By Nikki Baird, in partnership with RetailWire
8/18/2009
RSR recently released a research report on in-store marketing. A bit of a narrow topic for us, but actually broader than the topic I was shooting for, which was in-store digital signage. By couching the research in broader terms, we were able to view digital signage in the context of all at-the-shelf programs that retailers and brands are trying to stuff into stores.
One of the more controversial findings from the research was a point on in-store execution - basically we found that a lack of visibility into in-store execution was a major barrier to expanding in-store marketing efforts. If you can't tell what's going on, it's hard to tell if it was effective. However, survey respondents were more interested in solutions that took the employees out of the equation and investing in measurement tools, than in solving the roots of in-store execution problems.
On RetailWire, panelists were understandably outraged: how can retailers push back on manufacturers about compliance, or even about using technologies like RFID to track in-store marketing programs, if they're not willing to fix execution problems? Because ultimately, it's the retailer who owns those problems, no matter who actually implements a marketing program in the store.
RSR recommended that retailers bring as many parties together as possible to make in-store marketing programs work. This is critical because it is most often Marketing or Merchandising that are putting together in-store marketing initiatives, but Store Operations who has to make them work. Execution is completely disconnected from the marketing initiative itself.
We're currently in the middle of putting together the results of our annual study on CRM initiatives, and one interesting factoid emerged that I had to share, given the context of the comments below. According to survey respondents, only 31% reported that Store Operations is "highly involved" in CRM initiatives - even less than the 38% who said that eCommerce is "highly involved." Any wonder that store execution is lacking?
For the full context of the discussion, read on...
Each business morning on RetailWire.com, retailing execs get plugged in to the latest industry news and issues with key insights from a "BrainTrust" of retail industry experts. Here are excerpts from one of these unique RetailWire online Discussions, along with results from the RetailWire Instant Poll.
More Measurement Tools Needed to Drive In-Store Marketing
Tom Ryan, Managing Editor, RetailWire
According to a survey by RSR Research, the biggest barrier to improved collaboration between brands and retailers around in-store marketing is a "lack of visibility" into in-store execution. Rather than improved execution tools, however, the respondents saw technology, particularly improved measurement methods, as the best way to bypass this issue.
According to the report, "The logic goes, 'If I don't have to rely on in-store employees, I have a greater chance of getting consistent in-store execution.'"
The report, Enabling the Shopping Process: In-Store Marketing for the Empowered Consumer, was based on a survey of 88 retailers and manufacturers in spring 2009...
...While the economy has slowed technology investments, the wish list for new technologies around in-store marketing focuses on those measuring program effectiveness, rather than new innovations to reach consumers in stores. RSR said this reflects "a shift in perception around in-store marketing programs: few seem to question the value, and are willing to make investments if it helps them identify exactly where the value lies. This is a warning to solution providers: for the retailers that ultimately own the real estate, 'results' need to be measured not in eyeballs or dwell time, but in hard dollar sales increases."
In its conclusion, RSR said that some basic capabilities must be in place to successfully measure the value of in-store marketing programs.
"First, the right capabilities need to be built in the right order - recognizing that this is an iterative process," the report states. "It's useless to pursue personalized communications if you don't have the content or the delivery channels first."
Second, RSR thinks its best to bring as many parties to the table as possible when it comes to funding and planning in-store marketing campaigns. "This applies both internally and externally - the more coordination you have, the higher quality the campaign, and the more likelihood of getting all of the funding you need to make it happen."
Finally, RSR said even in cases where brands drove the funding, survey respondents reported that retailers retained responsibility for execution.
That's why it's even more paramount to let in-store technologies resolve execution issues.
"It's easy to blame in-store execution when an in-store campaign does not yield expected results," the report states. "But it's a lot more honest, and better for everyone in the long term, if that can be eliminated as an issue. The solutions that enable in-store compliance tracking - from store execution management to video analytics - are more powerful than ever, and retailers are missing out on a big opportunity by choosing to live with the problem."
Discussion Questions: What do you think of the potential of in-store compliance tracking technologies to resolve execution issues and drive collaboration between brands and retailers around in-store marketing programs? What challenges may be faced in measuring the value of in-store marketing programs?
RetailWire Instant Poll Results:
RetailWire BrainTrust Comments:
I guess I'm a bit cynical here because of what we've already seen with RFID. P&G had wonderful programs going that showed the effect of out-of-stocks, the loss in sales to both sides when a display sits in the back room instead of getting implemented and the percentage of stores where displays actually happened. Yet, Walmart was unwilling to embrace the program.
As long as retailers see it as the manufacturer's problem and believe they can make up category sales even if a particular brand is sold out, there won't be consensus on this issue. Compliance seems to cost the brand more than it costs the retailer so while everyone talks a good game, the incentives and desire to solve the problem are quite different on differing sides of the fence.
With so much money and attention moving in-store, the ultimate measure will be whether any of these efforts jumps up sales in the long term or whether every effort provides limited pop. If retailers want more above-the-line marketing spend in their store they will need to commit to making in-store execution a top priority.
Lisa Bradner, principal analyst, Forrester Research
I too am a bit of a cynic, however, I see the responsibility for tracking compliance as a must for manufacturers. Manufacturers have done a better job in recent years of turning in-store funding into performance related activities but there is still much room for improvement.
There is technology available for compliance that can be better utilized by merchandising reps, such as in store handhelds, or firms that have a compliance tracking program for hire. Obviously RFID held promise but costs and widespread implementation are barriers to current usage.
The Retailer is still the gatekeeper to the consumer and if tracking compliance can result in fact-based presentations about better results and IF there is a ROI for the manufacturer, then more efficient and effective in-store programs are possible.
Peter Deeb, Managing Partner, Deeb MacDonald & Associates, L.L.C.
In-store marketing and promotion should follow a simple and repeating cycle: Planning --> Execution --> Measurement. Each iteration should feed into the next, so that lessons from one campaign can be used to improve the effectiveness of the next.
All too often that cycle is broken. The Measurement step is a labor-intensive afterthought that lags by weeks or months, or it isn't even part of the program. And without that insight and feedback, salespeople, marketers and category managers are doomed to repeat the failures of past campaigns. So when people talk about improving "visibility," they often simply mean that they want Measurement of some kind.
But I would argue that the ideal marketing/promotion cycle should go beyond that. Measurement shouldn't just be a single step, but it should be an automated, integrated part of the entire cycle. Planning should be done with access to simple, relevant analytics and shopper data, so that the campaign is targeted to the right shoppers. Execution should be monitored while in progress and corrected when it goes awry, not just handed off to the individual store managers. And measurement of the effectiveness of a campaign can't be a one-off report, it must follow the purchases of shoppers long after the campaign ends to see if their long-term behaviors has actually been impacted.
The challenge with this level of measurement is that it requires a fundamental shift in approach. Retailers' IT, Database Marketing, and Analytics teams are stretched too thin to add this type of continuous reporting to their plates. Instead, it requires a dedicated system that is plugged into the relevant sources of data (such as loyalty-identified T-Log data and a feed of shopper interaction with in-store shopper touch-points). And the system must be accessible to (and understandable by) the non-technical marketers and salespeople, both inside and outside the chain, without requiring help from IT. This type of access is rare today; hopefully, we will see it become the norm over time.
Ben Sprecher, Founder and President, Incentive Targeting, Inc.
Responsibility for in-store execution often falls through the cracks as retailers settle for "good enough" and margin-strapped brands look the other way. I've seen this get worse as licensing and pure brand marketing firms (you know, the ones that are doing direct brand deals with retailers) divorce themselves from tactical or technological in-store marketing even though they have a lot to lose (royalties) if sales don't happen.
This presents a huge opportunity for brands and third party solutions providers to coordinate (there's that word again) co-funded continuity programs and for marketing firms to bake in-store execution into their licensing deals.
Carol Spieckerman, President, newmarketbuilders
Read the entire story and RetailWire discussion at:
http://www.retailwire.com/discussions/sngl_discussion.cfm/13910
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