The new mass medium

The new mass medium

Earlier this year, Tesco marketing director Tim Mason
proclaimed that he wanted media buyers to think of the supermarket chain as a media channel in itself.

He argued that the channels of communication Tesco has built to reach its customers could be used by its
suppliers as an alternative or complement to advertising or other marketing activity.

Not long afterward, the marketing boss of one of those suppliers said that he believed marketing through supermarkets could eventually rival TV in terms of spend. Nestlé Rowntree marketing director Andrew Harrison wrote in the Financial Times that TV's price inflation and historical failure to market itself meant it could lose its place as the mass-market media channel of choice. Who will replace it? Well, supermarkets will, says Harrison.

"If I want to get my message across to 70% of British households, it's obviously going to be more cost-effective to run display-ends in major retailers than to purchase overpriced breaks in a soap," he wrote.

"Of the £9m we're spending on the launch of Double Cream - our first new chocolate bar for five years - only £3m will buy TV time. The rest will be spent on a heavy PR campaign, broadcast sponsorship, sampling and massive retailer support."

Harrison claims TV's hyper-inflation is turning away new clients. TV stations, he says, need to work together to resell the concept of TV to a new generation of fmcg brand managers more into mobile phones and the internet than an old medium like TV.


Food for thought for media buyers

Tesco media manager Bill Pennell says the timing of Media Week's retail media forum, in association with The Media Vehicle, couldn't be better.

He says the UK's top retailers are emerging as the most effective media channels at a time when the entire media industry is edging its way toward media neutrality and is, therefore, more accepting of different routes to the

The argument from the big supermarkets and
high street stores is, on paper, a highly convincing one.

Distinct media opportunities are available in Tesco - trolley, floor and basket posters, car parks, 96-sheet posters on Tesco lorry fleets and revolving light boxes. Retailers say these media opportunities can be planned and bought in the same way as traditional media, through independent media specialists. They can be integrated into advertising campaigns, taking the message right to the point of purchase

And, most importantly of all, they point out that retail media reaches the majority of all UK households every week - from mums doing the weekly shop to the younger generation popping in after work to pick up a microwaveable meal and a bottle of wine.

High street newsagent WHSmith, which recently embarked on a major pre-Christmas poster and press advertising campaign, is attracting in-store advertising from its newspaper and magazine suppliers.

Richard Desmond's Northern & Shell, publisher of the Daily Express and Daily Star, sponsors a news cube near the entrance to stores. Magazine publishers also see point-of-sale promotion as a vital part of their marketing strategy.

WHSmith's railway station and airport outlets have been fitted with screens, on which publishers can buy
advertising slots. This can be tied in with dedicated promotional space for the featured title in store.

"We can do a better job than TV," says WHSmith business unit director for news and express, Rachel Russell.

"The point of sale is more of a call to action."

The changing nature of retailers

Point-of-sale marketing is as old as retail itself, but thinking of a retailer as a mass-media channel requires
something of a change in mindset.

For an industry that has utilized everything from a beer mat to the side of a lorry for commercial communications purposes, should it be that radical a shift?

The nature of retailing has changed dramatically over the past 20 years or so, with the huge number of local retailers and 10 or more supermarket chains consolidating to form four main multiple fmcg retailers, controlling about 70% of the food retail market and 50% of confectionery.

In many respects, the retail industry's experience in terms of audience and footfall is the direct opposite
of media, particularly broadcast, which has seen the
proliferation of channels and the fragmentation of

Grocery multiples are, therefore, well placed to serve advertisers' needs in terms of reach.

Supermarkets, particularly, are able to satisfy one of the key demands of the modern marketer - accountability. Point-of-sale information and loyalty card data can be used to directly track the impact of store environment marketing activity. It also helps marketers build
consumer profiles.

In theory, supermarkets and potentially other retail points with exposure to huge numbers of consumers, could be challenging broadcast and other display media for a substantial share of spend in the future, particularly in the fmcg sector.

Dixons group marketing services director Elizabeth Fagan says retailers have always used their stores as a media channel. "For me, it's nothing new, but maybe the time's come to look at scope for expansion," she says.

"There are so many opportunities, from posters
outside the store to information on TVs inside. Retailers have always considered their in-store environment as part of the media mix. The bigger the sites become, the bigger the opportunity that exists."

Jessica Hatfield, chief executive officer of the Retail Media Forum's sponsor, The Media Vehicle, says much has been written about the rise of supermarket media, yet confusion still exists as to its actual meaning.

"People think retail media is about gondola ends and dump bins. That isn't advertising, that's promotion. Advertising has to have a communication message attached to it," she says.

"What's better than putting your advert in front of someone at the very moment the person is in store with the product?"


Getting the most from the shopping experience

So, what are the down sides, if any, of the retail media opportunity?

One of the main problems is the shopping experience. Many consumers agree that entering a supermarket isn't relaxing and that getting products scrawled on a shopping list is a mechanical operation, often viewed as a chore. Many consumers are, therefore, not in a receptive frame of mind for advertising as they do the weekly shop.

Of course, they are in the frame of mind to purchase, and seeing an ad positioned near the point of purchase or shelf might tip the balance for one product over another for an additional purchase or trial of a new

But does this environment enhance brands? Can brand values be transmitted from the clutter of the shelf, the aisle, or the shopping trolley, as shoppers bump their way around the store or the retailer's congested car park?

Broadcasters will also argue that brand messages thrive in the programming environment that they create and sponsorships, for example, can often benefit directly from content. Advertisers in supermarkets have little direct control over the context in which a consumer might see an ad and this may deter many clients.

But, even if the actual retail environment is right, the actions of the retailer itself may not be. Many a brand manager has, for example, cursed retailers for damaging their carefully constructed brand marketing activity by placing his or her product on discount, thus blowing any premium brand aspirations.

Changes to the physical layout of shops - moving the cat food from aisle nine to 16, for example - is another classic example of how a supermarket's own agenda might not benefit an advertiser.

Despite these questions and others arising from the use of retailers or supermarkets as media, the growth in such activity is undeniable. Retailers are investing heavily in making the shopping experience as tolerable as possible, even enjoyable. And, with major advertisers, such as Nestlé and Procter & Gamble, taking a fresh approach to in-store marketing and the big supermarket brands actively promoting themselves as media owners, the issue can only grow in importance for clients, agencies and other media owners.  

An expert panel - comprising top retail, marketing and media figureheads - has been assembled to debate the power of retailers at the Media Week Question Time debate on the power of retailers.

Retail Media: The New Mass Medium?, in association with media operator The Media Vehicle, will be held on December 4 at The Royal Society for the Arts, London. A lively night is in prospect, with questions taken from a specially invited audience.

Joining The Media Vehicle chief executive Jessica Hatfield as panellists will be Carlton TV chief executive Martin Bowley; Naked Communications partner John Harlow; Masterfoods UK media director Paul Smith; Carat planning head Phil Reddaway and MindShare futures director Jed Glanvill.

Entry to the event is by invitation only.

For further information contact:

David Williams, partner at IQ Group

Retail environments are destined to be the advertising medium of the future. The local supermarket, corner store or even post office are in the enviably powerful position of being able to communicate with customers and influence their decision-making at the point of purchase.

Obviously, this has long been the case, but it has become increasingly important in recent years. One reason for this has been the fragmentation of traditional advertising media. The plethora of digital and satellite TV channels now available has left marketing departments in a quandary as to how to most effectively split their advertising budgets to reach as many shoppers within their target audience as possible.

And this is really the key now - targeting. Getting the right message to customers when they are in buying mode. After all, research from industry body POPAI shows that 75% of purchasing decisions are made in-store. The power of this combination of events at store level remains untapped. All retailers need to do is to take up the reins and grow into media owners to harness the true potential of their store environments, through in-store digital media networks.

Before these networks can blossom, retailers, brand owners and their suppliers are going to have to work in partnership like never before. Thankfully, the technology is available, although it is confusing for retailers who are faced with a minefield of decisions. Should they go for LED, LCD or plasma screens? What size of screens fit the bill? Will they need ISDN or ADSL lines installed, or rely on satellite as the mode of delivery for promotional messages to arrive at the store?

It's our job as suppliers to guide retailers through what will work best for them, based on issues such as the number of stores they have and how they plan to use the technology. RePromotion's technology, for example, is particularly apt for large store networks as it offers the ability to change messages on individual screens within a store, with only a couple of clicks of the mouse.

Such sophistication might not be important for a 10-store retail chain but, for a 100-store operation, it would be invaluable for reacting to specific events, such as deciding to run a promotion on surplus cheese stock at a supermarket, or as means of alerting customers walking into a department store that a cookery demonstration is taking place on the fourth floor. Customers arriving at the fourth floor might then find they are offered deals on kitchen implements and crockery used in the demonstration - all communicated with ease from a nearby screen.

Eventually, technology will become a secondary concern to how it is used, particularly as the industry's fragmented supplier base consolidates and a few systems become the industry norm. It's content that will be king and retailers will need to rely on the expertise of content providers - such as advertising and sales promotion agencies - to play their part here. But the focus must be on a new style of advertising - running tried-and-tested TV-style brand ads simply won't cut the mustard in the in-store environment. Finding a way to take below-the-line promotional messages onto in-store screens in a short, sharp and compelling way will win through.

It's also essential to join together to fund some robust research into the medium so that we can hone our skills for this new form of above-the-line promotion. We need to ask questions such as what is the optimum length for a message? How many messages should be looped together and how often should promotions be changed? In addition, research should cover everything from the best locations for screens in stores to how customers react to the screens and messages.

There are two issues here: With today's retailers considering themselves as brands in their own right, attracting certain types of customers, they have an ethos and image to maintain. Are they going to want to leave control of what appears on screens in their stores down to brand manufacturers or the network operator? Not likely. Retailers should demand a significant input to ensure their in-store digital media network operates within an integrated marketing strategy.

It will also be surprising if retailers don't want to join in reaping the financial benefits of a successful in-store system. Disappointingly, there is little UK data available to show the scope of networks. However, content management company ScreenRed has estimated the potential size of the UK market to be more than £25m. There's a lot of advertising potential within that and retailers will be able to take their share of commission. In the US, research analyst CAP predicts that what it defines as the "narrowcasting industry" will be worth $2bn (£1.3bn) by 2006 - nearly half of this will be advertising and network operation revenue. At present, CAP believes the US market to be worth $388m (£247m).

Retailers have the power to transform the world of in-store marketing. Everything is in place and it can happen when messages are centrally controlled, when screens are individually programmed and when promotions respond to live data.

The only question that remains now is whether retailers will have the courage to grasp this golden opportunity. Step up to the platform - your audience awaits you.

IQ Group markets RePromotion - in-store digital media networks

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