WHAT'S IN STORE FOR BRANDS?

Imagine a supermarket in which product displays reach out, interact with and even recognize certain consumers.As outlandish as it may seem, it's the future of brand marketing, industry observers say."The store of the future needs to have in-store media that almost grab consumers by the neck and say, 'Look at this!"' said John Stanton, professor of food marketing at St. Joseph's University in Philadelphia.As

Imagine a supermarket in which product displays reach out, interact with and even recognize certain consumers.

As outlandish as it may seem, it's the future of brand marketing, industry observers say.

"The store of the future needs to have in-store media that almost grab consumers by the neck and say, 'Look at this!"' said John Stanton, professor of food marketing at St. Joseph's University in Philadelphia.

As traditional mass media continue to lose their effectiveness, more engaging forms of in-store marketing will be necessary, Stanton said. For this to happen, however, retailers and manufacturers need to treat the store in an entirely new way.

"In the past, retailers have thought about their stores in terms of real estate," Stanton said. "Now they have to think about them in terms of media value."

This requires turning the retail landscape into a living environment, said Tom Pirko, president of Bevmark, a Santa Ynez, Calif.-based consulting firm.

The industry is moving away from inert, dead retail space to stores that are filled with interactive devices that provide one-on-one brand communication with consumers, according to Pirko. Such options include 3-D display images that float out in front of consumers who walk by and respond when someone moves or talks. On a higher level, cell-phone technology could be used to let displays recognize and interact with consumers, he said.

"This makes the supermarket as we've known it for the last 50 years look like something out of a crypt," Pirko said.

Technology will certainly be a factor driving the change. But even simple adjustments to traditional in-store marketing programs will shape the future of branding. To a large degree, solutions-based offerings will be critical.

Take Apron's at Publix Super Markets in Lakeland, Fla. The program features weekly recipes for "simple meals," which are demonstrated in-store and sampled free to shoppers. Featured ingredients are stocked in a nearby display, and recipes are published on a card that includes a shopping list and can be saved in a recipe binder available at the store.

"This is a smart way to connect the store to the consumer," Stanton said.

Indeed, in-store merchandising that leverages natural adjacencies will play a greater role over the next few years, said Lisa Klauser, vice president of "Brand Building with Customers," a new marketing group of Unilever U.S., Englewood Cliffs, N.J.

"You're going to start to see more merchandising solutions that capitalize on the mind-set of the shopper, vs. traditional single-product displays that don't make any sense," she said.

So, rather than simply stocking lettuce in the produce section, stores could showcase a "salad-occasion" display that includes dressings, croutons and related products, said Paul Thompson, partner at Henry Rak Consulting Partners in Chicago.

What works for one store may not succeed at another, however. That's why brand marketers will also need to get smarter at micromarketing, adapting their product assortments and store formats to meet the needs of an individual store's consumer base, Thompson said.

Like Klauser, Gerry Glasgow, vice president and chief marketing strategist for E&J Gallo Winery in Modesto, Calif., sees more communication that positions brands in the context of consumer lives.

"Brands need to create excitement or solve problems," Glasgow said.

Gallo is trying to do that with a new in-store program that's rolling out at Albertsons, Boise, Idaho, and will be expanded to other retailers next year. It places non-branded signs reading "Don't Forget the Wine" in various store departments, such as meat and produce. Wine from Gallo and other wineries is cross merchandised, as are recipe cards. "We're subtly suggesting to consumers as they shop throughout the store that there are many different opportunities to buy wine for different food accompaniments," Glasgow said.

Key to the success of solutions-based promotions like this one is learning what's motivating shoppers. This involves understanding how they shop and the relevance of brands and categories. Manufacturers then need to develop ways for retailers to turn that information into actionable marketing plans, Klauser of Unilever said.

"We're doing this already at Unilever, and you're going to see other companies do it more as the retail landscape shifts and changes," she said.

Shopper insight research has already told Unilever that there will be greater need for brand messaging using displays, signage and the like at the point of purchase. While national-brand marketers will continue to use traditional mass media, there will be more emphasis on the retailer as a communication channel.

"There's a shift in marketing dollars from other forms of marketing to driving brand equity at the store," Klauser said.

As this happens, there's also going be less focus on product price, promotion and performance, and more emphasis on the emotional aspects of a brand, noted Marc Gobe, chairman and chief executive officer of Desgrippes Gobe Group, New York, a brand image and creation firm. Gobe is also author of the books

"Emotional Branding" and "Citizen Brand." Emotional branding means using a brand as a catalyst for change so that people can feel better about themselves, he said.

"People are not going to be buying products just for functional value," Gobe said. "They're going to look at products that make a difference in their lives."

Take Red Bull energy drink. Consumers don't just view it as a thirst-quencher. They see it as a product that will give them more strength and, as a result, help them accomplish more in their lives, he said.

"People are looking at brands that can bring about emotional satisfaction," he said.

That's what the new national ads for the Dove brand accomplish, Gobe said. The ads feature models with "real" bodies in contrast with the pencil-thin image of beauty.

"Dove has a point of view about how women feel about their lives," he said.

Along with individual brands, the entire retail store needs to excite and provide a sensory experience for consumers, Gobe said. Retailers like Stew Leonard's in Norwalk, Conn., do this well. In contrast to the over-processed image of national brands, the three-store retailer presents its products as authentic, farm-fresh and produced on a small scale, he said.

Eighty percent of Stew Leonard's products are either made from scratch on-site daily or brought in fresh daily, according to Stew Leonard Jr., president and CEO. Stew Leonard's most well-known brand is its fresh milk, which earned the retailer the nickname "The Disneyland of Dairy Stores."

"Customers can literally buy milk that was milked from a cow six hours earlier," Leonard told SN.

Along with its products, Stew's has turned itself into a brand consumers feel good about through its in-store gimmicks, including store mascots that greet customers; audio animatronics characters that talk, sing and dance; and seasonal events like its annual Christmas tree lighting and Halloween haunted hayride.

"The brand is felt through the great experience customers have when they walk through our stores," said Rich Lung, director of advertising at Stew Leonard's. "The dramatically lit displays, on-site food preparation, signage, animated shows and happy team members are all a part of the experience and strengthen our brand."

Brand Customization

Along with changes to the inside of the store, marketers will need to make deeper brand connections before the consumer even leaves the home.

Discounts or savings that are household-specific will be critical, said Jon Robertson, president of Retail Systems Consulting, a division of Ogden Associates, Morristown, N.J.

"There needs to be more meaningful programs that the customer wants to participate in," he said.

Robertson predicts more emphasis on programs like e-VIC from Harris Teeter Supermarkets in Matthews, N.C. Developed by Charlotte, N.C.-based Circular Logic, e-VIC is an e-mail service that notifies customers when items they regularly buy are on sale. The e-mails contain a link to a Web page that enables e-VIC members to create a customized shopping list to take to the store.

"It's like having a personal shopper scan the weekly ad and identify your best deals," Harris Teeter promotional materials read, in part. A spokeswoman for the retailer declined to comment.

Kroger also is attempting to connect with shoppers in a more individualized way. Through a partnership with Dunnhumby, a British loyalty marketing firm, it's analyzing frequent-shopper data, segmenting its best shoppers into different categories, and sending them relevant offers and information.

Media fragmentation has made it necessary for brand marketers to personalize their messages to consumers, said Glenn Hausfater, managing partner at Partners in Loyalty Marketing, a Chicago-based marketing consulting firm.

"Retailers will need to communicate why they're different from other operators in the market," he said.