Shopper traffic to grocery stores remains below pre-COVID-19 levels, and expectations are that it will remain under pressure. This is due to the accelerated migration of shoppers online, especially in categories such as paper products, cleaning supplies and canned foods. These trends put pressure on the sales productivity of brick-and-mortar stores, which in turn means that in-store promotions must resonate with shoppers like never before.
The physical store has a unique and powerful role in the shopping journey – one that can’t be replicated online. Consumers visit the grocery store to see and touch the merchandise, discover and try new products, get ideas and inspiration from the vibrant store atmosphere, and take advantage of offers and deals only available in the store. Visiting stores also meets many shoppers’ definitions of convenience.
Price promotions and in-store visual displays have long been recognized as powerful and proven tools for CPG brands and retailers to convert store traffic into incremental sales. When deployed effectively, promotions and displays can help drive more customers to the store and, once they’re there, engage and motivate them to spend more.
To maximize the impact of their investments in in-store promotions and displays in a post-COVID-19 and increasingly omnichannel world, retailers and CPG brands should pursue three innovative and effective in-store promotion and display strategies:
1. Connect Promotions and Displays with the Omnichannel Journey to Drive Maximum Impact
Too often, marketing campaigns are planned and activated in siloes, with no coordination or integration of the message, the offer or the experience, which target the same consumer across different contexts of the shopping journey. The result is both a disoriented customer and wasteful, low-ROI marketing spend.
Instead, marketers should be integrating in-store activations with other campaigns running in the same store and with out-of-store media and promotions. In-store signage and displays have the power to amplify and monetize marketing investments made in other media channels, and vice versa.
An example of such innovative coupling of marketing tactics is Mountain View, Calif.-based Quotient’s recently launched Promotion Amplification Tool, which uses a dynamic connection to a retailer’s point-of-sale, loyalty and temporary-price-reduction (TPR) pricing data to programmatically activate digital media campaigns that advertise in-store discounts that are often overlooked by consumers.
Another example is the digitally connected merchandising solution that New York-based Barrows created for a leading grocery chain in the United Kingdom. As with all Barrows Connected Store touch points, the unit features attractive visual design and engaging video content, as well as traffic and interaction metrics generated by built-in sensors. Its broadband connectivity enables it to link with the retailer’s other live campaigns and deliver exclusive loyalty messaging and offers. For example, loyalty members can scan a QR code and receive an instant discount for the merchandised products in line with the retailer’s price match campaign, which monitors and matches in real time prices in competitors’ stores.
2. Maximize the Power of In-Store Display to Minimize the Need for Discounts
Price promotions, be it TPRs, coupons or rebates, are effective marketing tools, but they can be expensive and quickly eat away at manufacturers’ and retailers’ already thin margins. The ideal approach is to generate as much consumer interest and purchase intent with other non-margin-eroding tools that deliver a better, more relevant customer experience, and only resort to price discounts as a final push that offers the least amount necessary to convert the customer.
The concept of supercharging shopper campaigns using “crossover” tactics that combine promotion with merchandising isn’t new. Instant redeemable coupons (IRC), which are attached to the product or its packaging, are one such vehicle that has been around for decades. While other coupons reach consumers by mail, in a newspaper insert or via digital channels, shoppers discover IRCs at the store during the “first moment of truth” – that is, when they see the product on the shelf.
This unique in-store positioning drives the superior performance of IRCs. IRC redemption rates are consistently around 20%, which is typically two to five times higher than that of other popular physical and digital coupon formats. IRCs deliver that kind of performance even though they offer the smallest discounts and require the lowest purchase minimums compared with other coupon types. Brands end up spending a lot less on the IRC promotion to achieve the same or better results, just because they leverage the power of in-store merchandising and engagement.
In-store displays and merchandising, especially digitally enabled ones, have been shown to drive significant increase in shopper interest, engagement, trial and conversion, even without an accompanying incentive offer. Barrows’ connected end caps have shown consistently that this innovative digital in-store merchandising technology drives 12-15 seconds of high-quality dwell time by customers who engage, and ultimately results in 15%-25% incremental sales lift for the merchandised products. When a promotion – such as a chance to win a cash prize – is layered on, the lift jumps to 30%-35%.
3. Rethink Displays and Promotions, From Tactical Expenditures to Strategic Investments
In-store marketing activations have traditionally been regarded as a tactical, “bottom-of-the-funnel” final push to convert shoppers into buyers. They haven’t been treated as a strategic and ongoing component of the brand’s overall conversation and interaction with its target audience. Often, they are executed by shopper teams who aren’t integrated with the central brand teams, and whose budgets are, in many cases, leftover funds from national media activations.
As a result, in-store activations, including displays, sampling and promotional events, have been approached with a transactional, temporary, near-term mindset – which is ironic, given how critical the in-store environment is for brands to engage customers and build long-term relationships and loyalty. The other side effect of this dynamic has been the wasteful, inefficient nature of in-store physical signage, displays and promotions. Retail displays contribute more than 2 billion pounds of cardboard waste each year.
“Designing with the end in mind is the only way we can shift our linear ‘take, make, waste and,if you’re lucky, recycle’ economy into a circular, sustainable system,” says Brent Taylor, global CEO of Barrows. “Our displays, both digital and physical, are engineered for continuous reuse and ongoing, rather than temporary, activations. This way, we can truly deliver higher-quality, longer-lasting solutions that cost less and free up resources.”
In the area of in-store sampling, Freeosk offers a novel product. The Chicago-based company’s digitally enabled free-sample kiosk delivers one-to-one interaction with a consumer through a mobile device or loyalty card ,and has been a welcome solution during the height of the COVID crisis, when in-person interactions with shoppers were impossible or unwelcome. Further, the attractive unit that combines product merchandising with automated sample dispensing has enabled both retailers and brands to make a strategic investment in free sampling as a powerful shopper marketing vehicle and incorporate it in their broader strategic interactions with customers.
Another powerful example for making a strategic, long-term in-store investment is the collaboration between The Livekindly Collective, a global leader in the plant-based food sector, and Barrows. The digitally connected plant-based food solution center that Barrows created for the category allows The Livekindly Collective to showcase its full brand portfolio and inspire consumers with ideas, recipes and meal solutions. It’s a first-of-its-kind “always on” in-store activation that elevates shoppers’ engagement with this new category, drives consumer education, recipe adoption and new product trials; and ultimately delivers superior results for the brands while growing the entire category.
“We made a deliberate decision to establish a strategic presence and a prominent destination inside the store with our pioneering plant-based solution center, powered by Barrows,” says Kees Kruythoff, chairman and CEO of The Livekindly Collective. “The ability to bring it all together and demystify the category, and to engage shoppers with familiar, tasty, convenient and affordable meal solutions is key to achieving our mission, which is to make plant-based living the new norm and shift the global food system to a sustainable one.”
Another benefit of brands making a strategic investment in-store is that it enables more flexible, efficient and targeted execution of their promotional tactics. For example, digital merchandising solutions enable brands to offer attractive visuals and engaging digital content, but also turn promotional offers on and off in real time with no additional labor cost, since the digital content is all managed remotely in the cloud.
By adopting these strategies, brands and retailers can transform their in-store promotions and displays into better integrated, more efficient and strategically important components of their overarching brand strategy, and drive significantly improved outcomes both in the store and across the omnichannel shopping journey.