In-store advertising registers 120% growth in one year

In-store advertising has seen a huge jump of more than 120 per cent in the past one year, and retailers believe the trend will continue to grow.

The steep rise is here to stay and is a "very good return on investment", said Bejoy Thomas, Marketing and New Initiatives Manager of Abu Dhabi Co-operative Society.

"Investment in the selling area has seen a considerable increase this year," said Thomas. "These include investment in additional displays, sales promotions, sampling promotions and brand communications. Specifically in the area of investment in in-store brand communication/advertising, our case doubled in the year 2009."

Individually conducted surveys have revealed that there has been a consistent increase of 30 per cent year-on-year in in-store advertising, but the current crisis has brought this growth to astonishing figures of as much as 120 per cent.

Explaining the phenomenon of branding in the aisles, Thomas said: "In-store advertising has increased its relevance over the past three years in every major FMCG brand's annual media plan. This has extended the frontiers of the so called 'out of home' advertising media."

Kamal Vachhani, Director Al Maya Group, voiced the same sentiment: "This kind of media is gaining more popularity with all FMCG companies as they are moving indoors to advertise their products through in-store campaigns."

A survey by Booz and Company revealed figures that were positive and dictated a new trend in in-store advertising.

"Everybody has to shop, so the store is the last place where mass marketing exists. Even better, you are reaching to people who are declared shoppers. They're there for a purpose," said Karim Sabbagh, a partner at Booz and Company.

Marketers, retailers, and media companies have attempted to make in-store advertising a bigger part of the marketing mix with more sophisticated vehicles than traditional cardboard displays or coupons. Today, video ads in stores are preferred. These ads are programmed on the basis of where shoppers are standing in the store. They show promotions on nearby displays, the survey revealed.

Stating a specific example in support of the survey, Thomas said: "Year 2009 saw milestone achievement by Ponds, the premium skin care brand by Unilever. The campaign focused on in-store advertising across 60 supermarkets in the GCC and was executed in one single evening.

"Such campaigns by global brands reinforce the increasing relevance of in-store advertising as a major avenue for brand-building."

In-store advertising promises to attract substantial marketing investment as it transforms the way brands interact with consumers. Since people make most purchase decisions at the shelf, in-store advertising will reach them just before the "moment of truth".

Sabbagh said: "In-store advertising can increase the effectiveness of a marketing campaign by 'activating' promotions and sponsorships by making them click in consumers' minds."

Today, marketers can advertise on in-store video networks spanning thousands of screens that reach more consumers than major broadcast networks. These ads can be targeted to a specific aisle or at specific time of the day. Targeting by geographic market will allow more granular delivery of marketing messages, reaching specific sets of consumers with the greatest likelihood of buying the product, based on income and demographics.

However, Thomas refrained from committing that in-store advertising will ever replace conventional media. "One can not substitute one for the other and hence I will not discount the relevance of either forms of advertising in a media-plan. I would say in-store advertising plays a complementary role.

"However, in-store advertising is not conventional, but is extremely useful as its effectiveness is at the point of purchase and complements top of the mind re-call of brand communications. It is certainly far more cost effective and its realisation is tangible," said Thomas.

Vachhani, who echoed a similar view, said: "In-store advertising is as effective as conventional advertising. It has some additional advantage as people visiting the stores are already in the shopping mode making it easier for sales. However, we do need the conventional mode of advertising to draw the crowd into our stores."

For other marketeers, "alternative out-of-home spending" will continue to increase as media in outlets such as health clubs or transportation hubs become more prominent and more digitally enhanced.

"We encourage holistic models of investments in our retail venues, which are also accepted best practices in the subject," said Vachhani. "These will include all the in-store opportunities and will certainly yield results creating success stories for all involved, including the brand owner, distributor and the retailer. However, the little agony here is that the advertising agencies are not a beneficiary and they are influencers in any media strategy."

Shops are evolving

Shops over the years have evolved the in-store advertising potential and have gone beyond simple danglers and "bus-stop" posters that are placed next to the products offering special deals.

MediaCart has designed shopping carts that take in consumer data when shoppers scan their loyalty cards into handheld scanners in Wakefern's ShopRite stores. Previous online shopping lists linked to their loyalty card will help consumers find listed items more easily, and will inform them when items they bought in the past are on sale.

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