Trends in Media Advertising and In-Store Merchandising

If brand marketers and retailers don't get in each other's way, in-store marketing should be poised for major growth.With mass media continuing to fragment and technology bringing an end to the era of passive ad viewing, the recognition of the store as a marketing channel is stronger than it ever has been.But with chains desperately seeking to differentiate themselves to consumers and brands using any means necessary to establish presence in the store, the retail environment is becoming as cluttered -- and as potentially ineffective -- as other media.These were some of the major takeaways provided by two speakers at the Institute's second annual P-O-P Senior Executive Congress, held April 28-30 at the Green Valley Ranch in Las Vegas.As the ability to build brand equity through television advertising continues to wane, "what's going on in the store becomes key," says J.P. Beauchamp, vice president of integrated testing services for Information Resources Inc. (IRI), Chicago.The number of TV channels available in the average household has risen from an average of 17 in 1985 to 90 today. Meanwhile, advertising levels have increased from 18% to 29% of total airtime as the average length of individual commercials declines (15-second spots are becoming the norm).The resulting clutter has seriously eroded advertising recall and, therefore, brand awareness, explains Beauchamp. Now that overall TV viewing is dropping, and the use of digital video recorders (such as TiVo) rising, "mass media" might well be an oxymoron, he suggests.Brand marketers have been hesitant to scrap an advertising model that has existed for decades, but with the costs of TV advertising rising each year, "this can't happen for many more years," says Beauchamp. "As [marketers] move away from the 30-second commercial, they're going to want to get closer to the store."Studies measuring the effectiveness of in-store marketing activity are on the rise and currently comprise about 20% of IRI's testing workload, Beauchamp says.Is the Store Ready?However, the store's ability to serve as a brand-building medium won't be achieved unless retailers and their product vendors develop effective, mutually beneficial strategies, according to Steve Frenda, executive vice president of sales and business development at Mosaic InfoForce, Chicago.Retailers in the supermarket, drug and mass channels put an unprecedented number of products on display in 2003, according to Mosaic's Display Express Insights in-store auditing service. "Clean-floor policies are being abandoned to react to Wal-Mart's value proposition," says Frenda.The average number of displays per store, however, did not increase as quickly, which means that more products are being stocked on each display. (See the accompanying charts.) That trend reduces the impact of any single display and the potential benefits for any one brand receiving placement; it also contravenes retailer efforts to create effective and unique store environments, and can erode customer satisfaction and sales by intensifying the potential for promotional out-of-stocks, Frenda says, adding that "CPG manufacturers have failed to respond to this threat."The dilemma is currently evident within the merchandising of low-carb products, which "has been a little bit of a runaway train" as manufacturers pump out healthier SKUs in a bid to save market share, while retailers scramble to develop image enhancing and sales-boosting strategies, he says. "It's currently a treasure hunt to find low-carb items in the store."To address these problems, manufacturers must "see with a retailer's eyes" by offering marketing programs that provide total-store solutions rather than simply maximizing exposure for their own brands, says Frenda. Retailers must acknowledge that properly executed brand programs can improve shopper satisfaction and enhance the store experience.Among the possibilities are merchandising programs reflecting changing consumer lifestyles or cooking occasions that address specific shopper needs, he says.

Trends in Media Advertising and In-Store Merchandising

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