Screen Test
While online marketers coined the phrase and continuously hone ways to “grab eyeballs,” the real-world battle for attention at shelf level is brutal and becoming more so.
It’s a hard fact that shelf space is finite while the number of brands is increasing. Regardless of channel — grocery, convenience, big box or dollar stores — turf wars drive much of marketing strategy. Trade marketing spend for preferred shelf positioning has hit record-breaking levels (54% of all U.S. marketing dollars went to trade in 2003, or $546.8 billion, according to PROMO’s 2004 Industry Trends Report) as retailers demand — and get — higher fees to lock in shelf and display space.
At the same time, however, retailers have realized that they have more competition of their own, as the big chains grab more real estate and online shopping (e-tailing) regains and exceeds the popularity it enjoyed three years ago.
Some bricks-and-mortar shops have taken a page from their online counterparts and adopted new screen-based merchandising that appeals to tech-savvy shoppers.
While electronics departments in most retailers have always plugged in their televisions to demo their screen quality, it was the advent of DVD technology that prompted brands to tap the in-store audience.
“Having a custom video environment allows us to focus on specific products, increase sales, reduce waste and inform our customers,” says Bryan Rees, merchandise specialist-home electronics for retailer Fred Meyer.
The retail chain recently contracted Seattle-based ScreenPlay to install audiovisual merchandising in 126 of its stores in Washington, Oregon, Idaho and Alaska. The custom package includes film trailers, music videos, game trailers and targeted ads — all for merchandise available in the home electronics section.
ScreenPlay, also provides DVD-based content for such retailers as Blockbuster, CompUSA, FYE (For Your Entertainment) and Harley-Davidson. Typically, the retailer pays up front for a program, then shares ad revenues with ScreenPlay (which would not disclose its pricing formulas.)
But as technology has evolved, not all retailers are content with one-way messaging. For example, Marks Work Wearhouse, a fast-growing apparel chain with over 300 stores in Canada and the northern U.S., has begun placing interactive information screens in its outlets.
While the Calgary, Alberta-based stores originally sold hard-working clothes and work boots for men, Marks now offers more casualwear and women’s apparel in its mall-based and standalone stores. The 25-year old company carries a mix of proprietary (80%), such as its Denver Haze clothing, and outside brands (20%).
“Last spring, our marketing department decided it wanted to show more about the attributes of the clothing — right in the stores,” says Kevin Mathiesen, manager of store design for Marks. “They tried setting up tables and staging hands-on testing and demonstrations of things like fabric stain-proofing and steel-toe boot construction, but it was very expensive.”
The retailer was intrigued by the possibilities of in-store video, but was concerned by the reliance on store sales staff to support DVD technology. “We saw video as a great way to show short clips of our products and their special features,” Mathiesen said. “But we had tried DVD players in some locations and it became a burden for our sales reps.” Store management wanted sales staff working with customers, not trouble-shooting balky video equipment he says.
In May 2004, Mathiesen began working with Digital View, a Morgan Hill, CA-based developer of screen technologies, to develop kiosks and other displays with built-in screens. Unlike its earlier attempts with DVD, Marks let Digital View develop slide shows and full-motion DVD clips that the agency updated and serviced via a broadband Internet connection.
“We’re using the technology to sell our private label nanotechnology [for stain prevention] in six stores so far,” Mathiesen says. “Not only do customers love to push the buttons to move through the menu of topics, but it’s been great for training our staff — which we hadn’t expected.”
Digital View contracted to provide content, screens and kiosk settings to the retailers specifications. Marks plans to put two to five units in all of its high-speed Internet-enabled stores and all new construction, Mathiessen says, up to 80 outlets by the end of 2005. He says the company is exploring ways to mount promotional as well as informational content. (A weather report function is near launch. “Rainy tomorrow on the construction site? Buy your rough-weather gear today at Marks.”)
Other retailers have already begun using interactive screens as a variation of sampling. Last year, for example, Target Stores began positioning Digital View screens in its electronics departments to allow gamers a test ride before buying the newest releases for Xbox, Playstation or GameCube/GameBoy platforms. By late October, broadband-connected screens were in place in about a fifth of Target’s 1,300 North American stores.
According to Ray Reeths, technology manager for Harbor Industries, an integrator that mediates between retailers and display suppliers, Target tracks consumer interest in competing game platforms and in given titles via reports generated through the interactive screens.
“But these [screen technologies] work with low-tech and no-tech products, as well,” Reeths says.
About a year ago, Harbor Industries (Grand Haven, MI) began installations in malls and home improvement centers across the country for client Aquascape. The pond manufacturer wanted to provide how-to advice for home owners in an attractive yet functional way, and contracted with Harbor Industries to install over 200 freestanding displays (with product shelves and screens) in do-it-yourself stores; it added over mall-based 50 kiosks to the contract, to generate leads; and more than 20 elaborate units with built-in waterfalls and ponds.
To the latter, it added a bar code scanner that let shoppers build their project shopping lists. “Aquascape loves that bar code add-on; they tell me they can attribute 20% to 30% of last year’s growth to the info screens,” Reeths says. A hidden button takes in-store staff through a training cycle.
Such point-of-decision (PoD) screens or kiosks, also known as mini-kiosks, are gaining ground in the U.S. marketplace, according to analysis by retail consultants Frost & Sullivan. The New York City-based firm released a report in September entitled U.S. Point of Decision Kiosk Markets, in which it estimated that kiosk units with screens generated $36.4 million in U.S. revenue in 2004.
“In a climate of converging positioning strategies among retailers, the focus on in-store experience as a differentiator is being renewed. PoD kiosks are meeting the need for cheaper and smaller alternatives to the standard full-form factor kiosks,” says Vineeta Kommineni, Frost & Sullivan’s senior research analyst.
But for PoD kiosks to succeed, content must be compelling, Kommineni says. “For maximum impact, that content must be packaged into short sales messages designed specifically for the PoD kiosk.”
Best practices, in terms of content ownership, numbers of messages in a sequence and length of message, haven’t been established yet, she says, but these are emerging quickly as content production houses, retailers and software vendors form alliances.
Reeths says he has seen new interest in interactive kiosk screens coming from the automotive category, both for showrooms and parts dealerships. While some retailers have hesitated over the initial installation cost, most are encouraging brands to help shoulder the cost via co-op dollars. Costco, for example, has installed over 140 units for use as MP3 listening stations, and passed the cost to music distributors Allegro and Genius Products
“We’ve worked with brands and retailers,” says Stu Armstrong, COO of Digital View. Over the past year, his firm has developed programs for Hasbro in Germany, Burger King in the U.K., Kraft and Starbucks for U.S. grocery, and CIBA vision centers.
Another benefit for brands of Web-connected kiosks, Armstrong says, is the opportunity to track compliance with P-O-P protocols. The newest kiosks are now WiFi equipped, and tap into store-based wireless networks. Usage data is transmitted from a store to brand management; this allows message content to be refined per geographic location, day part, or assorted other CRM-oriented concerns. “The kiosks can be a brand’s eyes and voice in the store,” he says.
