The Grocery Store as a Media Vehicle:

James IllingworthSenior VP, Marketing & Business Development

While ISM (in-store messaging) has been used for decades in the advertising industry, this marketing tactic is enjoying a recent resurgence in popularity as CPG (Consumer Packaged Goods) marketers are increasingly including in-store messaging as part of their national campaigns—and not as the limited shopper marketing tactic of the past. Analysis suggests this resurgence is in part driven by three emerging trends which are causing some brands to revisit their levels of out-of-store investment:

  1. Pervasive questions on the transparency of digital advertising
  2. Growing demand for proven marketing results for all CPG investments
  3. Critical role receptivity plays in advertising effectiveness

These trends are proving advantageous to in-store advertising which offers three highly attractive benefits:

  1. Opportunity to engage the crown jewel of marketing investment… active shoppers
  2. Ability to scale in-store messaging to millions of consumers
  3. Availability of a wide variety of proven tactics to meet different brand objectives

CREDIBILITY COUNTS: Digital Advertising Failing to Establish Trust

Digital advertising tactics and new media investments are under a growing umbrella of doubt, facing questions about competence as brands struggle with a perceived lack of transparency and trust. On the purchasing side, agency, data access and media placement costs are typically bundled into CPM (cost per thousand).

Another challenge to the purchasing side is that not only is determining the actual consumer-facing investment nearly impossible to quantify, but it is also frequently substantially lower than brand expectations.

On the placement side, programmatic has become an industry trend because of its ability to deliver unique, real-time targeting and its efficiency in moving digital inventory. However, buyers of programmatic inventory quickly realize that they lack insight into—or control of—where their ads are placed, what content they are placed near and whether these messages are truly hitting consumers when they are receptive to advertising. (This drastically differs from in-store advertising’s precise messaging placement.)

Viewability is another transparency issue plaguing digital investment. Despite an industry push, many major digital players still refuse to adopt viewability standards, and as a result, it is extremely difficult to know if messages are being served to actual humans and if so, whether those ads ever show up on the viewable portion of the screen. Behind these concerns, many brands are growing increasingly skeptical of their digital investments and some major CPGs are even going as far as making dramatic cuts to their digital spending, as reported by WSJ in the article “P&G Cuts More Than $100M in Largely Ineffective Digital Ads”.1

MEASURABLE EFFECTIVENESS: In-Store Messaging Results Easier to Assess

In addition to growing digital concerns, many CPGs have implemented a strong focus on marketing effectiveness. Whether it is ZBB (zero-based budgeting) or a more rigorous measurement of ROI (return on investment), brands are increasingly demanding solutions based on robust analytics, preferring to spend more of their dollars on consumer-facing tactics. This trend is having a direct impact on agencies and new media companies as CPGs have come to realize that agency teams get tired of creative much more quickly than consumers.

“The farther away communication is delivered from the point of purchase, the more difficult it is to truly isolate an impact and attribute a verifiable sales lift.”
Insignia Systems in-store marketing, grocery store sales graphic

Evidence of this impact is apparent in the stock prices of major holding companies like WPP Group, which is down over 30% from 2017 highs after revising guidance multiple times. New media companies also struggle with the ability to provide consistent volumetric effect connected to their tactics. These challenges result from a decades-old dilemma for media companies: The farther away communication is delivered from the point of purchase, the more difficult it is to truly isolate an impact and attribute a verifiable sales lift. Conversely, in-store messaging can be placed at the exact point of purchase making it much easier to attribute and verify.

UP CLOSE AND PERSONAL: Targeting Consumer Receptivity is Key

A final growing trend in CPG marketing is the need to reach consumers when they are truly receptive to an advertising message. Over the past decade, new targeting tools have allowed us to learn more about the consumers we are targeting and deliver a personalized message to a specific person via an increasing number of tactics ranging from digital banner ads to addressable TV to direct mail.

However, the industry continues to struggle with the notion of receptivity and the ability to identify the right time to deliver that message. Millions of dollars have been spent by mobile advertising companies to determine when someone is within several miles of a specific store.

But proximity alone is not sufficient to truly understand intent, including whether that consumer will end up inside that store and if they are receptive to adding new items to their basket. The only true way to assess receptivity is to be able to reach the crown jewel of all marketing endeavors—an active shopper—which is the recipient of all in-store advertising.

PAYING ATTENTION: Active Shoppers Respond to Focused In-Store Messaging

CPG marketers are increasingly including in-store messaging as an attractive and effective way to optimize their marketing plans. Consumer research has consistently identified active shoppers as a highly desirable audience for brand engagement due to the critical role in-store messaging plays in influencing shopper behavior.

FACT: Over 90% of shoppers buy groceries in a brick and mortar store

FACT: 71% of consumers make food and grocery impulse purchases

FACT: 70% of buying decisions are made at the shelf 2 3 4

Insignia Systems in-store marketing, grocery store shopping data visualization

In-store messaging is also incredibly scalable and can allow brands to quickly reach large audiences. The average US consumer will make 1.5 grocery trips per week5, resulting in a total of over 224 million weekly grocery trips—or the opportunity to reach an average of 1.3 million active shoppers per hour with a well placed in-store messaging program.6 On top of that, advances in targeting capabilities by many of the larger in-store messaging companies, like Insignia Systems, allows CPG brands to deliver focused messages that can vary by store based on demographics, psychographics, or purchase history.

A final driver for the increased appeal of in-store messaging is the wide range of tactics that can now be leveraged in-store, including shelf signs, shippers, endcaps, Instantly Redeemable Coupons (IRC’s), personalized coupons, and other digital content residing within the retailer ecosystem. CPG brands are embracing these tactics,moving away from viewing them as limited shopper marketing programs and instead considering them to be components of bigger national brand campaigns that not only have the power to drive immediate conversion but also provide the opportunity to build brand awareness and equity.

BACK IN STORE: Why Brands Will Continue to Create Impact Via ISM Tactics

Behind these emerging trends, CPG brands are looking to ensure they have a strong presence at the point of purchase, and they are building marketing plans that start in-store and then adding higher funnel activities. These brands are seeking solutions that allow them to reinforce their messaging with active shoppers who are in front of a shelf, trying to choose between their product and their competitors’. They are searching for ways to inspire shoppers in high-traffic areas of the store, like produce, to add items to their list, and ultimately, to travel to additional aisles and seek out their product. They are realizing that because the average consumer shops for groceries 1.5 times per week, messaging placement in the store is a powerful opportunity to tell their brand story and grow advertising campaign impressions among consumers who are actively evaluating and making purchases. This is not to say that digital and new media investments are going away, or that over time they won’t be able to address some of the issues that are plaguing them today. However, it does support why many brands are redirecting a portion of their spending back to tactics that reach the right person at the right time, a time when their message can have maximum potential impact, making the grocery store an effective media vehicle.

SOURCES:

  1. Bruell, Alexandra and Terlep, Sharon. “P&G cuts more than $100 million in ‘Largely Ineffective’ digital ads.” Wall Street Journal. July 27, 2017. https://www.wsj.com/articles/p-g-cuts-more-than-100-million-in-largely-ineffective-digital-ads-1501191104
  2. US Department of Commerce, “US Census Bureau News.” May 2018, https://www.census.gov/retail/mrts/www/data/pdf/ec_current.pdf
  3. Garcia, Krista. “Food Tops List of Impulse Purchases.” eMarketer. February 26, 2018. https://retail.emarketer.com/article/food-tops-list-of-impulse-purchases/5a946479ebd4000744ae413d
  4. “It’s not just about the shelf: Creating the ideal in-store experience.” Nielsen. July 21, 2016. http://www.nielsen.com/us/en/insights/news/2016/its-not-just-about-the-shelf-creating-the-ideal-in-store-experience.html
  5. “Grocery Shopping: US Consumer’s weekly trips per household.” 2017 U.S. Grocery Shopping Trends. July 2017, page https://www.fmi.org/docs/default-source/webinars/trends-2017-webinar-7-18-2017.pdf
  6. Goodman, Jack. “Grocery Shopping: Who, Where and When.” The Time Use Institute. October 2008. http://timeuseinstitute.org/Grocery%20White%20Paper%202008.pdf