Are you a cart puller?

No, not in the pack mule sense of the phrase, but rather in the "move down the checkout aisle pulling your shopping cart behind you" sense.  If so, you may be missing a big chunk of marketing messages trying to get you to make a few last impulse purchases before you pay.

That's what boutique market research firm Relevation Research concluded (and AdAge reports) after studying shoppers moving down the checkout aisle.  While "pullers" as they're called (and you can count me among them) account for about 74% of shoppers, remarkably most marketing materials and POP around the checkout aisle are designed for pushers -- those folks who push their cart down the checkout aisle (why they do that I'll never know.  But then, I'm a puller). The critical takeaway ias that, "The front of the store is a department, accounting for 1% of sales or more." That's according to Nan Martin, a co-founder of Relevation, who continued, "It's designed for consumers to make impulse purchases as they push through. If you're pulling, your back is to the merchandise most of that time."

I can see this kind of information putting retailers in a bind.  It's definitely not intuitive or "pretty" to have POP and other promotional materials face backward.  And while many displays are designed to be shopped from 360 degrees, few visual aides are designed to be seen from 360 degrees.  And if you decide to simply double up the number of ads in hopes of attracting the attention of both pushers and pullers, it's going to start looking very noisy, very quickly.

On the other hand, one must imagine that retailers are happier knowing what's going on than not, right?

Right?

Tags: shopping, retail marketing

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

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

Three trends in product packaging: make 'em easy, smart and green

A few months ago I wrote about a Wall Street Journal article highlighting some of the dramatic changes going on in the product packaging industry. Media fragmentation, changes in viewing audiences, measurement conundrums and everything but the kitchen sink are being held up by ad execs as excuses for why media budgets continue to spiral upwards while ad effectiveness declines. But when push comes to shove, eventually people have to buy stuff. And when they do, they're going to come face to face with product packages.

Realizing this, CPG companies have started packaging strategies to guarantee that their wares will practically jump off the shelves thanks to eye-catching package designs that communicate their product's benefits and stand out from the competition. Even AdAge, who's not exactly the most friendly group when it comes to below-the-line advertising practices, featured a couple of articles about packaging and product sampling, illustrating how important the First Moment of Truth (FMOT) has become for product manufacturers. For example, in a recent (really good) article on the subject, Allen Adamson of branding consultancy Landor Associates notes that:

If you don't have luck connecting with the audience you want as they sit in front of TVs or laptops, sooner or later they're going to show up in front of a retail shelf. That's a great segue to the second dynamic driving rekindled interest in packaging as a branding tool: the increasingly difficult time brands are having differentiating themselves in a sea of shelf clutter. Any brand research worth its salt will tell you that differentiation, together with relevance, is the most critical factor in brand success.

His advice? First, use strong design cues to both draw attention to the product, and tell a story about it. Some of his favorite examples include Apple's products and Evian water, which all use the package to illustrate qualities inherent to the product (simplicity and elegance for Apple, purity for Evian). More interesting examples include those where the package is an actual part of the product, and thus needs to market itself reflexively (for example, Campbell's Microwavable Soups or Nabisco's 100-calorie packs). Second, follow the key trends going on in the packaging world right now. That means that:

1. Green is good: Be environmentally friendly -- or at least less unfriendly -- and you can tout it as a feature!

2. Smart is good: Engineer packages that help consumers use your product (like Hellman's mayo in a squeeze bottle).

and

3. Easy is good: If I have to open one more damned razor-sharp plastic clamshell package, I'm going to quit your brand for good.

Manufacturers are already picking up on lots of these trends, but examples of packages that meet all three are still few and far between right now. As product packaging grabs more attention I expect this to change, especially when you consider that it's one of the more affordable ways to make a really significant marketing impact at the point of sale these days. For now, though, those companies that had the foresight to start paying attention to the above trends and redesign their packaging accordingly are enjoying benefits on the shelf that will be hard to match with additional spending on above-the-line ads.

Tags: out-of-home advertising, marketing at retail, product packaging

Deloitte study: in-store marketing growing faster than Internet

Deloitte Consulting just released the summary of a report conducted for the Grocery Manufacturer's Association with a truly remarkable finding. As neatly summarized in this Ad Age article, they claim that in-store advertising is growing at a faster rate than internet advertising.

The report finds that "shopper marketing has grown from 3% of the overall marketing budgets of the 19 package-goods manufacturers surveyed in 2004 to 6% this year. The manufacturers expect it to reach 8% of marketing budgets by 2010. That puts the compound annual growth rate for their shopper-marketing spending at 21%, faster even than spending on Internet advertising (rising 15% annually) and far faster than the 2% growth projected for spending on such traditional media as TV, print and radio."

This is obviously great news for the industry. But once again, the problem of measuring the effectiveness of in-store marketing is a concern, as Ad Age writes "Shopper marketing also has been hampered by lack of audience-reach measurements comparable to other media, which in turn makes it hard for marketers or agencies to make spending decisions or do post-campaign effectiveness analysis on shopper marketing the same way as for traditional media."

Of course, this may change significantly due to today's announcent from Nielsen about establishing a global ratings metric for in-store marketing. But more on that later.

The fact that in-store marketing is growing so fast without conventional ways to measure effectiveness like television, print or even the internet says a lot about the potential of this industry. Advertisers are obviously acting on a certain amount of faith by starting to push more and more in-store marketing techniques. They obviously see a great future in it and want to be among those to stake the biggest claim on the market whether they have all of the numbers to back it up or not.

The statistics from the Deloitte study also further the idea that a serious splintering of media habits is occurring in America. There is a kind of free-fall nature to the way advertisers are reacting to this, which has turned out to be a good thing for us, as it means that newer techniques of reaching audiences are being given more attention (and more money).

It's impossible to say which media platform is going to be the "big winner" several years out, but playing in the advertising market is not a zero-sum game. While our piece of the pie might be growing at a fast rate, the whole pie itself is growing too. The money for at-retail projects is still probably coming out of some other budget (whether tv, print, or Internet), but with practically every budget growing, there are few losers, just smaller winners.

Tags: marketing at retail, out-of-home advertising

Hypermarkets creating a new shopping culture in China

I thought this article about shopping in China at The Retail Bulletin was a pretty amazing contrast to an earlier report in the WSJ about shopping in India. In India, if you'll recall, organized retail is still the exception rather than the rule, and except for a small population of elite Indians (well, small by percentages -- only about 14% -- but that's still 150 million people), most still do their daily shopping in disorganized mom and pop stores and stalls. In order to capitalize on this massive amount of people and their combined purchasing power, big retail chains have taken to creating organized retail stores that merely look disorganized, selling damaged merchandise alongside new goods, keeping stores hot and stuffy, and making aisles curved and cluttered instead of neat and orderly. In short, in order to cater to the existing shopping culture, retailers have changed the way their stores work.

Now go ahead and read the aforementioned Retail Bulletin article, and you'll see that in China retailers are trying precisely the opposite. China's middle class is growing at an astounding rate and are being influenced by outside forces and Western concepts like never before. Combined with traditional shopping patterns and expectations that are somewhat different from India's, China has been a breeding ground for new hypermarket activity, as, "on average, China's middle class consumers visit hypermarkets every 10 days, making for a frequent-shopping pattern that owners of hypermarkets can bank on for a predictable revenue stream." In fact, according to the article:

TNS Worldpanel (China), which continuously measures household consumption in 20 of China's provinces as well as Beijing, Tianjin, Shanghai and Chongqing, says latest data show that hypermarkets increased their share of the value of China's grocery sector in the country's 15 largest cities from 28.5% in 2005 to 29.8% in 2006. The share in these largely provincial capital cities and municipalities - known as tier 1 cities - has continued to increase this year, reaching 30.1% in the first half of 2007. TNS is predicting a share for hypermarkets of 35% by the end of the decade - compared to the level of just 19.7% seen in 2001.

Most hypermarket operators aren't native, but are instead imports from other countries (Wal-Mart/Trust-Mart (US), Carrefour (France), Tesco (UK), and RT-Mart (Taiwan)), further illustrating a difference between Chinese and Indian shopping preferences.

What's interesting is that both economies are growing rapidly, and both countries still have hundreds of millions of people who will grow wealthier over the next few decades, and will consequently have more expendable income to spend on food, soft/hard goods and luxury items. But where retailers -- even those native to the country -- have had to scale back their plans to Westernize their stores in India, in China the swelling middle class can't seem to get enough of Western-style organized retail activity. It's even more ironic considering that India's mode of government is democratic, and the nation has long appreciated the dynamic of free market economics, whereas China's sometimes stifling Communist government only recently began allowing the foreign investment and competitive business practices essential to making something like a hypermarket work in the first place.

I certainly haven't yet figured out what makes these two countries so different in terms of shopping cultures, but given the sizes of their markets and the speed at which they're both growing, there are probably a lot of smart minds working on the problem at this very moment.

Tags: marketing at retail, merchandising, store planning

CBS takes to grocery stores with a plan to brand deli meat

It's been a while since an article in Advertising Age has cracked me up, but how can you not laugh at a title like "Hey Deli Man, Can I Get a Pound of Ham, and Jimmy Smits?" What does it have to do with retail, you ask? Well, interestingly it looks like CBS has started a new campaign that will be featured, among other places, on packaging and containers at supermarkets across the country. Following up on a successful in-store campaign that involved laser-etching messages onto thousands of individual eggs, CBS will be slapping ads for their shows onto labels, stickers, boxes and bags for supermarket deli products, ensuring that the roughly 70% of supermarket shoppers that visit the deli, meat or seafood counters will have a chance to see their promotions. Even more cleverly, as the article points out, those who do take home a package emblazoned with the catchphrase for Two and a Half Men (or whatever) will be re-exposed to that message every time they open the fridge. And if you're like me and frequently forget about things you've put in there, it could be a while before that package of cold cuts finally disappears.

Apparently aside from trying to reach a different audience, CBS's nontraditional tactics have another advantage: they're cheap, especially when compared to the cost of producing and carrying TV commercials (which is kind of ironic considering that they own a major network). Given all the news of CBS's intent to purchase in-store TV company SignStorey, we can see that CBS is clearly concerned by increasing media fragmentation and the new challenges associated with reaching an audience.

While grocery stores have huge footfall and have a very broad appeal demographically speaking, I for one am still not quite sure I'd be more likely to tune in to CSI after glancing at a label while rummaging around for a snack. But there are probably plenty of people who will, and that's what CBS is counting on.

Tags: marketing at retail, out-of-home advertising, CBS

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

P&G looks to tiny tiendas for big growth

While Wal-Mart is P&G's single largest customer, as a percentage, they derive a much larger amount of revenue by selling into thousands of small, high-frequency stores frequently found throughout developing countries. While the stores may be tiny, collectively they add up to big business, as the WSJ recently illustrated. "Sales of P&G products in developing markets currently total $20 billion, up from $8 billion five years ago. In recent years, emerging markets have contributed about 40% of the company's "organic" sales growth, which excludes gains from acquisitions.... Last year P&G derived 26% of sales in these regions."

With that kind of growth it's no surprise that P&G is actively pursuing more business in these high-frequency stores. And while they've primarily competed on price and brand-power alone till recently, the company is now adding a new approach to the mix: providing merchandising advice. Since most of these stores are tiny -- many are run out of a small room on someone's home -- space is at a premium, and stores carry at most two or three brands for most product categories. This can be challenging for a company like P&G, who might make several different brands all by themselves, or might be trying to sell a full line card into a store that already carries as much product as their space allows.

To combat this, P&G is introducing new integrated displays that come fully stocked with a complete range of products, and they're working aggressively to "own" the space behind the cashier's counter. As the article notes, "P&G calls space nearest the cashier the 'hot zone,' and considers it the most valuable real estate in these small stores. Since more than 60% of customers already know what they're going to buy, P&G figures, little time is spent browsing. But P&G researchers found that shoppers tend to gaze at the cashier's area for a precious five seconds as they wait for the owner to hand them a product or get their change -- a prime opportunity to influence future purchases."

The company is also taking a page from Frito-Lay and having local distributors re-stock shelves, which cuts down on labor required by the store owner, but also ensures that the P&G products are shown in the best possible conditions. Likewise, they've ditched efforts to have their own sales force handle sales to each store (there are over 220,000 in Mexico alone), in favor of having local entrepreneurs handle that part of the business.

Tags: merchandising, POP displays, marketing at retail

P&G to commit $2B to retail-marketing efforts

As Advertising Age announced a few days ago,

Procter & Gamble Co. is preparing to give some $2 billion in retail-marketing funds a seat at the same table as advertising.

The company is partially consolidating its marketing groups to put retail-marketing strategy under the same marketing directors who oversee brand teams instead of under the group that manages the sales force. Once the new system is introduced, general managers or marketing directors who find a brand responds better to trade marketing than consumer marketing will be able to shift more funds in-store. This should make for a more genuinely discipline-agnostic P&G.

The move aims to answer questions that long have dogged package-goods marketers: who should control the tens of billions of dollars spent on trade promotion -- often the largest part of the marketing budget -- and how to make those dollars work in the same strategic plan as advertising and consumer promotion.

Analysts estimate that Procter and Gamble spends over $2 billion a year on trade marketing, which is about twice as much as the entire digital signage industry generates right now. Of course, if you were to throw in all POP displays and merchandising the market is quite a bit larger, but a $2B addition is still extremely significant.

While there's no reason to think that 100% of that amount will be channeled in store -- after all, there are lots of other techniques like direct mail, online and event/promotion that could be successful -- given P&G's past indications that in-store marketing techniques (like digital signage) are becoming increasingly important it's probably safe to bet that we'll see some new things in-store from them (literally).

Here's the real question, though. If P&G is successful with this new plan, how/when will we find out about it? And will there be a cascade effect, where other major CPGs suddenly jump in and start redirecting large portions of their advertising budgets?

Tags: P&G, in-store marketing, marketing at retail

Want to engage customers? Here are 12 things NOT to do

Have you read C.B. Whittemore's "Flooring the Consumer" blog yet? Whittemore bills the blog as one focused on, "improving the store experience, particularly in flooring," but believe me, she always has some great insights that are applicable to the majority of retail situations. For example, in a post from a few days ago Whittemore laments the sad state of Wal-Mart, its stores, and its relative indifference to the customer experience, particularly in relation to Target, who has gone to great lengths to keep their own megastores fresh, attractive and inviting. Rather than create a to-do list for errant companies hoping to find their way back to delivering positive customer experiences, Whittemore instead delivers a top-12 what NOT to do list:

1. Don't allow your stores to become dingy, un-cared for, dated or unpleasant.
2. Don't create an environment that burdens your consumer.
3. Don't become complacent and think that good enough is OK.
4. Don't fall in love with expansion and lose sight of existing stores and customers.
5. Don't understaff your stores.
6. Don't focus completely on being the lowest priced retailer.
7. Don't be a schmuck.
8. Don't lose touch with the marketplace.
9. Don't have tunnel vision.
10. Don't ever underestimate the power of quality, convenience and customer service.
11. Don't ever alienate your core customer base.
12. Don't wing it!

Obviously she adds some critical insight to each element of the list, but for that you'll have to read the whole article :) While all of these points are great, my favorite is #12, which seems to be overlooked so often. Rather than just guess at what might work in-store, or implement a huge plan based on a single "great idea" from a company insider, more companies need to implement more a exacting implement -> test -> analyze results strategy to figure out what works. Integrate customer/shopper comments, query in-store staff to gain insight into sales floor techniques, and look for untapped resources and inefficient processes. Above all, be willing to try things that might fail, but also be willing to change them once you've recognized that they actually are failing.

Tags: marketing at retail, in-store marketing, store experience

Immersive Display Solutions and ZmmConnect present the Ad.mersion system

Maybe I'm starting to get old, but the more I see gimmicky advertising solutions like interactive floors, 3D holographic displays and immersive systems, the more quickly I immediately think "this will never catch on at-retail." Aside from some extremely cool-looking demonstrations, I just haven't seen many practical applications that use these kinds of things to do something unique, innovative, and genuinely useful.

Of course, every once in a while somebody like Reactrix - makers of some of the aforementioned interactive floors - will go and do something amazing like raise $45 million to place their wares into malls in hopes to sell advertising and sponsorship deals, but to me even that kind of seems like having more dollars than sense. Perhaps it's because I'm not the right target audience, and maybe getting kids to jump up and down and run after a spinning Nike logo on the floor really will help to build a connection between brand and budding consumer. But I'm going to need to see some data before buying into that.

Now on the other hand, I do think that these kinds of immersive technology may have a place in experiential shopping venues - those who put the brand and the experience front and center instead of focusing exclusively on selling products (and after doing a bit of research, it seems that David Polinchock from the Brand Experience Lab would agree).

Where's this going? Well, I started giving this area some thought after reading that a company called Immersive Display Solutions announced that a great use of their immersive graphical "bubbles" (for lack of a better word) is retail advertising. I'll be the first to say that IDS's immersive screens are extremely cool. They create a feeling of depth and motion that just can't be matched by a much smaller flat screen. However, it seems like this is a solution in search of a problem, and I'd be surprised if the Ad.mersion system, as it's called, can gain traction in the increasingly competitive out-of-home advertising market. Do the displays have the ability to attract a crowd? Yup. Will it be enough to offset the expense of the system and its ability to only address a relatively small number of people at once? Right now, I don't think so.

Granted, advertisers have a long history of latching on to the latest novelty in hopes that it will catch enough attention with its uniqueness to make it worthwhile. But like my feelings towards Reactrix, it's going to be a challenge to show that these systems are practical for more than brand promotion and producing a more interesting in-store experience.

Tags: Ad.mersion, marketing at retail, out-of-home advertising

Starbucks contemplates its brand experience

AdAge is running a good article on the "death of the Starbucks brand experience," citing a recent trend from inside the company (in fact spurred on by chairman Howard Schultz, as noted by a leaked memo picked up by Starbucks Gossip last week) of cutting costs and improving efficiency at the expense of the brand's experiential qualities. For example, the article cites things like delivering vacuum-sealed ground coffee to stores across the nation (as opposed to having them grind their own beans), and using pre-measured espresso "capsules" instead of having barristas pull shots as examples of the way Starbucks has been commoditizing the brand experience in order to keep up its growth rate. The problem in both of these cases is that by reducing the authenticity of the environment and the personalization of service, Starbucks is relegating themselves to acting as a glorified coffee (and CD, and scone and breakfast sandwich) vending machine, losing some of its homey ambiance in the process. Combined with the fact that they were found to have some of the worst-tasting coffee according to a recent Consumer Reports study, that equals a big problem. The most interesting quote from the article is this gem, which definitely sheds some light on the company's changing focus:

"You probably wouldn't leave a Starbucks dissatisfied, but satisfaction is just the price of entry. It has lost its differentiation, its crispness of experience."

In an age where a leaked memo could be a PR ploy as much as it could be a simple oversight, a quote like that could indicate a genuine interest in becoming remarkable again, or it could simply be motivational rhetoric. As one of those coffee snobs who scoffs at Starbucks, I can't say I have a big emotional investment either way, however Starbucks has been one of the standard examples of how to do brand experience right for over a decade now. Watching such a giant stumble but recover would certainly be educational for anybody interested in improving the in-store experience of their venues.

[2007-02-27 UPDATE]: As usual, RetailWire has an excellent thread going on this very subject.

Tags: Starbucks, store experience, marketing at retail

An interesting RFID experiment for cosmetics

StorefrontBacktalk has a very interesting article about an experiment in Japan involving retail chain Mitsukoshi, cosmetics company Shiseido and Fujitsu (the RFID vendor), where RFID tags are used to track when different cosmetics samples are tried, and to generate customized customer purchase histories, which would allow sales clerks to not only know which items a customer has purchased in the past, but also which they tried but opted not to buy. Also,

"the trial—involving retail chain Mitsukoshi, cosmetics company Shiseido and RFID vendor Fujitsu—also offers consumers a "virtual real-time makeup" session featuring a camera-equipped kiosk, display and RFID tag reader "that will enable customers to view on the display how particular products would look on their face by waving tagged cosmetic products such as lipsticks or eyeshadows over the tag reader," the companies said in a statement.

Virtual cosmetics kiosks like this have been met with varying degrees of success in the past, but to me the RFID tracking of usage and purchase is the killer app here. I now have to wonder how the sales clerks will use the trial and purchase history information to improve customer service and/or promote key products.

Tags: RFID, digital merchandising, marketing at retail, purchase history