Thursday, May 17, 2007

In-store Marketing Tactics – Simulation for Consumers, Stimulation for Marketers..

With the changing behavior of the consumers, and newer channels evolving, companies are fighting for consumer mindspace. More than that, and a step before, in fact, is the battle for catching attention and a portion of the eye span of the consumers – of getting attention towards your products, out of the clutter of consumer goods shelved along with you! This is the reason most companies use tactical measures at the final touch point – the retail outlets, to drive sales.

They attempt to plant “traffic stoppers” in a bid to make the consumers stand up and take notice of their offerings. What would you suggest to introduce such “traffic stoppers” at the POP?

Follow the “P”s and you would recommend innovative packaging, advanced product technologies, sales promotions, etc etc. But what if these methods have been tried and tested, and failed, too! What next?

A recent research at Mckinsey Quarterly discussed an innovative application of technology in in-store marketing. The article, “Using technology to improve in-store marketing” by Jim Brennan and Scott Liles, summarizes a recent case study taken up by Mckinsey for a consumer goods manufacturer.

With insights required from in-store shopping experience, and key customer profiling and preferences to be mapped to in-store investments, the company had limited resources and options with itself, to experiment and test inside the retail outlets. With constraints like multi-site management, long waiting period and high investments per customer, the company had to look for alternatives to identify its areas for improvements.

To add to that, sales driven retailers have increasingly become reluctant in adopting newer products, and as they grow, the filtering process tends to become much stronger for new product introductions (NPIs).

Solution? As what every new world marketer would think, for every marketing problem, there is… the online space – so was the case here too. A virtual shopping simulation was conducted online, with real participants, and based on the behavioral patterns and customer preferences the results were applied in the real environment subsequently.

As the article mentions

"The manufacturer developed an online interactive-shopping simulation to analyze the individual and collective impact of various in-store marketing tactics. Real-life participants browsed through a virtual store aisle, examined products, and “spent” a set amount of money."

Eventually, opportunities that were indicated as high potential included “redesigned shelf sets that highlighted the manufacturer’s charitable efforts, more sophisticated end caps (the displays at the end of shopping aisles), and in-store and on-shelf advertising”.

Traditionally, in-store marketing tactics that have been adopted by companies, as mentioned in an old article by Mike Kirkwood, include counter Displays near checkout, Display Racks, Banners, Posters, Streamers and shelf talkers – with messages that would make the consumer stop and read or take notice. The Point-of-Purchase is also termed as the “in-store silent Salesperson”, wherein the product communication itself acts as a driver for sales. This simulation reinforced the key options that would be the ‘most beneficial’ to the company.

There are companies that are developing this kind of Simulation applications as well. Vision Critical’s Fusion seems to be in line with the tools used above. According to the company’s product portfolio, Fusion is a complementary suite of rich media applications that include interactive visuals, streaming video and 3D virtual environments.

It mentions that respondents have a greater preference and higher participation rates toward visual testing and therefore, the results are less biased and more insightful. Some of the tests conducted through this product include Package testing, Product testing, Feature testing, Price point testing and Label testing.

This might be a familiar concept for the Second Life citizens, where NPI and brand launches are already happening and have attracted constructive consumer feedback as well.

But can this simulation be generalized for all product categories? More so, can it be applied to any retail environment? How much of these insights can be translated from an online simulation environment to an offline real-time in-store experience?

Reiterating what has also been touched upon, in the article, it is difficult to get insights in case of high involvement products, or specifically, where either the price points are high, risks perceived are high or product knowledge is limited.

A key pointer mentioned is that it removes biases to generate results. However, where I disagree a bit is that this is precisely the environment in which consumers would shop, and any impact of these biases should figure in the tactics designed. Consumers need to be engaged with the shopping process, and their involvement levels are influenced with the ambience as well. Any pilots, if they do not factor these biases, would obviously give unrealistic results/patterns – a conventional flaw in some of the theoretical marketing models!

All said and done, it definitely resolves the issues mentioned above – the costs incurred, multi site issues, long waiting time – all this has been addressed by the new media; but it still needs to factor impact of local ambience, store formats as well as people skills –something that would definitely be pertinent to getting the “consumer’s attention” – whether positively or negatively!

Companies familiar with “In-store advertising” understand the ways/media being used currently. I had earlier talked about how in-store advertising was evolving into newer forms of indoor media. As I had mentioned that time, seems like the factor of DSCA or Desperately Seeking Consumers Attention is advancing into marketing tactics, too...

So, you can either say that "companies should ensure that the right level of subjectivity should be factored while translating research results into practical on-the-ground strategies, to ensure that they not only communicate but also connect to the consumers, to give them a pleasant and valuable experience"

or simply,
"Just make them pick up my bloody product, will ya!"

[References: Mckinsey Quarterly Web exclusive, April 2007, In-Store Sales Techniques – July/August 2003; Image source: P&G Annual Report, Buy my Stuff, Sleeping child]

Incidentally, while browsing through in-store marketing tactics, there was this interesting insight I managed to get hold on to. Mentioned in the recently held
In-Store Marketing Summit, on the April 19-20, 2007, at Oak Brook, IL, that on an average, consumers cover & shop at only about 25% of the store. The perimeter of the store remains the most trafficked, most highly merchandised and most “glamorized” section.
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