April 7, 2008
The Store is the Medium
By Tom Ryan
At a session at last week’s Advertising Research Foundations’s (ARF) Re:think Conference and Expo in New York City, industry executives discussed the many promising developments of the P.R.I.S.M. in-store marketing project as well as the challenges in its successful implementation.
P.R.I.S.M. (Pioneering Research for In-Store Metric) is the retail industry’s most significant initiative to establish a global metric for evaluating the in-store environment as a marketing medium along the lines of Nielsen’s TV, Internet, Box Office and other audience metrics. The Nielsen Company is now spearheading the research.
The project, a computer-linked system of cameras tied to infrared sensors and human counters at retail, is designed to let retailers know how many people are in a store, what time consumers shop most, and how effective advertising in stores is. P.R.I.S.M. will be launched nationwide in July in several stores.
Speakers at the session, entitled The Store is the Medium, were Joel Rubinson, chief research officer, The ARF; Ramon Portilla, senior director, communication insights, Wal-Mart; Peter Hoyt, president & founder, Hoyt Publishing Co.; George Wishart, global managing director, Nielsen In-Store; and Kelly Downey, shopper marketing director, Unilever.
Panelists stressed the value of being able to measure in-store marketing efforts, especially since the media industry has become much more fragmented and consumers exert much greater control over the messages they take in. Better metrics around in-store marketing promises not only to improve the marketing messages aimed at consumers at retail but also help optimize store layouts.
“You can’t set objectives if you do not have a way to measure success,” said Wal-Mart’s Mr. Portilla.
Nielsen’s Mr. Wishart noted that the key is gaining “closure rates” as shoppers walk the aisles in understanding “not only when they but also why they didn’t buy.”
He said CPG companies can learn the value of their investments on in-store marketing programs, retailers can learn how their shoppers shop, and it enables advertising agencies to become a much bigger part of in-store media for the first time.
“The nice thing is that everybody wins,” said Mr. Wishart.
Unilever’s Ms. Downey noted that with P.R.I.S.M., vendors will be able to look at week-by-week data to measure how closure rates vary among different marketing vehicles for different categories and different retailers. It can particularly help in launches to make sure the product is reaching the target customer. Improved score carding also help vendors measure in-store against other advertising media.
“We can actually begin to see what we planned to occur in the store and then what actually happens,” said Ms. Downey. “We can look across retailers and see how a specific merchandising program was actually executed.”
For proper execution, according to Ms. Downey, the project will need a strong commitment from the senior management level since extensive dialog will be required among manufacturers, retailer and agencies. Marketers may have to develop distinct in-store consumer profiles, noting that consumers respond to messages differently inside the store than outside the store with other media. Finally, partners should be wary of “analysis paralysis” because the extensive data becoming available can become unmanageable. Many should even consider third party support to move faster.
“This is going to come at us like a freight train,” said Ms. Downey.
ARF’s Mr. Rubinson said part of the driver behind the PRISM project is that stores have become much more engaging experiences for shoppers.
“It’s no longer just a place to buy things,” said Mr. Rubinson. “It’s a place where you derive satisfaction, where you’re having fun, and where you’re absorbing new information and absorbing messages.”
As such, the overall shopping experience has to reach shoppers at an emotional level.
“The bottom line is shopping is therapeutic,” said Mr. Rubinson. “Shopping is fun. It’s an important part of people’s lives. So let’s not forget that the act of shopping often has as much emotional content for people as the thing they are buying and using.”
Discussion Questions: What do you think vendors and retailers will learn from the P.R.I.S.M. in-store marketing project initiative? Will retailers be able to manage the data effectively? As an advertising medium, how do you think in-store differs from other traditional advertising media?
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Thoughts on two levels: As a basic tool for getting a handle on in-store media, this will be great if the data collection is executed correctly. As an ongoing tracking tool, much less likely to have a lot of value–too much data, too little interest in what the data says (over time).
If P.R.I.S.M. proves that in-store media directly drives sales increases, it will be a huge success. If P.R.I.S.M. is used to prove “softer” data, like number of impressions, building the brand, noting scores, etc., then it will fall into the vast gray area of a lot of marketing research statistics: nice but not an outstanding revenue driver. Retailers and smart brand managers want sales increases. Everything else comes in third.
I have been aware of P.R.I.S.M. from when it was first announced and wasn’t clear how I felt about it. Reading the following in your description, “The project, a computer-linked system of cameras tied to infrared sensors and human counters at retail, is designed to let retailers know how many people are in a store, what time consumers shop most, and how effective advertising in stores is. P.R.I.S.M. will be launched nationwide in July in several stores,” somehow does not ease my concerns.
I have my doubts about a ‘silver-bullet’ system that is supposed to revolutionize retail. Where does the customer enter the equation? Why doesn’t management just go out on the sales floor and engage the customer to find out answers that computers and camera can only interpret?
What about developing a customer satisfaction metric; with the store, its personnel, and the product quality, rather than how effective the advertising is?
Finally, the cool to luke warm responses from the other respondents here, each of whom appears much more knowledgeable about this kind of research and customer tracking than I do, tells me there is much to be doubtful about.
In ’87 the subject of my doctoral dissertation was the store as an advertising medium. I was with Southland Corporation at the time, which paid for my education, and the stores I referenced were 7-Elevens. But the principle is the same. In other words, stores have been considered legitimate ad media for quite some time.
I was lucky, because I could completely shut down a corporately-owned 7-Eleven store and test various in-store setups and programs. Then I could test with both a control group (they wore football helmets with cameras attached to them) and with casual, off-the-street customers whose purchases were recorded and matched to videotapes recorded from outside the store.
The P.R.I.S.M. program must take into account so many uncontrollable variables it makes my head hurt. How will reliable tests be conducted, or will there be any tests? If only real-world data is collected it occurs to me that the stated objective of determining why shoppers choose NOT to buy will be nearly impossible to meet. Determining why they responded positively to a display will be only a little easier. Will aural stimulation be taken into account, like the pace of the in-store music or PA announcements of specials? Will olfactory stimulation be measured, like the scent of fresh-baked bread or the stink emanating from displays of some foreign-made apparel? As another comment mentioned, will the weather be factored into the observations?
It’s interesting and P.R.I.S.M. certainly has been getting a lot of press. Measuring eye balls is important. With mass media, CPG companies determine ROI by total lift across retailers. The way most CPG companies measure ROI for in-store marketing is by how many of the products being promoted they sold while the display was in the store at that specific retailer.
Budgets for the POP programs are determined by assigning a percentage to total sell value of all products on the display. There is no accounting for total reach or residual sales as there is in mass media. If P.R.I.S.M. can offer what they say they will, it is very exciting.
The P.R.I.S.M. data provides exposure to display and media information by location in the store and includes the exposures to the marketing message. POS data doesn’t provide you with the granularity needed to measure the true effectiveness of this type of information. This data will provide a “true” base line for measuring promotional effectiveness, these other in-store conditions will be factored out of the promotion response model.
The one thing that this data did prove was that transaction counts have been a poor measure of audience. Some audience data indicates that at certain times of the day there are twice as many shoppers in the store than there are transactions through the checkout system.
The perception about P.R.I.S.M. is that it will shift dollars from traditional CPG advertising space into retail stores (in addition to the Trade dollars).
Those dollars are moving anyway (see brandedpantry.com) so one question is to where will it go and at least CPG retailers want those dollars to flow into their stores.
P.R.I.S.M. has some proof that they can forecast and project results accurately from sample stores, which allows store traffic to be measured using the same “ruler” as other ad vehicles. What is different about stores of course, is that execution varies greatly across stores and so another set of metrics (execution not just in the sample but across the board) will be a critical component of this new avenue. No current affordable method for measuring this exists.
Soon however, with our bringing some new image recognition systems into the U.S. and the development of the Store Eyes Company we will have a start in this regard.
I can see a limited amount of value in P.R.I.S.M. in terms of its providing reach and frequency figures in a form familiar to ad agency folks, but there is already a much better measure of the effectiveness of in-store promotion–POS data.
Good (and getting steadily better) tools already exist to measure and forecast trade promotional effectiveness. P.R.I.S.M. measures eyeballs, scanners measure sales.
This program just reinforces what marketing is all about: testing and measuring. The data derived from this program has the potential to lead to “tailored made” shopping environments that make finding the right products fun, easy and efficient.
The only major hitch I can see with this is getting the retailers, manufacturers, and marketing people all on the same page. With all the data available, it could quickly turn into a debate of “whose store vs. whose aisle vs. whose products.”
From a customer’s perspective, this could also lead to information overload resulting in them tuning out whatever marketing messages are being broadcast.
I think vendors will learn that in-store impressions are not easily comparable to familiar mass media impressions as presently measured in television or print. Furthermore, the value and qualities of those in-store impressions will vary radically by the type of retail environment, not to mention by shoppers’ individual missions. I expect retailers will learn that their shoppers are not particularly comfortable moving through stores that are bristling with surveillance equipment.
Near as I can tell, the P.R.I.S.M. concept so far doesn’t call for retailers to collect or manage much shopper/audience data–that’s one reason why Nielsen is involved as a third-party provider. Retailers will need to focus on in-store implementation process, to ensure that shopper media measurement is not confounded by missing products or displays. Compliance is king.
A better question than “How do they differ?” would be “Are in-store and mass media comparable at all?” In mass and grocery stores, shoppers are on a utilitarian mission in an already message intensive environment, where time-saving convenience is crucial, and distractions are not always appreciated. This is not TV. Shopper media audiences are not like mass audiences.
Key questions for the P.R.I.S.M. advocates: Are you studying how shopper media make your shoppers feel? At what point will the message seem less like a value-added service and more like an assault? Are you prepared to manage against that metric?
I think this process goes beyond in-store media and shopper buying habits. There is a huge trade budget spent by all manufacturers that is supposed to drive sales in-store. The effectiveness of these dollars has always been difficult to measure in relation to other forms of advertising and promotion. The relationship of trade, in-store advertising and out of store messages can now be measured if the process has integrity and if the concerned parties have the resources to analyze the data and make new decisions on how to reach the consumer.
Let me piggy-back onto Stephen’s answer a bit. He’s spot on about the “too much data” problem but I think there is more reason for concern. Data is only as useful as the filter or interpretative measure applied to it.
Let’s say hypothetically that it rains every Wednesday for a month over a department store in the middle of a busy urban area. Now let’s say I track store census numbers and note that every Wednesday for the past four or five weeks store traffic is up. I might conclude that shoppers prefer to shop on Wednesday when, in reality, they just want to get out of the rain.
It’s never the systems. It’s always, as Stephen points out, the execution and the analytic tools.
From research that I have been exposed to and participated in, the notion of shopping being “fun” or “educational” is only partially true. The shopping occasion can be analyzed according to the motivation of the shopper (at various times referred to the “mission,” “job,” or “purpose” of the trip). If it is a routinized behavior–it is drudgery, obligatory and a chore. Most of grocery shopping falls under that categorization. Little thought to what is being bought, replacement buying, etc. However, there is the other component to shopping where it is information acquisition on what is “new in the market” or what options are available to meet existing needs or future needs. THAT part is more engaging and “fun.”
As for P.R.I.S.M. and the success of the project or output–it is important information that expands upon what is currently tracked and measured and does have application in the industry. However, the ability to assimilate that information and analyze it in context with other information currently being used in the industry is a challenge. Not one that is insurmountable, but with people still wrestling over the understanding of ACV–these nuanced and sophisticated tools are more future than current resources in practicalities for MOST of the industry.
I have moved over from being global thought leader for shopper insights at Synovate to now being Chief Research Officer at the ARF, an industry association of 400+ members from media, advertisers, and research suppliers.
I wanted to host this session at the annual conference because I want to balance off the media perspective that is being energized by web 2.0 with another pretty exciting way of building brands–the in-store environment. I am very interested in evangelizing this to a community that affects the allocation of over $100 billion in spending.
This is incredibly exciting to me and the ARF, and I welcome your thoughts.
I believe a significant obstacle to overcome will be cost–and who pays for it. With my company, the promotional budget is an accrual, based on shipments to the customer. As more tools become available, there is more pressure on this budget on how to pay for everything we are currently doing–plus the new tools. Legitimate or not, my director keeps reminding me that “the pie is the pie.”
Who really knows what retailers and vendors will learn from the P.R.I.S.M initiatives? That’s a good question but it is an intellectual question…and intellectual questions are vital to continuing progress. So they must be explored. We evaluate systems and execution of each new thing that retailers and vendors could and should be doing to be more effective. Still I sometimes wonder if a bit too much time, brainpower and money are being spent on determining what’s inadequate with retailing and retailers today rather than investing our own “corrective dollars” in retailing and actually participating on the retail battlefield that we all wish to improve. And yes, P.R.I.S.M does have potential value if all conditions are right.
At Intelsaleswork.com we have approached many retailers with new business intel products such as this one and they aren’t interested. Why? It’s more information than they need, when the focus is now on customer service, having enough sales and revenue getting staff, etc, for NOW, not after an evaluation period with new technology. Stores are looking at what succeeds to get the shopper in on a regular basis, and it’s going back to the essentials involving price and quality that we find are affecting a store’s in-store traffic…not spending patterns and frequency, no matter how good the technology.
In addition to the P.R.I.S.M project, Arbitron is also ramping up new systems that will measure the reach of in-store media. New software programs are also making it easier for media buyers to create targeted buys based on geography, demographics, etc.
The combined impact of all of these trends should at the very least result in more attention to the store as a medium. With more dollars and more intelligence driving these efforts, retailers should be able to provide more targeted content and relevant offers that will help educate consumers and improve the shopping experience.
P.R.I.S.M. is an exciting idea with a lot of buzz surrounding it, as you have read by the previous comments. It goes without saying that most everyone recognizes the “store” as a viable medium so will this in-store measurement tool be the missing piece of the puzzle or just another layer of confusing data that mis-directs the retail environment and all that it encompasses. Time will tell.
If nothing else, maybe P.R.I.S.M. is the rough draft that will be followed by others and improved upon, which is usually what happens in this industry.
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Thoughts on two levels: As a basic tool for getting a handle on in-store media, this will be great if the data collection is executed correctly. As an ongoing tracking tool, much less likely to have a lot of value–too much data, too little interest in what the data says (over time).
If P.R.I.S.M. proves that in-store media directly drives sales increases, it will be a huge success. If P.R.I.S.M. is used to prove “softer” data, like number of impressions, building the brand, noting scores, etc., then it will fall into the vast gray area of a lot of marketing research statistics: nice but not an outstanding revenue driver. Retailers and smart brand managers want sales increases. Everything else comes in third.
I have been aware of P.R.I.S.M. from when it was first announced and wasn’t clear how I felt about it. Reading the following in your description, “The project, a computer-linked system of cameras tied to infrared sensors and human counters at retail, is designed to let retailers know how many people are in a store, what time consumers shop most, and how effective advertising in stores is. P.R.I.S.M. will be launched nationwide in July in several stores,” somehow does not ease my concerns.
I have my doubts about a ‘silver-bullet’ system that is supposed to revolutionize retail. Where does the customer enter the equation? Why doesn’t management just go out on the sales floor and engage the customer to find out answers that computers and camera can only interpret?
What about developing a customer satisfaction metric; with the store, its personnel, and the product quality, rather than how effective the advertising is?
Finally, the cool to luke warm responses from the other respondents here, each of whom appears much more knowledgeable about this kind of research and customer tracking than I do, tells me there is much to be doubtful about.
In ’87 the subject of my doctoral dissertation was the store as an advertising medium. I was with Southland Corporation at the time, which paid for my education, and the stores I referenced were 7-Elevens. But the principle is the same. In other words, stores have been considered legitimate ad media for quite some time.
I was lucky, because I could completely shut down a corporately-owned 7-Eleven store and test various in-store setups and programs. Then I could test with both a control group (they wore football helmets with cameras attached to them) and with casual, off-the-street customers whose purchases were recorded and matched to videotapes recorded from outside the store.
The P.R.I.S.M. program must take into account so many uncontrollable variables it makes my head hurt. How will reliable tests be conducted, or will there be any tests? If only real-world data is collected it occurs to me that the stated objective of determining why shoppers choose NOT to buy will be nearly impossible to meet. Determining why they responded positively to a display will be only a little easier. Will aural stimulation be taken into account, like the pace of the in-store music or PA announcements of specials? Will olfactory stimulation be measured, like the scent of fresh-baked bread or the stink emanating from displays of some foreign-made apparel? As another comment mentioned, will the weather be factored into the observations?
It’s interesting and P.R.I.S.M. certainly has been getting a lot of press. Measuring eye balls is important. With mass media, CPG companies determine ROI by total lift across retailers. The way most CPG companies measure ROI for in-store marketing is by how many of the products being promoted they sold while the display was in the store at that specific retailer.
Budgets for the POP programs are determined by assigning a percentage to total sell value of all products on the display. There is no accounting for total reach or residual sales as there is in mass media. If P.R.I.S.M. can offer what they say they will, it is very exciting.
The P.R.I.S.M. data provides exposure to display and media information by location in the store and includes the exposures to the marketing message. POS data doesn’t provide you with the granularity needed to measure the true effectiveness of this type of information. This data will provide a “true” base line for measuring promotional effectiveness, these other in-store conditions will be factored out of the promotion response model.
The one thing that this data did prove was that transaction counts have been a poor measure of audience. Some audience data indicates that at certain times of the day there are twice as many shoppers in the store than there are transactions through the checkout system.
The perception about P.R.I.S.M. is that it will shift dollars from traditional CPG advertising space into retail stores (in addition to the Trade dollars).
Those dollars are moving anyway (see brandedpantry.com) so one question is to where will it go and at least CPG retailers want those dollars to flow into their stores.
P.R.I.S.M. has some proof that they can forecast and project results accurately from sample stores, which allows store traffic to be measured using the same “ruler” as other ad vehicles. What is different about stores of course, is that execution varies greatly across stores and so another set of metrics (execution not just in the sample but across the board) will be a critical component of this new avenue. No current affordable method for measuring this exists.
Soon however, with our bringing some new image recognition systems into the U.S. and the development of the Store Eyes Company we will have a start in this regard.
I can see a limited amount of value in P.R.I.S.M. in terms of its providing reach and frequency figures in a form familiar to ad agency folks, but there is already a much better measure of the effectiveness of in-store promotion–POS data.
Good (and getting steadily better) tools already exist to measure and forecast trade promotional effectiveness. P.R.I.S.M. measures eyeballs, scanners measure sales.
This program just reinforces what marketing is all about: testing and measuring. The data derived from this program has the potential to lead to “tailored made” shopping environments that make finding the right products fun, easy and efficient.
The only major hitch I can see with this is getting the retailers, manufacturers, and marketing people all on the same page. With all the data available, it could quickly turn into a debate of “whose store vs. whose aisle vs. whose products.”
From a customer’s perspective, this could also lead to information overload resulting in them tuning out whatever marketing messages are being broadcast.
I think vendors will learn that in-store impressions are not easily comparable to familiar mass media impressions as presently measured in television or print. Furthermore, the value and qualities of those in-store impressions will vary radically by the type of retail environment, not to mention by shoppers’ individual missions. I expect retailers will learn that their shoppers are not particularly comfortable moving through stores that are bristling with surveillance equipment.
Near as I can tell, the P.R.I.S.M. concept so far doesn’t call for retailers to collect or manage much shopper/audience data–that’s one reason why Nielsen is involved as a third-party provider. Retailers will need to focus on in-store implementation process, to ensure that shopper media measurement is not confounded by missing products or displays. Compliance is king.
A better question than “How do they differ?” would be “Are in-store and mass media comparable at all?” In mass and grocery stores, shoppers are on a utilitarian mission in an already message intensive environment, where time-saving convenience is crucial, and distractions are not always appreciated. This is not TV. Shopper media audiences are not like mass audiences.
Key questions for the P.R.I.S.M. advocates: Are you studying how shopper media make your shoppers feel? At what point will the message seem less like a value-added service and more like an assault? Are you prepared to manage against that metric?
I think this process goes beyond in-store media and shopper buying habits. There is a huge trade budget spent by all manufacturers that is supposed to drive sales in-store. The effectiveness of these dollars has always been difficult to measure in relation to other forms of advertising and promotion. The relationship of trade, in-store advertising and out of store messages can now be measured if the process has integrity and if the concerned parties have the resources to analyze the data and make new decisions on how to reach the consumer.
Let me piggy-back onto Stephen’s answer a bit. He’s spot on about the “too much data” problem but I think there is more reason for concern. Data is only as useful as the filter or interpretative measure applied to it.
Let’s say hypothetically that it rains every Wednesday for a month over a department store in the middle of a busy urban area. Now let’s say I track store census numbers and note that every Wednesday for the past four or five weeks store traffic is up. I might conclude that shoppers prefer to shop on Wednesday when, in reality, they just want to get out of the rain.
It’s never the systems. It’s always, as Stephen points out, the execution and the analytic tools.
From research that I have been exposed to and participated in, the notion of shopping being “fun” or “educational” is only partially true. The shopping occasion can be analyzed according to the motivation of the shopper (at various times referred to the “mission,” “job,” or “purpose” of the trip). If it is a routinized behavior–it is drudgery, obligatory and a chore. Most of grocery shopping falls under that categorization. Little thought to what is being bought, replacement buying, etc. However, there is the other component to shopping where it is information acquisition on what is “new in the market” or what options are available to meet existing needs or future needs. THAT part is more engaging and “fun.”
As for P.R.I.S.M. and the success of the project or output–it is important information that expands upon what is currently tracked and measured and does have application in the industry. However, the ability to assimilate that information and analyze it in context with other information currently being used in the industry is a challenge. Not one that is insurmountable, but with people still wrestling over the understanding of ACV–these nuanced and sophisticated tools are more future than current resources in practicalities for MOST of the industry.
I have moved over from being global thought leader for shopper insights at Synovate to now being Chief Research Officer at the ARF, an industry association of 400+ members from media, advertisers, and research suppliers.
I wanted to host this session at the annual conference because I want to balance off the media perspective that is being energized by web 2.0 with another pretty exciting way of building brands–the in-store environment. I am very interested in evangelizing this to a community that affects the allocation of over $100 billion in spending.
This is incredibly exciting to me and the ARF, and I welcome your thoughts.
I believe a significant obstacle to overcome will be cost–and who pays for it. With my company, the promotional budget is an accrual, based on shipments to the customer. As more tools become available, there is more pressure on this budget on how to pay for everything we are currently doing–plus the new tools. Legitimate or not, my director keeps reminding me that “the pie is the pie.”
Who really knows what retailers and vendors will learn from the P.R.I.S.M initiatives? That’s a good question but it is an intellectual question…and intellectual questions are vital to continuing progress. So they must be explored. We evaluate systems and execution of each new thing that retailers and vendors could and should be doing to be more effective. Still I sometimes wonder if a bit too much time, brainpower and money are being spent on determining what’s inadequate with retailing and retailers today rather than investing our own “corrective dollars” in retailing and actually participating on the retail battlefield that we all wish to improve. And yes, P.R.I.S.M does have potential value if all conditions are right.
At Intelsaleswork.com we have approached many retailers with new business intel products such as this one and they aren’t interested. Why? It’s more information than they need, when the focus is now on customer service, having enough sales and revenue getting staff, etc, for NOW, not after an evaluation period with new technology. Stores are looking at what succeeds to get the shopper in on a regular basis, and it’s going back to the essentials involving price and quality that we find are affecting a store’s in-store traffic…not spending patterns and frequency, no matter how good the technology.
In addition to the P.R.I.S.M project, Arbitron is also ramping up new systems that will measure the reach of in-store media. New software programs are also making it easier for media buyers to create targeted buys based on geography, demographics, etc.
The combined impact of all of these trends should at the very least result in more attention to the store as a medium. With more dollars and more intelligence driving these efforts, retailers should be able to provide more targeted content and relevant offers that will help educate consumers and improve the shopping experience.
P.R.I.S.M. is an exciting idea with a lot of buzz surrounding it, as you have read by the previous comments. It goes without saying that most everyone recognizes the “store” as a viable medium so will this in-store measurement tool be the missing piece of the puzzle or just another layer of confusing data that mis-directs the retail environment and all that it encompasses. Time will tell.
If nothing else, maybe P.R.I.S.M. is the rough draft that will be followed by others and improved upon, which is usually what happens in this industry.