In 1980, three 30-second television ads could reach 70% of Procter & Gamble's target audience. To achieve the same result in 2004, P&G needed 100 30-second spots, according to Mark A. Ciccone, director of customer business for the Cincinnati-based company. "This is just too expensive," Ciccone said at the recent Retail Systems convention in Chicago. "Today, the retail industry needs new ways to reach consumers." More specifically, retailers and their manufacturer partners need new ways to reach the nation's teenage population.
These kids are trading television time for Internet surfing, text messaging, chatting on cellphones and listening to their iPods. They also like to shop. That said, supermarkets are turning to dynamic technology to connect with younger shoppers at store level.
Today's tweens and teens are a shopping force to be reckoned with. They're part of the so-called echo boomer generation, which comprises approximately 75 million individuals between the ages of 10 and 27. While echo teens and tweens still live at home with their parents, they have tremendous discretionary spending power, according to Information Resources, Inc., based in Chicago. Echo boomers are expected to fuel the next growth wave for the consumer packaged goods industry, the firm says.
"Some work, others get an allowance from two working parents," says Ken Goldberg, CEO of Real Digital Media, a Sarasota, Fla. company that provides digital signage technology for point-of-purchase marketing and promotions. Goldberg says echo boomers focus their discretionary spending on clothes, music and food. On average, he says, they spend $300 a month.
Media-driven and tech-savvy, this group uses the Internet to stay on top of trends. "They like to shop, but at the same time, they are a brand-loyal bunch," says Tom Dowdy, CEO of Sarasota-based National In-Store, a division of the marketing and communications company Omnicom Group. "They want to shop on their own and when they do, they stick with the brands they know best."
On the downside, echo teens visit stores far less often than the average shopper, giving retailers fewer opportunities to influence their purchase decisions. And while they're in the store, traditional static signage is not the optimal way to reach them.
HIP MESSAGE, HIP DELIVERY
The need to reach echo boomers, as well as a desire to deliver different messages in various areas of the store, is leading retailers to trade printed signage for new, hip messages delivered through narrowcasting. The opposite of broadcasting, narrowcasting provides media content that is designed for and distributed to a specific viewer segment.
This push technology is finding its way into retail for several reasons, among them declining costs of hardware and software, the expansion of broadband and shopper demand for more exciting store-level messages. When grocers merge narrowcasting with flat-screen, high-definition plasma television screens, the medium takes on a new dimension.
Sometimes called "experiential" marketing or "retailtainment," narrowcasting and plasma screens are helping chains to communicate dynamic specialized messages to customers in real time. With each download, new data is instantly displayed on the plasma screens, and messages can be changed instantaneously depending on the day, the store and the audience.
A NEW BRAND IMAGE
"Supermarkets can change their print-heavy messages to more dynamic signage with the help of technology," says Rebecca Walt, director of retail operations for Convergent Media Systems. The Alpharetta, Ga. company provides broadband platforms that deliver video-powered communications. "This strategy can help grocers differentiate themselves and help to build a new store environment or brand image."
It's also the perfect medium to target hard-to-reach audiences, including the ever-fickle echo boomer teens. "Teens are visually oriented and they are used to multitasking. They want to visually assess merchandise while they watch a 30-second spot and hear related music," Goldberg says. "Grocers cannot do this with traditional media."
Fourteen percent of retailers already have the technology in place, according to the 2005 Retail Technology Study released at Retail Systems. The fifth annual study contains responses from 219 retailers, including supermarket chains. Further, 11% of respondents have installations under way, another 11% have plans to add the screens within 12 months, and an additional 8% will follow suit within two years, the study reveals.
Echo boomers are attracted to digital marketing because the technology is commonplace at some of their favorite stores, including Apple, Niketown, Best Buy and Abercrombie & Fitch. Supermarkets may soon be on their shopping lists, too.
WAL-MART TV
Predictably, the world's biggest retailer is grabbing its piece of the segment with Wal-Mart TV. Plasma and liquid-crystal-display televisions are placed in different store departments and feature 10-second and 30-second merchandise advertisements. The ads, which are delivered to the receivers via a satellite feed, pitch products at a critical time during the shopping trip: when consumers are making purchasing decisions.
"You want to reach a customer when their hands are in close proximity to the product and their wallet," says Goldberg.
Not to be outdone, supermarket chains are jumping on the plasma screen/narrowcasting bandwagon. The Tesco TV network, which the U.K. supermarket chain launched last spring, can be seen across any given store's 50-plus screens. Similarly, Fresh TV debuted in May at U.K. retailer Sainsbury's. Each store has roughly 120 screens that display customer information and product promotions.
Carteret, N.J.-based Pathmark Stores began adding 42-inch plasma screens across its 142-supermarkets late in 2004. The screens, which deliver targeted messages about products, as well as store and consumer information, "provide an enhanced in-store experience," a company statement says. The plasma screens adorning deli counters at ShopRite, one of Pathmark's chief competitors, immediately alert shoppers to daily specials.
"Some supermarkets are doing creative tests in their meat and deli departments," says Brad Eisenhaure, sales manager, Eastern Region, for Secaucus, N.J.-based Panasonic. "By adding Deli TV or screens in other departments, retailers can create revenue zones by broadcasting department specials, branding messages and advertisements." Panasonic is also in the narrowcasting game with its retailTV, a digital signage program that displays targeted messages in retail settings.
The use of the technology can be expanded in unorthodox ways if an operator chooses. "Some retailers are getting back to greeters who welcome shoppers as they enter the store," Eisenhaure says. "Rather than pay an hourly employee, retailers can stack two of our screens and display a 'virtual host.'"
FOSTERING LOYALTY
Retailers that are not deploying the technology "are viewed as old school," says Convergent's Walt. "Teens consider these messages a cool thing. Meanwhile, it is an interactive way for retailers to drive home marketing messages to their target audience." These messages may also foster customer loyalty among this shopper base. Arbitron, the media and marketing research firm, surveyed 1,400 consumers who visited shopping malls on both the East and West coasts. Some malls featured digital signs on plasma television screens. The other locations used traditional advertising media.
Shoppers who viewed the digital signs were 1.56 times more likely to recall a retailer's advertisement and make a purchase, the study says. Further, 40% of these shoppers were more likely to purchase from the merchant that used the digital signs. Goldberg says that retailers using the signs to boost new-item introductions are seeing up to seven times the usual sales lift.
Surely, a high-tech marketing strategy has a higher price tag than traditional printed signs. Retailers are subject to purchasing the displays, media player and software, and of course, the resources and labor to create the messages and maintain the solution. Despite the upfront costs, there's a strong return on investment, according to Goldberg. "Based on a three-year lease, the cost is about $4 a day per screen," he says. "If retailers can generate this small amount in revenue per screen, they could be headed toward a new source of profitability."
By Deena M. Amato-McCoy
Media Contact