Special Report In-Store Marketing

An essential link in the ad chainFor years now, even a decade, marketers have talked about the importance of in-store marketing.The reasons, which are as familiar as they are legion, have become standard speechmaking fare at advertising industry conferences.Two-thirdsConsumers, according to...

An essential link in the ad chain

For years now, even a decade, marketers have talked about the importance of in-store marketing.

The reasons, which are as familiar as they are legion, have become standard speechmaking fare at advertising industry conferences.

Two-thirds

Consumers, according to oft-quoted research by the New Jersey-based Point-of-Purchase Advertising Institute (popai), make about two-thirds of their purchase decisions in-store.

In impulse categories, such as confectionery, the proportion is even higher.

In-store’s proponents say fragmentation of traditional media, combined with the fact that shopping is no longer solely the responsibility of women, have meant that the store is one of the only remaining broad-reach vehicles, cutting across most demographic and psychographic groups.

Considered essential

In the case of product introductions or line extensions, advertising and promotion at the store level is considered essential to ensuring widespread trial.

As well, research has shown that today’s better-educated and better-informed consumers are less brand-loyal.

Shoppers make their selection within a category from a stable of two or three brands that are of similar quality and deliver satisfactory results.

As a result, consumers are more open to being influenced by advertising and promotion at the point of sale.

Unlike traditional advertising, which relies more on qualitative measures of effectiveness, such as image building, in-store’s effectiveness is evaluated on a quantitative basis – usually by volume sold.

Advertisers know exactly what return they are getting on their investment.

More options

And, finally, the proliferation of point-of-purchase advertising and promotion vehicles – which include cart advertising, aisle directory advertising, ad and recipe pads, shelf-talkers, coupon dispensers, sampling and product demonstration, in-store radio, all manner of signs and displays, as well as packaging, among others – has given marketers a greater range of in-store communications options than ever before.

All that being said, it is only recently that marketers have seriously begun to leverage in-store marketing’s relationship with traditional media advertising by treating it as an essential link in the advertising communications chain.

Integrate

Brad Clemes, group category manager at Toronto-based Coca-Cola, is representative of a growing number of marketers when he says: ‘Everything we do in-store, we are trying to better integrate with activities we are doing throughout other media.

‘There is no benefit to Coke if I go into a store for six weeks and give away golf clubs,’ Clemes says. ‘Maybe I secure some in-store space, maybe not, but there is no long-term benefit, no consumer equity.

‘Ideally, I want to put programs into place in-store that are proprietary to Coca-Cola, that build on Coca-Cola’s equity, and that have strong consumer recognition,’ he says.

‘Back-planning’

Two years ago, the company began what Clemes calls ‘point-of-sale back-planning,’ a process that starts with in-store strategy and moves outward to television and other traditional media.

Perhaps the best example of this was the soft drink maker’s announcement last month that it was radically changing its packaging to differentiate itself from its competitors in-store – and that tv advertising had been developed in support of that move.

The Easy Pak, a high-resolution box that holds 24 cans stacked in two levels of 12, opens three ways, and can be stored in the refrigerator, is the subject of a live action and computer-generated animation tv commercial in which a model, sporting a backcombed hairdo and dressed in early ’60s-style clothing, demonstrates the Easy Pak’s practical benefits.

A second spot focusses on the company’s new two-litre contour bottle.

Clemes says in-store signage and displays are information-driven and refer directly to the packaging.

A display for the Easy Pak, for example, illustrates how the box opens. Point-of-sale signage for the contour bottle says, ‘Easy to hold. Easy to pour.’

Clemes says the back-planning strategy ‘is a fundamental shift, especially for a company like Coca-Cola, which tends to be identified and classified as an image-driven company.’

He says the change in philosophy was a gradual one, brought about by a more competitive in-store environment.

Hy Haberman, president of Toronto-based sales promotion agency Marketing & Promotion Group, says while no one would dispute that advertising’s role is largely to change attitude and promotion’s role is largely to change behavior, there has been a real ‘blurring of the lines’ over the past three to five years.

‘We’re seeing better creative, better integration of a brand’s key selling benefits into promotional offers, into the structure of the promotion itself,’ Haberman says.

He says not only that, but in-store promotions are more often being communicated through traditional forms of advertising.

Robert Clarkson, president of Toronto-based sales promotion agency Promo Marketing Canada, agrees that people are talking more these days about integration of advertising and promotion, but he is not sure it is something new.

‘Rather than being a change, that’s something that should have been happening across the board,’ Clarkson says. ‘And if it didn’t happen, that was largely a result of companies having a `promotional flavor of the month’ attitude.’

Bob Beneteau, a partner at Markham, Ont.-based Accumark Promotions Group, is more blunt.

‘The fact that fewer dollars are being spent in advertising, marketers are hopeful they can use that opportunity to do a bit of brand sell in support of the promotional offering,’ Beneteau says.

‘Can you help us?’

‘But I don’t see marketers saying, `Gee, we’ve slashed our advertising budget, can you help us in-store build a brand franchise from a brand image point of view?’ ‘ he says.

Like Coke, Toronto-based Campbell Soup is another marketer paying more attention to integrating its advertising and in-store messages.

Last November and December, the company ran a promotion to encourage consumers to buy soups for use as a cooking ingredient.

The promotion featured five varieties of soup, including a new product, Italian Style Tomato, and Cream of Asparagus, which the company was reintroducing as new and improved.

Key to the promotion were 11 easy-to-prepare recipes.

In-store elements, created by Marketing & Promotion Group, included a 12-page recipe booklet, entitled ‘Start Cooking with Campbell’s,’ an infoNet Media coupon/recipe ad pad under the same theme, and a sampling program in which demonstrators cooked and distributed the featured recipes on site.

As well, the same recipes appeared on the soups’ labels.

The promotion was supported with a print advertising campaign in women’s magazines and six tv commercials, three of which featured soups as ingredients.

The tv creative used the tag line ‘Start Something with Campbell’s,’ a variation on the ‘Start Cooking’ theme.

Mike Braiden, Campbell’s senior trade marketing manager, says the integrated nature of the campaign was intended to keep the promotional message alive.

‘We still believe that advertising has a lot to do with a purchase decision, but we want to make sure that at retail, that message is reinforced,’ Braiden says.

‘Give the consumer the message, make sure there is a consistent message, and that it is available once your consumer gets to the store,’ he says. ‘So you haven’t wasted the pre-sell.’

John Torella, a retail analyst with Toronto-based John C. Williams Consultants, agrees consistency is key to persuading consumers to part with their money.

‘Consistency is everything,’ Torella says.

Dissonance

‘If you are creating one kind of image in your advertising, and if I walk into the store and the message isn’t consistent, then you have created dissonance,’ he says.

‘And dissonance creates anxiety and people won’t buy.’

Torella says cosmetics marketers have understood this for some time.

‘That’s one of the reasons they have concentrated their marketing efforts on department stores, because, there, they could create an environment and a feeling that was consistent with their product – right down to the cosmeticians,’ he says.

‘They even have the right person reflecting their brand.’

Barbie doll line

In its recent promotion of its Barbie doll line, toy maker Mattel Canada is one marketer that has shown it understands the importance of a consistent message, according to Torella.

From its plush pink carpet to its pink neon signs and gold lame curtains, Barbie on Bay, a store-within-a-store located in The Bay department store in downtown Toronto, builds on the fashion doll’s image as a glamorous, fun, successful character, says Kelly Elwood, senior product manager, Barbie.

Elwood says everything in-store reinforces the nature of Barbie as an interactive toy.

A child-sized activity centre has been set up to allow visitors to play with the dolls and their accessories.

Merchandising vignettes

At children’s eye level around the perimeter of the store, the dolls are displayed out of their packages in merchandising vignettes, just as they are in the tv commercials.

Western Stampin’ Barbie, for example, is shown in a western setting, together with her value-added play pieces. Another display shows Barbie and her doll friends sitting around a pool.

‘We believe that everything we do in-store has to reinforce the message that the girls see in our tv advertising,’ Elwood says.

‘It’s certainly not a one-off proposition, but consistent, continous in-store advertising and promotion can have a dramatic effect on your brand position,’ she says.

Torella says there is no question that in-store marketing is playing a greater role in image-building. That’s why, in the apparel category, manufacturers such as Nike, Levi Strauss, Ports and Tabi have each opened their own retail outlets.

Control imagery

‘They want to be able to control their own imagery right through to the point of sale,’ Torella says.

‘They have, in many cases, been less than happy with what traditional retailers have done at the point of sale with their imagery,’ he says.

‘Even the packaged goods people – the Cokes, the Krafts, and so on – are putting a lot more emphasis on supplying to the retailers point-of-sale material because they want to keep that consistency right through.’

Torella says perhaps the most trenchant indicator that packaged goods companies are taking in-store marketing more seriously than ever before is the recent decision by u.s. packaged goods giant Procter & Gamble to transfer senior executives to the headquarters of retailer Wal-Mart in Bentonville, Ark., with the objective of building co-operative promotions.

Piecemeal

Although many marketers are now paying more than lip service to the concept of in-store marketing, it was not that long ago that their strategies in-store were piecemeal and built around price reductions, say industry experts.

As Robert Gorrie, president of Mississauga, Ont.-based Gorrie Marketing Services and the supplier of point-of-sale materials to Mattel, p&g and H.J. Heinz, among others, puts it:

‘Point-of-sale has been the orphan of the whole advertising industry. It’s only now that people are starting to accept it as more than a price dangler or rail strip. They are starting to think there might be more of a strategic aspect to what they are doing in-store.’

‘Simply sizzle’

Murray Cresswell, vice-president and group account director at The Gaylord Group, a sales promotion agency based in Etobicoke, Ont., says for more years than he cares to remember, ‘a lot of promotions were simply sizzle, and, in many cases, may well have done the brand a disservice.’

As such, marketers and sales promotion agencies left themselves open to the criticism that promotions were eroding the brand image and equity that advertising agencies had worked so hard to build in traditional media.

Worse, retailers were not interested in co-operating in promotions that simply shifted customers from one brand to another.

They wanted to build sales throughout the category. And that required a more sophisticated approach.

Phil Renzoni, merchandising/promotions manager in the consumer health care division at Scarborough, Ont.-based Warner-Lambert Canada, says marketers are gradually coming to the realization that they have to motivate consumers in ways other than simply bribing them with price reductions or giveaways.

‘Not as sophisticated’

‘We spend a lot of money to reach consumers when they are at home, but we are nowhere near as sophisticated in our approach to the consumer at the point of purchase,’ Renzoni says.

‘Part of the reason is that we’ve always seen it as the salesperson’s responsibility,’ he says. ‘To some extent, marketing has abdicated that role to sales, so they haven’t looked at that area in terms of any kind of long-term strategy at all.

‘We are coming to the realization that, if we want to win, we have to concentrate on the consumer at the point of purchase, as opposed to just pre-purchase marketing.’

Strategies

Renzoni has spent the last six months developing in-store strategies for each of the three key categories his company makes – oral hygiene products such as Listerine and Cool Mint Listerine; cough/cold/allergy products such as Benylin and Sinutab; and skincare products such as Lubriderm.

The idea, he says, is to engage consumers in a manner consistent with the overall strategy for the brand.

In the cough/cold/allergy category, for example, trust is the message that must be conveyed.

To that end, the company has recently developed, in conjunction with Scarborough, Ont.-based supplier Somerville Merchandising, a Cough/Cold/ Allergy Relief Directory for use in PharmaPlus drug stores.

Computer

The led readout computer provides customers who plug in their symptoms with the brand names of suggested products.

In the mouthwash category, Renzoni would like to stimulate consumers on a more sensory level, with point-of-purchase materials that would give customers the impression the product is both good tasting and effective.

‘Traditionally, point-of-purchase marketing has tended to consist of two things: price [reductions] and display,’ he says.

‘Emotional level’

‘What we have been ignoring are the things which television tries to do, which is hit consumers on an emotional level.

‘Why can’t we hit them when they are at the point of purchase, when they have dollars in their hands and the intent to purchase?’

For a couple of reasons, experts say.

Retailers, for the most part, control the environment in which in-store activity takes place.

Gorrie says that while it is all very well to plan in-store promotions, a marketer’s efforts will be in vain if he or she has not established a good working relationship with the retailer or is unable to prove that the proposed strategy will increase sales for an entire category.

Relegated to juniors

And, traditionally, in-store strategy has been relegated to the junior levels of a company’s marketing department, often the assistant brand manager level.

‘Their job may be primarily to crunch numbers and once they get involved in sales promotion, they may undertake it without the proper degree of supervision,’ Clarkson says.

Haberman agrees there is not enough senior management time devoted to promotional plans.

He calls that a ‘huge failure’ on the part of marketers who he says are spending as much or more on promotional activities as they do on advertising.

Positive trend

While it is true that promotional decisions tend not to rise to the presidential level of a company’s hierarchy, there is one positive trend, according to Cresswell.

‘Many companies used to say, `This is the advertising budget. This is the promotional budget.’ Now they are saying `This is marketing money,’ ‘ he says.

‘It’s not happening in leaps and bounds, but companies are starting to ask themselves, `What is the best alignment of activity that will move volume and reinforce image?’ ‘