The new face of in-store advertising.
"Stores seemed to get away from point-of-sale during the 70s as they embraced the austere, sterile-clean look," says Robert Chipman, director of marketing for AdMedia International in Midvale, Utah. "But stores have realized that they lost sales without point-fo sale material. The pendulum is now swinging back, and grocers are using more and more in-store material."
Along with increasing sales, many of the new-fangled point-of-sale products generate extra revenue that travels directly to the bottom line. Eager to support their multi-million dollar advenising campaigns at store level, manufactures are willingly paying grocers a stipend to position point-of-sale messages over displays.
Point-of-Sale Goes Digital
Digital signs, which serve many purposes in the modern supermarket, are in the forefront of this new point-of-sale push. Billboard-style exterior signs can announce specials or run image advertising telling consumers about the type of shopping experience that will greet them in the store. Inside the store, small digital signs can be placed on top of service counters or hooked onto gondolas to catch the attention of shoppers.
Exterior signs that transmit electronic messages--onve used almost exclusively by banks--are expanding into the supermarket industry. There are many advantages to these signs, including: larger character sizes than manual message boards; the ability to flash or move messages, creating greater awareness; and the easy adaptability of the message. These signs can be changed on a keyboard either at headquarters or inside the store, a far easier system than having workers climb onto the conventional type sign and manually change the message.
Chains with exterior signs at numerous stores can change the messages at up to 179 sites simultaneously by using a computer console marketed by Tele-Ad, a division of Integrated Systems Engineering of Logan, Utah. The Tele-Ad system stores 320,000 characters of information at each display terminal, and even permits the transmission of logos, pictorials, animation and cartoons.
Integrated Systems Engineering also produces a sizable indoor electronic display that can be used at the entrance or front end to communicate with consumers. A similar system is marketed by SignLine, a division of Universal Gym Equipment of Cedar Rapids, Iowa. These matrix displays, which can perform a variety of functions, average 5 feet by 2 feet in size.
"The matrix boards can be used as a public service system. They can show messages such as 'Thank you for shopping with us.' They can list the hottest price specials and so on," says Linn Bartunek, SignLine's Western sales manager. "A store could even buy the board and sell advertising time on it to manufacturers and local groups."
Selling space is not such a bad idea as most supermarkets record more than 10,000 customer visits a week, making them a natural place for local merchants to advertise. An electronic ad inside a busy store would be seen by more consumers than a print ad in many small-town or suburban newspapers.
But the prices of these big boards can be quite costly, sometimes topping $10,000. Less expensive and smaller LED displays are recording much greater penetration in the grocery industry.
LED message display boards, which usually are 2 to 4 inches tall and 2 to 3 feet long, add merchandising pizzazz throughout the store. Bartunek notes, "These small message boards can be placed on a stand, hung on a wall or from a gondola, or set on top of a service counter." The price of a SignLine message display ranges from $1,000 to $1,500, depending on the number of units purchased.
So far, the most pronounced usage of electronic message displays has been in service departments particularly deli, bakery and seafood. The signs have proven very effective in these service sections because of the ever-changing price specials that must be communicated to shoppers and the passive nature of the consumer exposed to the message. Somebody standing in line to be waited on will always read the message. He or she is easily encouraged to purchase the advertised item.
"A service counter is the ideal location for these signs," says Sandy Goldman, division manager of the P.O.P. Network, a Beltsville, Md.-based division of SMI Corporation. "The counters put the sign at eye level and the message is exposed to people already inclined to make a purchase in that department."
The P.O.P. Network has been working with Safeway's Washington, D.C., division to test the effectiveness of the electronic message displays. One LED display was put in each of 10 deli departments to determine the effect each would have. Eight ad spots were divided between items that Safeway was selling on special and products being promoted by Hormel or other deli companies. Goldman says the electronically advertised products sold on average 20% more than in control stores.
"The signs were most effective when reminding shoppers of products on sale by the store," says Goldman. "The extra exposure that the message gave to the products reinforced what the customers may have seen in a newspaper ad. The messages were more effective when tied in with products directly below the sign, less effective when suggesting a related item displayed elsewhere.
"People quickly become accustomed to the sign. They rely on the electronic medium to inform them what the specials are," Goldman says. Safeway has been so pleased with the test results that the chain plans to install LED signs in all 110 deli departments in the Washington, D.C., division.
Following the lead of Cybemetic Data Products of Chatsworth, Calif., the largest manufacturer of indoor signs in the world, many firms are making LED signs for use in retail stores. One of those is Turn-O-Matic of Palo Alto, Calif., which is now marketing a message display unit called Scan-O-Matic. Scan-O-Matic allows an average of 18 characters per display, and will blink, walk, flash, wipe or roll to new messages. The messages are proprammed on a word processor type keyboard.
A sign sold by Grocers' Fixtures and Equipment Co., Washington, D.C., can be programmed with a keyboard resembling a pocket calculator. The Info 102-B system features 10-character display. Simpler than many systems, it is also less costly, retailing at $299 a sign.
Turn-O-Matic also sells a digital numbering system for service departments. Not only is the system more visible to shoppers than the manual numbering system popular in the past, it also allows customers to browse in adjacent departments or even in a grocery aisle and still keep track of the number being served. The Turn-O-Matic system includes a ticket dispenser, a take-a-number sign, a counterstand, a digital indicator, a transformer wire and a pushbutton.
Signs That Produce Dollars
Although not as eyecatching as the electronic signs, a mini-explosion has also occurred in the usage of more traditional point-of-sale materials. Point-of-sale signs have become money producers as retailers can now receive dollars, instead of a pat on the back, as compensation.
"Supermarket operators eke out a living on the tiniest margins, so any extra revenue offered by manufacturers is welcome," says Chipman of AdMedia International. "Supermarkets have a valuable commodity that they can sell--the thousands of consumers who shop their stores every week. More grocers are opting to tum their markets into an advertising medium by permitting manufacturers to back their ad campaigns with material at store level."
AdMedia's Storeboards division has placed paying point-of-sale signs in approximately 8,000 supers. The company contacts national advertisers such as Procter & Gamble and Miller Beer to determine whether they wish to be guaranteed that certain companies and stores will display their point-of-sale materials. "The manufacturers are tired of mailing expensive point-of-sale signs that end up in the garbage can," notes Chipman.
Storeboards' sales force visits the stores, sells the concept and even hangs the signs when requested. The poster-size signs can be attached to windows and doors, or can be hung from the ceiling over special displays, endcaps or standard gondolas. Retailers can use as many or as few of the posters as they wish.
Each store is compensated based on its number of weekly transactions. On average, the stores that Storeboards services have 11,000 transactions each week and receive approximately $30 for each sign.
Kroger, Winn-Dixie, First National and King Kullen are among the chains currently using the Storeboards program. Wholesales offering the system include Certified Grocers of California, Super Valu and Red Owl. The wholesalers recommend the service to their independent accounts because it provides the stores with an additional source of revenue.
Time is money for supermarkets using Superclock, a product marketed by Van Wagner Advertising of New York City. More than 4,000 Superclocks are currently displaying the time and ads in supermarkets around the country, including Acme, A&P, Purity Supreme, Pick 'n Save and Kroger.
"The Superclock is a perfect advertising vehicle because it utilizes dead space that could not possibly serve any other purpose," says Jason Perline, president of Van Wagner. Most stores hang the Superclock over the front end, where it can be seen by customers throughout much of their shopping trip and as they wait to check out. On average, shoppers see the clock six times during a normal store visit, according to studies.
The Superclock combines a highly visible clock, imprinted with the store logo and a "thank you for shopping" message, with a backlit advertising transparency. The 2-foot by 7-foot clock is mounted 8 feet off the floor.
The Superclock is available to any supermarket with at least $3 million in annual sales, or at least five checkouts. Each installation comes with a guaranteed minimum income of $50 per month, or 25% of net advertising revenue, whichever is greater. "This is all at no cost to the supermarket. The Superclock network offers 'found money' to a retail operation," says Perline.
Van Wagner handles the selling and placing of advertising on the Superclock. Advertisers normally purchase the Superclock network on a rotation basis, choosing to saturate a market during a two- to four-month period. A recent study conducted by an independent research company at 20 supermarkets in Boston showed that the Superclock increased sales of Le Menu frozen entrees by 25% during a 12-week period. Says Perline, "Superclock reinforces an advertiser's media message at the moment when consumers are making their purchasing decision."
A side benefit is that most advertisers taking out space on the Superclock sell cigarettes, heer, soft drinks, frozen food and other high margin items. As well as getting revenue by renting out ad space on the clock, the retailer also makes more through increased sales of these profitable product lines.
Selling Through Sound
Shoppers' ears are also being bombarded by more advertising in the supermarket. Buoyed by the DuPoint/POPAI finding that almost two-thirds of purchasing decisions are made in the store, advertisers are seeking additional media. They are increasingly using in-store broadcasting systems to transmit messages from manufacturers.
Instore Broadcast Advertising (IBA) of Buffalo has been one of the most successful audio advertising concerns. Currently in 1,100 supers in five Northeastern marketing areas, IBA claims to offer the least costly advertising medium available to reach the prime audience of the packaged goods industry.
IBA's broadcast message repeater units automatically intersperse 20-second advertising spots at five-minute intervals, delivering 12 spots an hour. While most spots are sold to manufacturers, the retailer can also buy time to promote high profit items or departments in the store. Grocers do not get paid for the manufacturer advertising on the broadcast system, but they do receive a free system and are spared the personnel and production costs involved in putting together a broadcast program.
The firm's greatest penetration has been in western New York state. IBA says it has systems in 198 supermarkets in metropolitan Buffalo that account for 97% of food dollar sales in that market. In the Rochester trade area, the broadcast service is in stores accounting for 88% of food sales. The company also has systems in stores in metropolitan New York, Philadelphia and the Cleveland/Erie area, and it plans to enter the Boston, Chicago and Los Angeles markets in 1985. Participating manufacturers range from the Pork Producers Council to Thomas J. Lipton to the New York State Lottery.
Stores that still wish to maintain internal control over the messages broadcast to shoppers can now make their own pre-recorded announcements with the Mini Persuader available from Phi Technologies of Oklahoma city. The Mini Persuader can be programmed for 60 different selling messages, which can be played as often as every two minutes, or as infrequently as every two hours.
The Mini Persuader allows a store to maintain the personal touch of having a store or departmental manager make a special announcement over the public address system, without forcing these employees to take time from their duties. It also guarantees an announcement will be made at a specified time.
Whether for sight or sound, the new faces of in-store advertising are increasingly showing up in supermarkets. As grocers become more sophisticated in their approach to merchandising and selling, even more advanced point-of-purchase phenomenon will undoubtedly come along.
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|Date:||Dec 1, 1984|
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