Retail Media: Matching Solutions with Realities

There has been an abundance of excitement recently about creating an in-store media metric, which will allow us to begin capturing the traditional media dollar via consumer reach in stores. In sync with this is the concept that media buyers on Madison Avenue, who control the millions of dollars now being directed into alternative out-of-home channels, will be able to work within the retail media landscape much like they work within other media channels. If we can accomplish both, we truly establish the "store as media." As much as we all want to secure an influx of media spending within store venues from traditional broadcast budgets, there are some potential pink elephants dancing around the topic that many seasoned retail veterans are chatting about. These elephants are causing some concern, primarily because we all want to help evolve store communications. However, there is a fear that we unknowingly are walking into some landmines. Some of these issues will ultimately work themselves out, but others will need attention. Right or wrong, it's prudent to get these issues on the table so that we as an industry can look hard at the ones that might be deal breakers -- and get ahead of them before they are. Of key concern are the following:The Role of the Agency and the Store. Traditional agencies plan and buy advertising media with the goal of attaining brand awareness via reach and frequency. If all has gone as planned, the advertising does its job and drives people to the store so that the final goal is met: sales. Hopefully, people within the stores have pleasant experiences and leave happy with products they either wanted or delightfully discovered. Retail is not a traditional advertising medium; a store is a venue for selling merchandise and, increasingly, creating experiences. One thing people have never done is visit stores with an intent to watch advertising. However, many in the industry are touting this concept quite strongly -- or at least assuming that it's possible.Media is evolving. Traditional advertising media are going through the beginnings of a radical evolution. Most forward-thinking marketers believe that we are not far from a world of "pull" rather than "push" marketing, where relevance and consumer acceptance will be critical. The measurement will be behavior -- be it recognition, experimentation, purchase, word of mouth advocacy or loyalty. That said, it would make sense for us to build retail media principles with this as our roadmap.The store has established gatekeepers for communications and promotion. Although no single internal retail department "owns" the store, merchants often have the most influence. And they aren't about marketing, but selling. This makes sense, because the merchant understands which products move and works closely with the brands he sells to ensure that:the product is right for the store's shoppers.their promotional messages are integrated effectively across all channels. the message and creative will resonate.Within certain retailers, the merchants must work with an internal team that carefully protects what signage will be approved. This is an outcome of an active movement to "unclutter" store environments, and the trend is increasingly strict standards. We must carefully weigh the cost of non-endemic advertising against consumer experience. Consumers don't go to stores looking for products that aren't there. If we push non-endemic product advertising on them, we must ensure that it does not detract from the store experience. If it's a promotion or product that we know will be welcomed, add value or perhaps entertain people in line, we're doing right by shoppers. If we put something out there that they would TiVo out if they could, why put it there? If we underestimate our media-savvy consumer by doing this, we risk making them feel exploited. They'll know that we're not putting their interests first and simply seeking to make money from "viewership."The store is not a new media vehicle. It's an established channel that we are retrofitting as a media vehicle. When we faced adoption barriers for internet media, it was a new channel. The store is a channel that has existed for decades. We can't stamp it with traditional media nomenclature, methodologies and measurements and expect it to work for the teams that currently operate within it. It's just not that easy.Working within the current merchandising process is vital. Everyone involved in retail media has the same goal: market adoption of new store technologies and consumer touchpoint mechanisms. However, we must define what in-store media is. And as I've already pointed out, one thing that it's most certainly not is a pure advertising play. To further understand why this is such a big challenge, you must first understand and respect how retail store promotions currently work. Further, you need to embrace why they work that way and find a path within those established processes. When a consumer product brand wants to get into a retail store, there most commonly is a conversation between brand sales and the retailer to understand the featured product, why it is right for that store, what space it requires and for how long, what will occur within other integrated marketing channels and what price can be negotiated. Pricing is rooted in many factors, but is highly influenced by how attractive/in demand the product is (or could be), seasonality, trade dollars and/or the relationship between the two camps (brand and retailer). Once pricing is negotiated, the messaging and creative is hashed out between the two, both ensuring that their needs are met and that they will hit the consumer via all likely contact points. In most cases, neither the pricing nor the results are openly shared with the public. The key point to understand is that this is an established process between retailer and brand sales. It is not a retail marketing team/ad agency process. These two sides have worked together in this manner for decades and they are both focused on sales.Further flaws in the strict advertising viewSimply look around. Consumers are screening out the advertising clutter as quickly as we create it. They are taking control and they like it that way. The media that they do pay attention to have one thing in common: it meant something to them in the context in which it was experienced. In a store, consumers are not on a couch. They are distracted, busy, and either on a mission or leisurely shopping. They don't need to be made "aware" of a brand; they need a compelling reason to care about the product and, ideally, to buy it. And they're only going to devote three to seven seconds (what Nielsen calls the "Delta Moment") to any communication, so the messaging had better be on the mark.The advertising industry knows that the old days are numbered and is looking for innovative ways to face this challenge -- some more successful than others. This is a new challenge, as the media/advertising industry was always in control of the consumer sitting on the couch or reading print media. Unless they were direct marketing or Internet experts, agency professionals were only held accountable for reaching eyeballs - which is the obvious reason why reach (or GRPs) is being considered the default strategy for in-store media.Finding a path to successThere are two realities at work here: most stores need to evolve and most ad agencies need to evolve. The big issue: although they both say that they want to evolve, change is scary and it's going to take a concerted, cross-functional effort to do so. Getting there is going to be challenging, but worth it.From my perspective as an industry vet, the advertising industry now understands that data and relevance will be key to the future of marketing. The once "red-headed stepchildren" in the ranks are starting to look like princesses. These are the direct marketing and interactive specialists who live and breathe customization and targeted messages. Via targeted, data-driven principles, we have the opportunity to leapfrog current advertising/media challenges and go right to a model for success in-store. This is a model of behavioral merchandising across all media, where people receive messages based on who they are, what they like and what can add value to their lives. Stephen Quinn, senior vice president of marketing at Wal-Mart, summarized these points in a recent Advertising Age article: "We've got an aging and increasingly diverse population. Marketing and customer trends have conspired such that no customer really wants to be treated as part of a mass market anymore. [Consumers are] more and more in control of the entire process. They want their store and experiences to reflect their own values and geography and needs. The customization need from a marketer's standpoint and from a retail standpoint has become more important. "We are increasingly recognizing the store as a really powerful medium. Clearly we are seeing fragmentation, and one size does not fit all. Our store is one of the biggest [media] out there, not only for us but with our partners. We need to look at this as a mirror and see to it that the medium is reflective of what the customer wants and that it accommodates her needs and best reflects our brand story. We want to partner with our best suppliers to bring their brand story into the store without creating a chaotic experience."If we look at all of these pink elephants closely, the biggest one is this: why are we anticipating that brands are going to pull millions of dollars from traditional TV broadcast and insert them into the store via traditional media buying agencies simply to obtain reach? And, what makes us assume that the current store constituents will allow this to happen?Other than a handful of agencies that have built specialty retail divisions, most have never understood -- much less cared about -- the store. Why wouldn't brands instead transfer dollars to their internal sales teams -- the people that do live and breathe the store -- to increase promotional funding and branded activities? They are the folks that know how to move people along the purchase path from awareness (eyeballs) to sales through integrated promotion. This is not to say that agencies shouldn't be closely involved and develop more groups with niche retail expertise; they are brilliant brand and idea people and are critical to the planning process. And, we can obviously learn from the best practices of direct and interactive agency experts. However, let's be careful in assuming that media agencies will take the lead point for retail media strategies and buying and upend the status quo in the store process.The more we respect and understand how retail teams currently operate, the easier it will to be to bring constituents together to develop the store as it's own, unique medium. Laura Davis-Taylor, a veteran advertising and retail-design professional, is the founder & principal of Retail Media Consulting, an Atlanta-based consultancy that provides "Marketing at Retail" strategy, execution, integrated media planning and brand planning services.

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