The in-store advertising model is a long way from cornea scans triggering computer-generated sales offers customized shopper by shopper, but the long-coveted ideal of making the store an advertising medium is gaining ground and moving beyond floor ads hawking cookies and potato chips.
Just last week, Albertson's revealed plans to begin rolling out a multimillion dollar in-store advertising network in its 2,500 stores. The grocery-store chain plans to offer media buys for advertisers and Albertson's own promotions mixed with content such as Food Network shows in a 12-minute loop of programming on 15-inch flat-panel screens above checkout lanes in partnership with Premier Retail Network, the San Francisco-based firm behind Wal-Mart TV.
Albertson's is mum on details of the rollout, but in a press release Chief Marketing Officer Paul Gannon touted the network as a way to "make our customers' lives easier." The chain's pilot program in the Chicago area included promotions by Disney for "The Incredibles" DVD release. Movie trailers were shown and digitized arrows pointed to displays chock full of the DVD, positioned next to checkout lanes, according to Natalie Egleston, general manager of the Supermarket Network at PRN.
Besides prompting the all-important impulse buy, PRN plans to tout the network to advertisers aiming for a mainly upscale, female demographic. "This is hitting a consumer in a buy mood and they will be open to messaging," said Ms. Egleston. Financial terms were not disclosed, but PRN will manage the programming and manage all advertising sales.
Andy Donchin, director-national broadcast at Carat USA, doesn't see his clients rushing to in-store advertising or even showing much of an interest just yet. "The question is: Are people really listening to it, is it really sinking in?" he said. Some industry-watchers question whether consumers really want more information, especially in the grocery environment where confusion abounds and the proliferation of line extensions on once-simple product lines like toothpaste continue unabated.
"A consumer is already in a store to buy," said Nikki Baird, a senior analyst of consumer markets who just began coverage of in-store advertising for Forrester Research. "If advertisers abuse that receptivity to the point that it inhibits their ability to shop, there is definitely going be a backlash. ."
Retailers shouldn't just copy the advertising model of TV and run the equivalent of 30 spots, she added. "It needs to be interactive," she said, likening the potential of in-store advertising to Internet advertising. "You can get the same richness of data," she said. "It has to be married with customer information, rather than just being a network."
She pointed to the personal shopping assistant launched at Stop & Shop, a banner of retail giant Ahold. The PSA gives shoppers store maps and reminds them of items missed on downloaded shopping lists based on previous shopping visits, culled from POS data. "To me that's dead useful," she said. "With in-store advertising, you really have to pay attention to the consumer. Otherwise, it is just going to be irritating."