In-store media ring cash register

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Add the supermarket to the list of culprits contributing to media fragmentation.

Retailers and marketers, armed with new technology, have transformed the store itself into a media channel, and they're jockeying for control within the store's walls.

The steady splintering of ad-supported print and TV media options has made it more important than ever for marketers to make their products shout at consumers from the store shelves. And retailers' new mantra is to brand the shopping experience itself so customers are constantly aware of where they're shopping. Just walk into a Target or Kroger near you to see the evidence.

It has gone so far that some supermarkets are trying to reduce the clutter of the marketing messages delivered inside their stores-which is potentially bad news for marketers. "All the gadgets thrown into the store to get consumers' attention have turned into a kind of marketing spam," says Kevin Kelley, a principal with Shook Kelley, Charlotte, N.C.

"Retailers want to turn down the noise while emphasizing their own names and private-label brands," says Mr. Kelley, whose retail store design consultancy works with supermarkets.

Despite this in-store tug of war between the retailer and the marketer, retailers never forget the widely cited fact that at least 70% of all buying decisions are made at the point of purchase, and brand marketers' in-store displays, promotions and contests play a big role in making cash registers ring, according to Dick Blatt, president-CEO of Point-of-Purchase Advertising International. POPAI represents makers of in-store marketing displays.

working strategically

"Retailers are demanding more quality in their displays," Mr. Blatt says. "They want in-store devices to conform to their standards, and in the process, display makers are working more strategically with marketing agencies to get better results."

More than ever, trade dollars grease the shelves of all retailers, says Mickey Jardon, exec VP at DVC Co-Marketing, a Norwalk, Conn.-based division of DVC Worldwide. "The dollars keep going up, and although many retailers have put out a `clean store' policy to limit in-store messaging, they know manufacturer-driven promotions push not just those specific brands but entire product categories," he says.

Budgets previously earmarked for traditional advertising are increasingly migrating into co-marketing funds for retailer-specific national promotions often backed by spot TV commercials. These efforts usually have a significant in-store marketing component, says Paul Kramer, president of the channel marketing group at Ryan Partnership, a Wilton, Conn.-based marketing agency.

Overall, mainstream supermarkets have given up on fighting discounter Wal-Mart Stores and club stores like Costco on price, and are reconfiguring their stores to focus on a more relaxed shopping experience, better customer service and products grouped around lifestyle needs such as entertainment or healthcare. High-profit categories such as dry grocery and general merchandise items are being showcased through new store fixtures that look less like aisles and more like islands, alcoves and attractive pantry layouts, say in-store experts.

"Supermarkets were traditionally set up like lumberyards, but now they're being designed more around the consumer's mind-set," Mr. Kelley says, "and in-store marketing displays must follow that logic rather than just blindly screaming for attention."

Other new trends include less reliance on kiosks and machines that spit out coupons when customers push buttons at the point of purchase, says Mr. Kramer.

During this past holiday season, Allied Domecq took the floor, literally, to tout Malibu coconut rum. The program using Floorgraphics' billboards followed similar efforts for Kahlua liqueur and Stolichnaya vodka.

Allied Domecq was able to gain incremental floor displays for its brands without price promotion at a time when floor space is at a premium, says Joanne Kletecka, group brand director, adding, "We are constantly searching for innovative, yet strategic, ways to reach our consumer in a crowded marketplace."

"In-store promotion devices are becoming more brand-specific, aimed at changing behavior and attitudes, not just on rewarding a customer with a lower price that day," Mr. Kramer says. "The bottom line is that in-store displays matter more than ever, and every inch has to count for more, both for the marketer and the retailer."

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