retail

Six Dimensions of Shopping Time

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When retailers seek to optimize the shopping experience and understand channel choice, much consideration is given to aspects of convenience. The literature generally breaks this down into two core elements: effort and time. For brick and mortar stores, the goal is to make shopping as easy as possible, and attractively quick, but not so fast that sales opportunities are missed during the shopping trip. In a multichannel environment, the puzzle gets more intricate.
Shopping time covers multiple factors, including hours of operation, travel time, search time, time to check out, delivery time, and time to return. So time-saving convenience is highly conditional:

  • A mother will drive across town to a 24-hour drug store at midnight when she has a sick child, but she may leave a convenience store when faced with a long checkout line during the morning coffee rush.
  • An electronics shopper may spend hours researching flat screen TV prices online but grow impatient when forced to wait 10 minutes for sales help at the local electronics superstore.
  • A discount store shopper may watch TV at home four hours a day, but will attend to an in-store digital screen for exactly eight seconds before moving on to the next purchase task.
  • An online shopper will gladly wait three days for free delivery of a purchase from a multi-channel retailer, but grow agitated waiting five minutes to return the same item at a local branch store.

These examples are illustrations of what I observe to be six dimensions of shopping time. The academic literature generally identifies four of these:

1) Time to access (i.e. to reach the store or shopping site)
2) Time to search (i.e. to identify and select product to buy)
3) Time to transact (i.e. to complete the purchase transaction)
4) Time to possess (i.e. to physically obtain the purchased merchandise)

This classification may not reflect a complete picture of the influence of time on consumers’ retail channel choices however. I would add two additional time elements to the list:

5) Time of operation (i.e. days and hours that the retailer may be patronized)
6) Time of return (i.e. to return an item for refund or credit).

Considering these time factors is especially important as we reason about the choices shoppers make between options in a multichannel environment. It takes minutes to find and order a book on Amazon.com – even at midnight – versus an hour or more to stop by Borders during business hours and search the shelves, but the Borders shopper may leave with the book in hand, while the Amazon.com shopper waits days for delivery. Which is more convenient? Well, it depends…what did the shopper need most at that moment?

Leading multichannel retailers give deep thought to understanding this complex of time-saving behaviors. The best evidence that I’ve seen is the growth of “order online, pick up in store” service offerings at some consumer electronics retailers. Instant gratification is still a motivation, but shoppers like the protection from stress that comes with pre-shopping on line in the calm safety of the family den.

Shoppers’ time-related behaviors, I think, are relatively independent of current economic conditions. In general they will choose the options that suit their need states of the moment. At the same time, we may observe that some shoppers will devote more time and effort to planned shopping trips by clipping coupons, preparing lists, and advance online price comparisons, especially as retailers continue to make these activities as time-efficient and easy as possible.

But the general rule (and its inverse) still applies in retailing: Time is more valuable than money for shoppers who have more money than time.

© Copyright 2009 James Tenser

Next Era for In-Store Implementation

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Expanded Educational Role, Case Study Effort
The In-Store Implementation Sharegroup is expanding membership and redefining its mission. The decision follows the overwhelming response to the April 2008 release of the Working Paper, In-Store Implementation: Current Status and Future Solutions. To date, the group has received more than 600 inquiries and dozens of membership requests.
To harness all of this positive energy, it is creating a new, more inclusive vehicle for the group, the In-Store Implementation Network. The ISI Network will continue and expand upon the work of the ISI Sharegroup. An e-letter last week outlined the following mission:

  • Continue to research and publicize ISI issues
  • Develop and share ISI case studies and superior practices
  • Research effective and practical ISI tools
  • Promote education on Implementation and at-retail compliance
  • Share learnings through industry conference presentations 
  • Maintain an ISI knowledge resource for members 
ISI Network membership opportunities will be communicated shortly. If you haven’t yet joined the free ISI email list, you are invited to do so now at http://instoreimplementation.com, where you may access more detailed information and many document downloads.

Coordinating the ISI Network and expanding its base is a major focus for my firm, VSN Strategies, and I consider it a privilege to be associated with the founding member companies. In coming months I anticipate playing a key role in advancing the group’s educational and communications missions.

The In-Store Implementation initiative will assume a high profile in 2009. It is a multi-billion dollar industry opportunity that may be realized only through concerted efforts of many in the retail and consumer products industry. The ISI Network will be a channel for that energy.

© Copyright 2009 James Tenser
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The Value Pyramid of Shopper Media

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Measurement schemes are coming thick and fast from various groups claiming to have the last word on measurement of shopper media. At last count at least three groups were competing over this:

The P.R.I.S.M. (Pioneering Research for an In-Store Metric) project, originally organized by the In-Store Marketing Institute (www.instoremarketer.org) in 2006, has been an important catalyst for the marketplace. Now in phase II, a 26-week market test, the stated goal is to develop an “in-store GRP” or gross rating point, aimed at a identifying a comfortable metric for the media buying establishment. With strong support from Nielsen In-Store and numerous large brand marketers and ad agencies, P.R.I.S.M. is a leadership voice in establishing a standard for store-level data.

Not to be outdone, OVAB, the Out-of-home Video Advertising Bureau, (www.ovab.org) released its Audience Metrics Guidelines report in August. The report advocates an “average unit audience” principle for measuring digital media in various physical settings that incorporates both opportunities to see and variable units of viewing time appropriate to each viewing context.

POPAI, the Point-of-Purchase Advertising Institute, which bills itself as the “global association for marketing at retail,” (www.popai.com), released its report, Digital Signage. The Global Study. Opportunities and Risks in August in conjunction with the German association, GIM (Gesellschaft für innovative Martkforschung). The scope is broad – on the global digital out-of-home (DOOH) marketplace, and the focus is again largely on audience measurement.

In addition, Digital Signage Today (www.digitalsignagetoday.com) released a sponsored report, Measurement and analysis for digital signage, that explores audience measurement and proposes a multi-tier way of looking at in-store ad value, encompassing proof of ad delivery, proof of audience delivery and sales uplift. There’s promise in this approach, I think.

All these measurement studies attempt to bring welcome rigor to the realm of shopper media metrics. It’s widely understood now that simply counting the number of people who walk in the front door of a store does not adequately document an audience. Nor does it come close to reflecting its value to advertisers using an in-store network. P.R.I.S.M. has introduced a useful scheme for dividing a retail store into messaging “zones” or channels corresponding to merchandise departments and high-traffic power alleys. This is a welcome refinement versus a people-counter at the front door, but I think it’s only a step toward the ultimate requirement, a sales and ROI sensitive measurement system.

Audience metrics are necessary, but not sufficient. The Shopper Media ROI Pyramid, pictured here, presents a conceptual framework for a more robust value metric:

O2C: At the base are “opportunities to see” – communications that have reach and frequency only. This is what the PRISM initiative has learned how to measure in Cost Per Thousand Impressions. This is a metric best expressed in some analog to gross rating points (GRP). It reflects how many messages are sent and the theoretical size of their audience. O2Cs are cheap and plentiful – and, like “traditional” media, linked tenuously to actual sales lift.

View: Next up are views that can be actually proved. Some current shopper media are capable of metering actual views through use of electric-eye people counters, embedded cameras, shopping carts with embedded RFID tags, digital image analyses, etc. This is a “page view” metric, to use a Web metaphor – greater in number than O2C but still relatively low in individual value.

Do: Next up the scale are communications that stimulate some kind of interaction that might precede a sale. This may include pressing a touch screen for further information, taking a coupon or “take-one”, trying a sample. This is a “click-through” metric, fewer in number but of greater value to marketers.

Buy: Next up the pyramid are communications that may be directly related to product trial or sale. This “purchase” metric will be more scarce, but even more valuable.

Loyal Behavior: At the pinnacle are in-store communications that contribute not just to a single purchase but to enduring affective and behavioral change. We call this loyalty, and it is rarest and dearest of all. Loyalty may only be detected by a marketer with a plan – a frequent shopper card program or other longitudinal tracking mechanism capable of linking together multiple purchase events by the same shopper.

As a marketer, I would require that all these layers be measured and modeled so that I can truly understand the ROI of my in-store communications. As a retailer hosting these messages, I would require that I get paid in accordance to the value delivered at each of these levels. As an in-store network operator, I would seek a way to justify compensation at each level as well. As a brand marketer, I would pay almost any price for provable sales ROI metrics and probably donate a vital organ for reliable proof of loyal purchase behavior.

My opinion? Opportunities to see are a poor proxy for measuring sales lift and repeat purchase behavior. I’m unimpressed by in-store GRPs and believe shopper marketers will require direct ROI measures. If this prospect makes the media buying establishment feel a bit queasy, I say get over it. It’s a digital world. Sampling and averages reflect outdated, analog thinking.

© Copyright 2008 James Tenser

It’s NOT TV!

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SHOPPER MEDIA – digital and not – are one class of tools for shopper marketing. Almost any in-store message, measured in isolation in a controlled test, can deliver a sales lift. In this mode, the message does its magic by “activating” shoppers’ pre-existing propensity to select an item or a brand. Or to put it in crude terms–it helps them to notice the product, then buy it.

Not rocket science. Retailers today can use very simple and low-cost digital display systems to promote their higher-margin store brands this way. They can measure the success of this activity at the POS and prove ROI. It’s a very valid and easily attainable use for digital shopper media.

Walmart’s network provides a channel for brands. With 140 million shoppers per week, it claims network-sized audience numbers. No doubt it sells some incremental product, but it is profitable up front because what it really sells is audience access to advertisers. It’s got impressions by the megaton, which may seem attractive and familiar to advertisers, but not so much to promoters.

For 2009 I foresee a rise in awareness of shopper media for promotional purposes – with applications that will slash technology and content production costs and deliver a higher, clearer return on investment: Small screens, not large. Locations at the point of decision, not in lobbies or power aisles. Store brand focus on par with national brands. And tailored to shopper experience – not an assault on the senses.

The new in-store audience measurement methods are designed to help agency media buyers feel better about spending their client’s ad dollars on a media environment they really don’t understand. “Customization” in this context seems to mean playing different messages in different areas of the store or during different dayparts. I suppose breaking a large store up into virtual “channels” this way holds some validity, but it feels forced to me.

Despite the glowing screens, this is not TV. It’s a mistake to carry the metaphor too far in the retail environment. And there are marvelous opportunities ahead for retailers to deploy shopper media as integral elements of their selling machinery and shopper experience.

© Copyright 2008 James Tenser