study cites POS, RFID and proximity sensors, the key driver (which they also mention) is most likely to be mobile, or perhaps more accurately, a combination of local in-store kiosks, Bluetooth/WiFi beaconing, and mobile Internet, all delivered to a shopper's own handset and in-store digital signs. By letting shoppers access the same kind of information that they'd be able to get over the Internet, retailers can help level the playing field with e-commerce while still pushing native advantages like allowing shoppers to interact with products before buying them.

Giving shoppers the option to get information on their mobile devices forces retailers to give up some control (since the mobile devices come in all shapes and sizes, have differing capabilities, and of course can access content outside of the retailer's control). However, offering the service in the first place means that retailers can still control some of the content and marketing (as opposed to none), can provide for deeper interaction (by using digital signs as big display screens, or letting users snap a picture of an item's bar code to look up information on it, for example), and can help build customer loyalty in a highly value-added, purely opt-in fashion.

Tags: digital signage, retail media, store experience

Digital signage owners should look for the fine line between ambient and not

Digital signage gets a lot of lip service these days because like other forms of POP these screens can deliver marketing messages to shoppers while they're in a buying (or at least shopping) mode. The allure of being able to advertise so close in both time and space to where a purchase decision will be made makes the store a lucrative target for advertisers savvy enough to use it to its fullest potential. Unlike most other forms of POP, though, digital signs have a few other things going for them that make them unique, most notably that they can use both audio and animation to grab a shopper's attention.

While the marketing possibilities abound, there's a significant problem with a lot of today's in-store networks: they can be pretty annoying, for shoppers and employees alike. Building out an in-store media system that's effective while remaining unobtrusive is tough, even for marketing and merchandising experts. That's why this blog entry from the guys at Motorola (courtesy of this post from Experentia) caught my attention this morning. While Motorola is focusing on ways to create unobtrusive, ambient displays for the home environment, in reality they could be testing their techniques in stores as well. They note that their effort revolves around solving two fairly complex problems:

Over the past few decades many researchers have built devices that use light, color, sound, or motion to convey information about people, activities, and places. These devices let people see information at a glance, without the need to go to another device or navigate an interface.

...There are two big challenges in this space from a research perspective. The first is to create displays that are truly ambient and don't interfere with the home environment. We want to ensure that we can provide useful information without distracting people from their home lives. The second challenge is all about finding the most useful information sources for these displays. Obviously, the two are closely tied together and are a big part of our research into ambient communications.

The displays they favor aren't necessarily traditional big, flat panels, but instead encompass a broad range of devices from simple colored lights to small embedded screens. The display of a particular type of information is optimized for each device.

Visual clutter and a competitive POP environment will make ambient media a tough sell in retail right now, but as more retailers tighten down on what will and won't be allowed in their stores I'd expect these techniques to become more popular. I also expect to see "traditional" digital signage systems become more integrated into the retail environment, and the research being conducted by Motorola (and others, surely) will likely yield content creation and optimization techniques that will allow these systems to behave more like a part of the store instead of a bolted-on appendage.

To truly be effective, though, ambient media still needs to be noticed, even if it's typically in the periphery. Perhaps retailers will train shoppers to mentally correlate images, shapes, colors and sounds with the different types of information that might be displayed. A retailer that settled on a standardized set of visual and audio cues to help visitors connect with their in-store media would have the advantage of being able to quickly yet unobtrusively connect with regular shoppers. The problem of course, is that infrequent visitors would be unfamiliar with the cues, and if the media is a bit too ambient, would thus be more likely to tune it out entirely rather than be engaged by it.

Tags: ambient media, digital signage, retail media

P&G redefines "ad spend" to include in-store media

While P&G has been shining a spotlight on their plans to increase their presence inside stores potentially at the expense of traditional media, the news from AdAge today is that they're taking the plan so seriously that they'll be restating 11 years of ad-spending data in an effort to align their past marketing expenditures with their new terms and plans. AdAge speculates that the new restatement has as much to do with the company's internal goals as it does with the firm's share price, which has stumbled due to lack of organic growth and a slipping ad-to-sales ratio, the primary measure by which its growth was measured throughout the 90s and early this decade. Here's the quick summary from the article:

In-store advertising accounted for "the bulk" but not all of the increases, she said. At the same time, P&G subtracted the pay of many of its own marketing executives from the reported number. That reduced ad spending by as much as $163 million in 1998, when P&G apparently had little in-store advertising to offset the salaries and benefits

In all, P&G's restatement added $349 million to 2006 ad spending, with much smaller adjustments in other years, though Sanford C. Bernstein analyst Ali Dibadj believes the differences between the old and new definitions could have boosted P&G's reported 2007 outlays by $350 million, too. P&G said it hadn't calculated or disclosed the 2007 impact.

Essentially, the company added in budgets for in-store advertising (which it does a ton of), and removed the salaries and benefits of its marketing and advertising employees, essentially highlighting external and media-related expenses instead of more nebulous internal ones. The new numbers indicate that P&G has been spending about the same percentage of its sales -- roughly 10.5% -- for at least the past decade, as opposed to the last round of figures that indicated the firm was reducing its overall ad spend. Unfortunately, though, AdAge notes that even with these changes the firm still doesn't include consumer promotion spending as part of advertising, so we still don't have a complete picture of what the world's largest advertiser is really doing.

So why is it so important to know anyway? Well, as the article notes, "P&G's figures in the past 11 years show a very high statistical correlation (0.78) between ad spending ratios and organic sales growth under the old advertising definition, and an even higher one (0.87) under the new definition. For the past five years, however, the new ad definition shows a much lower correlation to sales growth than the old one." Consequently, investors like to see a slightly increasing (or at least steady) ad spend ratio, since that should imply higher (or at least steady) sales in the near future.

We know that P&G wants to continue winning that all-important First Moment of Truth on the sales floor, and given media fragmentation and the difficulty of reaching so many different mini-demographics with ad messages these days, it looks like they'll be bringing their A-game to the sales floor, which makes a lot of sense to me. Whether or not it will improve their overall performance as they shift more attention to retail media remains to be seen, but if nothing else, this looks like a really solid hedge in the age where TiVo and the Internet are making traditional media buys more speculative and often less successful.

Tags: retail media, P&G, in-store advertising

Would your store look good on the silver screen?

That's what experience design buff Adam Lawrence asks in a recent post to his blog, Work * Play * Experience. Specifically, Lawrence ponders what kind of insights we can learn about experience design by literally changing our perspective, and walking through a store/room/building looking through a camera. His advice: get a video camera and walk through your venue filming. By using only the camera viewport for navigation, you'll be drawn to details that you'd probably miss if walking through normally. As an added advantage, you can review the film later, pause, rewind and even invert the image to look for other flaws, details and areas that could use some improvement.

The idea stems from a technique used in film production. A good director knows that by looking through his viewfinder he's seeing what the audience will eventually see. A novice director, on the other hand, will watch the scene as it unfolds right in front of him and will thus mentally includes extra "stuff" that might make the scene better or worse, but will never make it onto the big screen. The idea extends well into a retail environment, especially for merchandising and retail marketing experts who often visit stores. Predisposed by years of experience to look for certain things -- shadows, lighting, traffic patterns and the like -- even a good retail designer can miss obvious flaws and details because they're outside of the scope of what he's looking for. By forcing the designer's perspective to change by using a camera viewfinder, it's more likely he'll look in different places and notice different things because there are fewer expectations of what the environment should look like.

Lawrence also recommends doing the same thing on your knees or in a wheelchair to get an idea of what a wheelchair-user or even a child's perspective of the same space might be. This is especially good advice for store designers whose primary customers are children and their parents. What might look good for one set of (physically similar) shoppers could be less attractive or even intimidating for another.

Tags: store design, retail media

Product packaging takes center stage

I think there's some unofficial rule that says "when the New York Times talks about it, you know it's news." So needless to say, this article about the new importance of product packaging strikes me as something important to talk about. I for one have always been a sucker for packaging. Your company has a reputation for killing puppies and your products could be lethally toxic, but if you put them in a cool, shiny package, I'm going to be drawn to them (thankfully I don't often buy them, but seriously, the packaging can't do all the work).

Apparently Kleenex, Pepsi and a host of other big CPG manufacturers have figured this out, as they're all starting major packaging reworks in an effort to capture the imaginations (and paychecks) of more shoppers. Kleenex is abandoning it's iconic (and cheap to produce) square boxes for a new oval shape hoping to appeal to your inner interior designer. Coors has new beer bottle labels that change color when the beer has reached its ideal temperature (granted you'll still be drinking Coors -- no miracles here). But my favorite example has to be Pepsi, who will be changing the design of its Mountain Dew bottle a dozen or more times this year, all in hopes of attracting more attention on the shelf. Here's my favorite part of the article:

Laurent Nielly, who heads packaging innovation for Pepsi in North America, said young people -- Pepsi’s central audience -- have shorter attention spans than previous generations, so bottles and other containers have to change more often. Pepsi is experimenting with the designs on its Mountain Dew bottles, selling aluminum bottles covered in graffiti-like designs that will be changed 12 times from May to October. The bottles are sold only in eastern Virginia now, but the soda maker may expand the approach if sales of the bottles go well.

If products aren’t spraying consumers, they may someday be talking to them.

Some companies are studying technology to put a computer chip and tiny speaker inside a package. This idea might be particularly useful for big companies like Unilever that want to cross-promote their various brands. So a package of cheese could say “I go well with Triscuit crackers” when a shopper takes it off the shelf. As the costs of the chips come down, marketing executives said this and other technologies would appear more on shelves.

The mental image I get is pretty amusing, but one could also imagine the aisles of your everyday supermarket becoming much more noisy and annoying. Still, the inevitable march of progress suggests that such innovations are a virtual certainty -- at least until customers rebel against those overly-helpful packages of cheese and Triscuits.

Tags: retail media, packaging, marketing at retail

Nielsen study reveals four different shopping mindsets

As usual, RetailWire has another great discussion going on, this time about a recent Nielsen study which describes four different "mindsets" that consumers may experience while grocery shopping. As Tom Ryan, the discussion's leader notes, "knowing the differences can help brands and retailers better target customers by category." The four modes are:

• Auto-Pilot - Shoppers grab 'n go. Typical categories: margarine, mayonnaise, bottled water, nuts, coffee, popcorn, carbonated soft drinks, hot cereal, cheese and cold cuts.
• Buzz-Activated - Shoppers are open to buzz and engaging advertising. Categories: energy and sports drinks, chocolate, ready-to-drink tea and yogurt drinks.
• Variety-Activated - Shoppers seek new tastes, new formats. Categories: cookies, salad dressing, chewing gum, salty snacks, breakfast bars and cold cereal.
• Bargain-Activated - Shoppers compare prices and hunt for promotions. Categories: canned tuna, canned tomatoes, canned fruit and pasta sauce.

These mental contexts describe not only how the shoppers think, but also how they act, respond to different kinds of in-store promotions, how they navigate the store, and how they make purchases. While this kind of customer segmentation could certainly yield interesting data if used to categorize shoppers on every trip (e.g. with the help of a swiped loyalty card to link different shopping trips and baskets together), as many in the discussion noted, it's not necessarily the most useful way to divide up shopping habits. My favorite comment from the discussion came from Herb Sorensen, the Global Scientific Director for Shopper Insights at TNS Sorensen. Here's his take:

We found that when we let 75,000 shoppers in three different major supermarket chains sort themselves into groups, there ended up being three groups: quick trippers, fill-in shoppers, and stock up shoppers. No surprises there, and this was based only on a selection of behavioral characteristics (walking speed, length of trip, number of items purchased, etc. - hierarchical cluster analysis) and no attitude or demographic measures.

The valuable part of the finding was that six categories were purchased in quantity by all three groups; another half dozen were purchased mostly by the second two groups; and a final half dozen categories were purchased predominantly by the stock-up shoppers. This makes possible a rational scheme for merchandising a SELECTION of these 18-20 categories in an intuitive (for the shopper), instinctual manner.

So rather than sort by basket contents or mental context, Sorenson found that a natural segmentation came from the shopper's needs. Moreover, in this case that segmentation correlates very nicely with trip duration, which gives marketers even more to think about when trying to attract the attention of these various groups. Sorensen's final thought on the matter is telling: "Too many segmentation schemes are too complicated and too intellectual to allow practical execution on the sales floor." I think we may overlook that from time to time, as we become ever more engrossed in collecting and tabulating data. While deep wells of knowledge about individual shopping trips can be extremely useful, it's all for naught if no practical application can come from it.

Tags: shopper segmentation, retail media, retail advertising

Wal-Mart to provide some in-store media measurement data

Sorry for nearly month-long posting hiatus on this blog. I've been pretty good about keeping up with the WireSpring Kiosk/Digital Signage Weblog, but that came at the expense of posting here (and to digital signage news and kiosk news) less frequently during some serious busy times.

Fortunately, I can kick things back off with a bang, since Wal-Mart recently announced that they would be releasing some retail media tracking data as part of a larger project with Nielsen In-Store to measure in-store media consumption and effectiveness in about 1,000 of its US stores, and that's seriously big news for the retail media industry. Apparently, the company's initial results with Nielsen's PRISM in-store tracking system were determined to be 76% accurate (via cross-checks with in-person audits), which was a better than expected result. Tweaks to the system have supposedly raised accuracy to about 85%, which would be pretty impressive for a fully automated system, and were good enough for Wal-Mart to commit to a larger deployment of the system.

Considering how many have bemoaned the lack of accountability and effectiveness of traditional media channels recently (myself included), many are hopeful that the results of such a wide-scale study will indicate that retail media is better at connecting with consumers and communicating brand messages. Of course, if it turns out that's not the case, we'll be in for a rough time as marketers again scramble to find something that works. Not that I think that will be an actual problem. Our internal, customer-provided (and thus potentially tainted) data clearly indicates sales boosts and high satisfaction scores correlated with retail digital media networks.

At the DSE show last week, Nielsen In-Store's George Wishart noted that CPM (or gross impressions, or something similar) is likely to be the de-facto standard for media measurement and pricing for the foreseeable future, as that's what media planners are most comfortable with. Of course, Nielsen's PRISM system, which relies on simple infrared scanners to essentially measure store traffic at different points, is suited for only capturing this particular measurement. On the other hand, while more sophisticated measurement systems that can do things like eye-tracking, gaze-tracking, and idleness tracking could generate more precise measurements, without something to compare against, retailers and marketers would have little ability to actually use the data (not to mention the privacy issues that come with that level of tracking).

As ususal, RetailWire has some good discussion on the subject, so you might want to check that out as well.

Tags: digital signage, in-store media, retail media, Wal-Mart, PRISM

Re-thinking retail design to address consumer self-service

A few weeks ago SelfServiceWorld published an article on the "new rules" of retail design. The crux of the argument: "New technologies make it possible, for the first time, to reach those individual customers with individual experiences. Digital signage, self-service — and, perhaps most importantly, the rise of multi-channel retailing — are demanding a new holistic view when it comes to the design of in-store experiences."

As I read through the rest of the article, which talks about retail media, shopper traffic monitoring and even shelving, I couldn't help but think: the rules are still the same. Ever since that first shop keep decided to put a sign outside his door advertising the arrival of fresh produce, biscuit mix or bolts of fabric, the rules have been largely the same. Make the store pleasing to the eye, ensure that shoppers feel comfortable, and (in the US at least), make sure that there's plenty of room to navigate. While there are arguments both for and against making products easy to find and convenient to purchase right away, these are more merchandising questions rather than design ones. Likewise, the addition of digital signage systems and other in-store media augment, not replace, current design considerations.

On the self-service front, there are basically two categories of devices that impact store design. The first are those machines that improve the store experience by making a hard process easier. I'd place self-checkout lanes, price lookup terminals and product information kiosks into this category because each provides shoppers a way to perform a standard in-store action more quickly and with less hassle than before. However, in all of these cases while store design might have to be modified slightly to make optimal use of the technology, they certainly don't require dramatic changes. The second category of self-service devices gives shoppers access to new services that they might not have had before. Loyalty program kiosks and product extension/virtual shopping terminals go here, because these kinds of activities are generally not available otherwise. These technologies have the potential to be quite disruptive when properly integrated into a store's business and design plan, and I could see the case for making significant changes to a store's layout if management thought it would drive business via these devices.

With everybody from Wal-Mart to Victoria's Secret constantly trying out new designs in an effort to improve the in-store experience, it's clear that there's no sure-fire method for winning over customers. Between changing tastes, new and diversified product/service offerings and the fickle nature of shoppers in general, the best we can do is try and keep up with consumer trends while making stores more enjoyable to navigate. While new retail media services can make the shopping experience better and even more fun, to those who have already been exposed to the fine art of store design, I think they're more likely to inspire ideas of evolution rather than revolution.

Tags: store design, retail media, merchandising

TNS buys Sorensen to step up in-store media measurement efforts

Media Buyer Planner notes that market information specialist TNS has purchased Sorensen Associates, the makers of PathTracker, video analysis software and other low- and high-tech solutions for retail media tracking and efficacy studies.

The combined company should be able to give the recently-created Nielsen In-Store a run for its money, and it certainly looks like the retail media measurement market will continue to be a hot segment through 2007. Part of the excitement comes from the In-Store Marketing Institute's PRISM measurement initiative, the first data from which we should be seeing shortly.

Since measurement is always the subject of great debate, multiple large companies have the opportunity to establish themselves as mindshare leaders, so TNS's acquisition of widely-respected Sorensen makes a lot of sense. Given that more established players means more ways to determine the efficacy of any one of the players, I certainly hope that the newly combined TNS/Sorensen can give VNU's Nielsen In-Store a run for its money.

Tags: Sorensen Associates, retail media, in-store media, TNS

Should the pre-shopping phenomenon affect retail marketing plans?

Over at RetailWire Alan McClain did a nice writeup of a presentation by Deloitte & Touche's Pat Conroy did at the NRF this year. The most interesting piece of the whole thing:

A key finding of the survey was that 66 percent of store visits this holiday season were not influenced by advertising and marketing. Mr. Conroy said this is consistent with previous studies and shows that, to win shoppers, retailers need to deliver consistent shopping experiences and fulfill brand promises. In other words, previous shopping experiences are more important than advertising messages.

Apparently, in an effort to save time and make shopping more efficient, more people are engaging in so-called pre-shopping techniques, like searching for a product or store information online before actually visiting the store. In fact, 61% if those surveyed by Deloitte did this kind of thing, which obviously means that push-based advertising and marketing takes a back seat to research (to some extent) in these cases.

The point that McClain raises at the end of this is whether retailers would be willing to take some portion of their traditional advertising budget and spend it more on cultivating customer relationships and improving the in-store experience. Obviously most retailers are hesitant to make "cuts" in t heir marketing budgets, but I think in this case most would need to be convinced that it would be more of a reordering of marketing priorities, and re-purposing of funds, maybe even by adding some portion of the new customer service and CRM initiatives into the marketing budget.

We've heard lots of stories before about shopping being an experience, a destination or a pastime. But the research presented by Deloitte suggests that some times, a shopping trip is more like a job or a task, where some analytical research at the beginning of the process can yield better results (in terms of total time and money spent), without much of an emotional appeal during the pre-shopping process (which, since it limits the amount of "actual" shopping time, also reduces the emotional component of the shopping trip itself).

I'm still of the opinion that most shopping trips can be broken down into one of these two categories (e.g. either "pastime" or "task"), however it also seems likely that elements of one can seep into the other. For example, shopping for a high-def TV, something that can only really be considered a non-essential luxury item, is going to have some emotional toll. Shoppers will visit one or more stores not just to look at different screens and check prices, but also to pick the brains of store employees, check out any necessary accessories, etc. Considering how big of a purchase it is, though, those same people will go home and do research on line, looking at customer reviews and competitor pricing before making a purchase decision. In this case, the "shopping" portion of the purchase process is still largely experience-driven. The "buying" portion, however, is more analytical in nature, and is thus more prone to the effects of pre-shopping (and maybe even post-shopping) research.

Tags: retail media, in-store experience, shopping, retail marketing

Experience design is not about brand experience

There's a good post (and even better comments) at Adaptive Path focusing on the difference between experience design and brand experience, and why so many people relate the two (when, the author suggests, they don't have anything to do with each other). The main thrust of his argument is basically that the word brand, "will always be about the impression companies want to make, and are by their nature an 'inside-out' proposition — a company figures out its brand and what it means, and does what it can to communicate or otherwise impart that message to people. Brand always starts with the company." On the other hand, "experience... needs to be about the people. What do they want to accomplish, achieve, do? For experience to succeed, it must start with the person, and from there, impress upon the company. 'Experience' is outside-in."

The inside-out versus outside-in concept fits well with my own attempts to figure out why retail marketers do the things that they do. For private label companies, the brand is everything: it's the stores, it's the people, it's the merchandise. But as the Adaptive Path post suggests, focusing on the brand would yield a totally "outside-in" approach, which wouldn't produce a very good experience for the average customer. It might be attractive, visually appealing, and so on, but wouldn't do a very good job of focusing on the customer's needs.

On the other hand, retailers that sell merchandise from multiple brands have a different problem, since they have to balance their own brand with the brands of all of their suppliers. The best retailers recognize the problem and try to adopt the "outside-in" experience approach that the article talks about, realizing that otherwise, they'd just be competing for attention with all of the "inside-out" branded goods.

How these realizations translate into actual design elements and innovations is different for every retailer (or at least that would explain how multiple retailers in the same category can have vastly different but still generate pretty good experiences).

Tags: store experience, experience design, branding, retail media

Iris scanning system IDs you without your knowledge

Minority Report lovers, rejoice! Soon all of the technology that you swoon over and refer to incessantly will be a reality, at least according to this article in LiveScience referring to a more advanced kind of optical iris scanning. According to the article:

A public iris scanning device has been proposed in a patent from Samoff Labs in New Jersey. The device is able to scan the iris of the eye without the knowledge or consent of the person being scanned. The device uses multiple cameras, and then combines images to create a single scan.
Iris recognition is a biometric identification system that requires a high-resolution picture of the irides of the subject's eye. Pattern recognition software is then used to match that picture against future iris scans.

Of course, that's a big problem -- right now, just for privacy advocates, but eventually it will become obvious that maybe it's not such a good idea to be immediately recognized and have your every movement logged. Granted, there's a long way from filing a patent application to actually having a commercially available product that does what it's supposed to, but apparently a similar system has already been tested with a reasonable amount of success, and given the variety of lucrative uses and abuses that such a system will allow, there's no doubt that it will continue to be refined.

Tags: iris scanner, Minority Report, retail media

Shoppers showing signs of tunnel-vision

IGD just published another report on the state of shopping, and according to this summary at RetailBulletin, more shoppers are engaging in "selective shopping" techniques to cut down the amount of time they spend in stores. The authors cite increased time pressures as the primary driver for this kind of behavior, so it would seem like the greatest implications would be in grocery and dry goods stores, where most of the shopping is out of necessity, and not necessarily for entertainment purposes. Some of the other key takeaway points:

• 35% of shoppers visit only the aisles which they believe have the items they need, compared with 30% in 2003
• 25% of shoppers were willing to follow the in-store layout along each aisle, down from 28% in 2003
• 4% of shoppers take a haphazard approach and wander round aisles at random. This was up from 8% in 2003
• 25% are guided, and visit each aisle, regardless of whether they needed anything.
• 28% took this approach in 2003
• 35% are selective shoppers and only visit the aisles which they believe have the items they need. The figure in 2003 was 30%
• 26% are systematic, and follow the pattern of the aisles, unless they know the aisle contains nothing they need. 34% took this approach in 2003

The report's author, Julie Starck, a Senior Business Analyst at IGD, made the interesting conclusion that, "these findings challenge the traditional perception that shoppers can be 'pushed' into seeing new products as they wander round the store. Many consumers will simply not see new products unless they are in aisles which are already on their mental map of their in-store journey."

Aside from locating new products or promoted items in key locations where simple math dictates that increased foot traffic will yield increased product exposures, these numbers also illustrate the importance that store layout, product packaging and retail media systems can have as shoppers become more focused on getting in and out of the store quickly.

Tags: store planning, retail media, shopping patterns, foot traffic

RetailWire discusses the potential of in-store advertising

Once again, the folks at RetailWire are having another lively discussion about the future of in-store media. Retail media expert Laura Davis-Taylor leads this BrainTrust Query (free registration required) in an attempt to answer the question of whether digitally-based retail media networks need a unique team and/or skills to function and be utilized to their fullest extent. As usual, the discussion is quite good, and there are responses on both sides of the table. My favorite is from Mark Lilien, a consultant with Retail Technology Group, who argues in favor of a interdisciplinary team by noting that, "retailing technology success is often 1% strategy and 99% execution."

That's a hugely important (and accurate) thought that still isn't well understood by many struggling to implement their retail media programs. The work that goes into up-front strategy is quickly surpassed by the work needed to implement and subsequently maintain any form of retail digital media, whether it be audio, video or interactive. Just because a medium is digital doesn't mean that it can lose it's relevancy or timeliness. Likewise, marketers would be wise to listen to the opinions of their customers during a retail media pilot, and consider making adjustments accordingly.

By my totally unscientific estimate, I believe that most retail media networks (digital signage in particular) are probably only utilized at 75% or less of their maximum efficiency (however one might measure that), since almost every network that I've looked at could benefit from some sort of improvement or other. Still, there are many who believe that once a network is deployed, it's finished, and the rest is up to the content guys. While that mentality might allow some networks to stay successful over time, there's almost always something that could be done to make it a little better for the consumer, and better performing for the retailer.

Tags: retail media, digital signage, in-store media, in-store advertising