IN-STORE INSIGHTS

Traditional in-store marketing efforts may, to some extent, be victims of their own success. Many in the industry feel the average supermarket is overcrowded with signs, banners, floor graphics and other advertising media that make it difficult for any one marketing message to break through.But new in-store media technologies, such as electronic signage, coupon dispensers and interactive kiosks, are

Traditional in-store marketing efforts may, to some extent, be victims of their own success. Many in the industry feel the average supermarket is overcrowded with signs, banners, floor graphics and other advertising media that make it difficult for any one marketing message to break through.

But new in-store media technologies, such as electronic signage, coupon dispensers and interactive kiosks, are helping retailers cut through the clutter to successfully get the right message out and build impulse sales. Industry experts believe that to make in-store marketing truly effective, retailers will have to draw on the data gathered via frequent-shopper programs to shape promotions, pricing and offers for individual customers or customer groups.

Retailers can already do this with interactive kiosks tied to their customer-loyalty database, which can offer coupons targeted to individual customers based on their demographic data and purchase history. These require the customer to use the kiosk on each trip, however.

Future refinements include using smart-card technology, which stores this customer data on an embedded microchip. Such a system could employ radio frequency technology to "read" the information from the card itself, and would be able to offer personalized promotions via shelf tags or coupon dispensers as the customer walks the aisles. Electronic signage could even remind a customer that it has been a while since she purchased paper towels, or suggest buns to go with the hot dogs the customer scanned two aisles down with a handheld self-checkout device.

In addition, emerging technologies could also be used to offer different in-store promotions to customers based on their purchasing levels and overall buying habits. For example, a customer classified as someone who is price-sensitive and who will switch brands based solely on cost could have a coupon dispensed for a different brand of soap than the brand that was purchased last month.

The next customer walking by, identified as "brand-loyal," might be offered a more modest coupon or a "buy three-get one free" promotion for the brand he or she always purchases.

Observers also predict that in-store promotions of the future will be based on the total amount each customer spends with the retailer. They envision promotions similar to airline frequent-flier programs, where preferred customers are offered preferential treatment in the form of exclusive products or services.

"People want to feel they are special, and that can be accomplished with in-store promotions that pamper your best customers," said Milton Merl, president of the consulting firm Milton Merl & Associates, New York.

While Merl said this kind of in-store promotion is tricky -- for instance, an electronic pricing system that offers different prices to different customers could complicate an already complex system -- he added that proper execution could make the personalized shopping experience a reality.

Small displays mounted on shopping carts that are triggered by RF technology, for example, could display personalized prices and promotions.

Savvy retailers are already using shelf-talkers, coupon-dispensing devices and other in-store marketing devices to achieve strategic goals, such as spurring meal solution sales and driving customer traffic throughout the store.

With computers and printers becoming more affordable and easier to use, hastily written hand-lettered placards are giving way to professional-looking signs incorporating colorful photos and logos, using not just the product's distinctive graphics but the retailer's as well.

Having sophisticated technology at the store level means signs and other in-store promotions can be changed daily, if needed, and can be customized to local markets.

In addition, no space in the supermarket is going unused. Order separators for checkout conveyer belts are touting products and movies with colorful graphics. Large floor graphics draw shoppers' attention to new brands of cookies or cereal.

"Breaking through the clutter, being entertaining and capturing attention are critical elements for an in-store promotion to be truly impactful," said Doug Adams, vice president of Prime Consulting Group, a Bannockburn, Ill.-based consulting firm.

Whatever the technology used, retailers are learning that in-store promotions need to do more than simply point the customer toward this week's specials. "In-store promotions have to direct the consumer around the store," said a source familiar with this area. "Customers don't have time to read the ads any more, and they are spending less and less time in the store, from an average of 2.2 times a week down to 1.8 times a week."

Retailers have to make every minute a customer is in the aisles count. "People don't go up and down every aisle like they used to because there is no time," the source added. "You need in-store promotions to be visible from one department to another department. The supermarkets that are going to win are the ones that make their stores easy to shop."

Retailers need to include sign design and placement as part of their overall marketing strategy, sources told SN. For example, promoting a meal solution that combines frozen vegetables with chicken means ensuring that signs can be seen from both the frozen foods and the meat departments, or putting signs promoting the other meal solution element in each area.

Knowing which items are frequently purchased during the same shopping trip will also be a key to in-store merchandising. For example, beer and diapers are often bought during the same "fill-in" shopping trip, so a beer promotion could go in the diaper aisle. Retailers also need to be sensitive to the overall demographics of their shoppers in planning in-store marketing. For example, "Cooking oil is primarily in the baking aisle because it is sold with cake mixes and baking items," Adams said. "However, in a store with a large Hispanic population, cooking oil is sold alongside the beans and rice. "Taking information about how your customers shop and tailoring your in-store promotions and signage to local concerns is key," he added.