New DDS articles

How Digital Media Transform In-Store Marketing
by Nikki Baird (Forrester)

EXECUTIVE SUMMARY
Stores are emerging as a viable alternative to the challenging mass-market advertising environment; they've quietly become a hotbed of advertising activity as more retailers test the effects of digital in-store media on shopper behavior. As digital in-store media increasingly prove their worth — both to the retailers that have figured out how to turn their communication assets into steady revenue streams and to the advertisers that have found the reach and targeting that they seek — the flood of interest and money will disrupt the status quo. This change will affect nearly all in-store marketing players, from agencies to retailers and everyone in between. Those that embrace the disruption stand to benefit the most.

AWARENESS AND PURCHASE CONVERGE
Not so long ago, retail marketing was a lot easier. Consumer products companies had marketers who holed up with their agency and developed advertising campaigns to drive awareness, while trade or channel people delivered in-store promotions to drive purchases. It was similar to the separation between church and state: Awareness was awareness, and purchase was purchase, and the gulf between the two was a mile wide (see Figure 1-1). But trends affecting marketers' ability to reach consumers are finally coming home to roost. Fragmented markets and channels dilute reach, and consumers actively try to avoid that reach. The marketing game is clearly changing, both at large and in stores. How?

Awareness and purchase can happen anywhere. Awareness and purchase are much more closely linked than they used to be, and the digital world provides that link. Consumers want channel transparency; they embrace options that allow them to buy online and then pick up their purchases in the brick-and-mortar store, and even Web buyers use the store for awareness or consideration when choosing what to buy. But technology short-circuits the distance between online access at home and the store environment. For example, a consumer with a cell phone can use Google SMS (short message service) to search Froogle for competitor prices and availability while standing at the retail shelf.

Frequency doesn't cut it anymore. A debate has raged for years over frequency versus recency in media planning. Frequency proponents argue that repetition is a critical element of campaign success. But research has shifted that thinking in recent years, emphasizing the importance of a purchase trigger (the empty cereal box, for example) and the ability of marketers to not only get their message in front of consumers who have that trigger but to also do so as close as possible to when those consumers decide to buy.(see endnote 3) With consumers' TV recall falling drastically over the last several decades, as well as increased backlash and mistrust of advertising, this concept of recency re-arms marketers with a more focused way to reach consumers.(see endnote 4) This approach recognizes the importance of proximity to purchase as a factor in advertising effectiveness. And given that consumers are spending less time in front of the TV, yet becoming more connected digitally, marketers need to get far more diverse — and creative — in their approach to advertising to get that recency win.

Too many chefs spoil the store. With brands more desperate than ever to increase their differentiation in an overcrowded and information-driven world, the store as a communications medium has not been immune to reach fragmentation and consumer ad backlash.(see endnote 6) In-store promotions and execution don't match up with mass advertising campaigns, and the store itself becomes a cluttered free-for-all as competing merchandisers shove competitors' programs out of the way to make room for their own.

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