This week, Retail Systems Research (RSR) Managing Partners Nikki Baird and Paula Rosenblum published a benchmark study entitled Enabling the Shopping Process: In-Store Marketing for the Empowered Customer. The 30-page report, conducted in partnership with RIS News, delivers some very interesting insights based on survey responses from 88 retail responders. One facet of the study that is of particular interest is how RSR interpreted many results from the perspective of “Winners”, those companies delivering sales growth above industry averages, and “Laggards”, or those who were below the average. Among the key findings of the study is not just that Winners use more in-store marketing tools, but that what sets them apart is the quality “… in objectives set for marketing tools, and the processes used to ensure successful integration into the shopper experience.” Put another way, a shotgun approach of in-store tools may not be as effective as a series of rifle shots squeezed off with a plan in mind. This is consistent with messages delivered by many experts in the digital signage field, who have encouraged the development of objectives and strategies ahead of the selection of technology.
Of course, our focus is on what we can glean from an in-store digital media perspective, and the study delivers useful nuggets to consider. Winners clearly feel compelled to provide more information to consumers in the store, and have invested to understand customer behavior. This is welcome news, and when combined with the identification of “Traditional media’s effectiveness is eroding” as the number two overall business challenge, it certainly sets the stage for increased usage of digital media on the store.
In reporting that respondents focused on the importance of driving sales and margins and providing a consistent marketing message across various channels, the authors note that this represents a “serious disconnect” with the way in-store digital media has been discussed to date. They point out that the apparent focus upon concepts such as “opportunity to view” and “dwell time” obscures the only metric that really matters to retailers: sales lift. I think they are on to something here. The measures that have been getting the attention have done so because they make brand managers and ad buyers more comfortable with making a digital signage network buy. The measurements are an attempt to calibrate a digital signage ad spend along the lines of the eroding traditional media’s established metrics, and from a retail perspective that is a disconnect. The wonderful opportunity of in-store media is the ability to measure effectiveness through product movement at POS. TV ads (other then direct response infomercials) have no choice other than to rely on impressions. In-store media has the unique ability to measure product sales at the point of message delivery.
Do advertisers really care how many people SAW the message, or how many people ultimately ACTED on it? The study showed that in-store media is by far the top vehicle for collaboration with brands, again underscoring the value of measuring differently. It is time to move the dial on this, and it is not going to happen until retailers take ownership of the digital media technologies inside their stores. When they do, and they marry message playout logs with POS movement data, huge insights will be gained. DS-IQ was on this early, and perhaps too early, but the idea is absolutely dead-on. Analytics based on retailer-owned network data and retailer-owned movement data should be far more valuable than only knowing how many people viewed each message. Uplift can easily be measured by comparing control stores (no digital messaging) to active stores. And this won’t happen until one entity owns all the data: the retailer.
There is good news in that there appear to be signs that Winners are starting to connect the dots. They see the opportunity to leverage localized messaging and promotions; they are nearly twice as likely to be using in-store digital media as Laggards; and they are far more concerned with the ability to manage third parties on in-store marketing efforts. All of these trends point toward organizational willingness to take on in-store media as a strategic technology, owned and driven from the inside. This would be a seismic shift.
The study is chock-full of interesting data and insightful analysis, which makes it valuable to anyone who follows, understands, or hopes to play in retail from a marketing and technology perspective. The long awaited shift that will land in-store digital media on the retail application portfolio map seems to be underway. That will have a dramatic impact on the adoption, measurement and value of the technology itself. Bring it on!