reveries - digital media networks

Retailers including Wal-Mart, Best Buy, Ralph's and Tesco have validated that in-store television networks can build brands and drive sales. But a recent Reveries survey suggests their true potential remains largely untapped.

Stuart Armstrong, Digital View

That potential certainly is underscored in that some of these pioneers of retail TV have begun to rival major broadcast networks in audience reach and are showing their advertising proposition might also deliver better results.

Research by Nielsen for Premier Retail Networks Inc (PRN), which creates custom advertising for a range of leading retailers including Wal-Mart, Best Buy and Sears, shows brand recall on the Wal-Mart TV Network was 66 percent versus just 24 percent for brands on at home TV advertising. Recent research by Mintel also shows that, on average, consumers spent 5 percent more time, 10 percent more money and showed impulse purchasing rates at twice the rate in stores with digital media than without..

The real enthusiasm for "retail media networks" from the majority of Reveries survey respondents, not surprisingly, was in their ability to deliver highly flexible and targeted messaging to shoppers, bring products and services alive with interactive simulation and demonstration, as well as to reduce waste and improve promotional effectiveness.

However, delivering such benefits requires retailers and brands to re-think some of their assumptions about using television in retail environments..

First, marketers must move away from thinking about in-store television networks as just advertising vehicles. To achieve other customer service and staff performance objectives, digital retail applications need to be seen as one-to-one -- not mass -- broadcast communication mechanisms. Some of the most effective applications today are small screen -- not plasma -- based. The most powerful are those that enable relevant, useful interaction at the point of sale through interactive touch screens and integration with exiting CRM and loyalty card applications. The highest levels of recall have been delivered through new fit-for-purpose content programs and remote scheduling, not just re-playing an ad in-store.

Marketers must move away from thinking about in-store television networks as just advertising vehicles.

Second, marketers need to reassess their business models and financing approaches to their networks. In the Reveries survey, one of the lingering impressions is that the cost of the technology is prohibitive. In fact, the price of video displays has fallen rapidly and the wide availability of wireless communications makes remotely connected networks possible for almost retail or brand environment. In addition, new financing options such as renting or leasing in-store television networks make them more readily available.

New leasing programs allow retailers to install and exploit the benefits of in-store television in a low risk, affordable way on a monthly-fee basis. Many of these programs come with integrated maintenance and upgrade paths to keep the latest digital technology available in-store.

Other business models can be even more attractive. Retailers like Wal-Mart have teamed up with a specialised media sales partner and sell tailored promotional programmes and advertising loops to major brands in key product categories. Monthly network infrastructure and maintenance fees are deducted before the balance of the advertising revenue is shared between retailer and media sales house. Models such as these allow retailers to develop a long-term media asset without the risk of major capital investment.

Most important, if brand marketers and their retailer collaborators are to achieve the maximum impact from retail media networks, they need to focus on the other benefits of retail media as well. For example:

Inform. Help customers cut through increasingly complex product ranges to find what's right for them -- improving customer touch and the shopping experience by providing clearer brand signposts in-store. This is particularly relevant in new product launches demonstrating new features and benefits to encourage early trial. For example, Kraft recently installed 1,000 on-shelf interactive display units in coffee aisles around the country to promote and educate consumers about their Starbucks brand -- and saw a 200 percent uplift in sales.

Engage. Increase basket spends by bringing a greater excitement to, and involvement in, the shopping experience. For example, using interactive applications to help shoppers match up various wines that would go well with different meals, moving them into different modes of thinking, new product categories and impulse purchase decisions.

Promote. Improve promotional effectiveness in-store. Promotional activity is at the core of successful retailing but as promotions proliferate and turnaround times shorten, effective implementation rates drop. In-store TV networks can be centrally controlled remotely from a central location enabling retailers to ensure promotional implementation and removing complexity from the shop floor. A new promotion can be delivered at the touch of a button reducing the need for traditional point of purchase promotional materials such as cardboard stands and waste.

Research. Improve market research and product development data. Interactive in-store TV applications, with measurement features such as motion sensors, enable retailers and brands to gather valuable feedback on new products in a low-risk, targeted way - by store, by region, by demographic, by day of the week - to help maximise the impact of new launches and marketing initiatives.

Train. Offer retailers an interactive staff-training tool. As products and service ranges have become more complex, so have the costs of keeping sales staff up to speed with latest developments. In-store media networks provide a cost-effective way to keep staff up to date with new initiatives in-store, up-to-the-minute news such as a new computer virus or a flu outbreak and what to advise customers to do. Providing this kind of dynamic, interactive program can improve customer service levels in-store, and reduce the need for expensive outside training sessions.

More than 50 percent of respondents to the Reveries survey stated they have yet to get involved in digital media networks at retail. However, as they do, those who take a fresh look at traditional "Television" will see how an in-store "Decisionvision" network can achieve a host of brand objectives. With the right focus, marketers can use digital media at retail to improve brand awareness and sales, change purchasing choices, educate and inform consumers and staff and improve their promotional and marketing effectiveness.

Oh, and they can generate advertising revenues too.

Click here to view the survey's results.

Stuart Armstrong is Chief Operating Officer of Digital View, a suppliers of advanced connectivity solutions for the flat panel digital display market, and the implementation of out-of-home advertising and digital signage networks. Based in London, Digital View also has offices in Hong Kong, Toronto, Chicago, New York and Morgan Hill, Calif.