Through a network of desktops, laptops, monitors and televisions throughout the store, shoppers can research information on products just as if they were at their home or office computer.

 Comp USA has opened 32 stores featuring the Retail 2.0 shopping environment.

It may seem counter intuitive to provide shoppers with this much information in the store because you typically you want to be your shopper’s primary source of information and you don’t want them to compare and possibly see a better price elsewhere.  However, shoppers are doing this anyway before they get to the store.  Many come equipped with their Internet research in hand. So the idea is, if you can’t beat ‘em, join ‘em.  What has been coined as social retailing is about something very different from traditional retail.

The presentation below designed by Mobminds is a primer on the social retailing trend and why it might be important to your store.

What in-store elements most influence a shopper to choose one brand or product over another?  What is the best means of introducing a new product and motivating a shopper to add it to their basket?  Our informal reader poll highlighted just a few instore marketing tools. Instore experience and signage came out the clear winners.  However, the answer is that all of the instore communications tools have varying degrees of importance for creating impact with the shopper. 

The value of one versus the other depends on the product, the shopper demographic, the retail channel and the objective of the retailer or manufacturer.  In addition, one type of communication may be necessary to compliment another and drive the message home to the shopper.  Miller Zell’s Elements Report examines the impact of various instore marketing elements and their influence by generation, income and channel.  Unfortunately instore communications elements are often segmented in the retailer’s mind.  There fore, one vendor may be employed to develop a retail strategy, another to develop the retail design, yet another to install displays while some other firm develops a digital media program.  This becomes a costly version of the telephone game where the client’s objective has to be explained over and over and is interpreted in as many different ways.  At the end of the day, none of these individual suppliers can be held accountable for the total success or failure of the program.  Instead metrics have to be isolated for each portion of the process which does not provide an accurate picture of the collective value of the program elements.  This is a loss to both the retailer and the marketer. 

Integrated store development can eliminate many of the issues that arise from the typically fractured retail execution process.  This method links strategy, design, prototyping and refinement, production of fixtures, décor and graphics, installation/program management and accountability.  This holistic approach also makes it easier to facilitate ongoing improvements such as new ideas, products, displays and graphics, making continuous concept renewal a way of life.  And with the fickle tastes of today’s consumers concept refinement and reworking happens more often than it used to. 

The present store development and renovation process used by most retailers has changed little in the last fifty years.  It does not provide for maximizing the impact of all the tools that can influence shopper behavior.  It is slow, expensive and permits little accountability for results.

Emily Byron interviewed Fabrizio Fredo, CEO of Estee Lauder for The Wall Street Journal.  Fredo explained his effort to remake the iconic Estee Lauder brands beginning with consumer research and understanding the shopping experience from the shopper perspective.  One of the biggest insights to come out of their research is that communicating prices to consumers through signage boosts sales.  This is very different for beauty counters which are typically a full-service, luxury experience.  Estee Lauder’s beauty brands like Clinique are synonymous with personal service.  However, Fredo has found a more hands-off approach to be a successful departure.

“It allowed the consumer to make up her mind without having to ask the price,” said Freda.  “This takes embarrassment away. Surprisingly, most consumers said, ‘I didn’t know it was so affordable.’” 

Going forward, the company is investing heavily in consumer research as part of his initiative to remake the brands and expand the customer base.  The company is already reaping the benefits of customizing their store experience to consider the various trip missions and shopping styles of their customer.

“At Bloomingdale’s new Clinique counter in New York, you can have full service from a consultant, analysis from a computer or browse on your own. A corner called Clinique Express provides product replenishment. So far the counter is doing well.”

Byron reports that sales in the most recent quarter are up 11%.

Retailing in general and food retailing in particular is in a strange position: Retailers own the physical store space, they attract shopper traffic to the store and they provide store services necessary to complete sales transactions. 

Yet, despite all that retailers do to facilitate transactions, they are strangely dependent on brand owners for promotional activity and for their profitability. Nowhere is this more true than in supermarket retailing, so let’s focus on that. 

Supermarket retailers, of course, undertake advertising campaigns to boost store traffic. These campaigns generally come in the form of item-and-price messages and image impressions, whether by means of print, broadcast or internet. But these efforts are paltry relative to the advertising muscle flexed by brand owners. And for good reason: Manufacturers are far more revenue-productive than retailers, so they are well able to pour funds into advertising. Consider these measures: Four strong supermarkets and four leading consumer packaged goods (CPG) manufacturers have nearly equivalent revenue, in the aggregate, but the CPGs produce more than nine times as much profit and have about 15 times the market value per dollar of revenue as compared to the retailers. 

More fundamentally, advertising by CPG companies is aimed at boosting brands, not retailing venues. As a result, brands’ advertisements boost brands across the entire range of supermarkets and other retailers in consumers’ catchment area, so no one store benefits particularity, since all benefit. That situation underscores why all stores are essentially required to have heavily advertised brands in their product range. Retailers must offer what shoppers seek.

 There is a commonality between advertisements mounted by stores and brands, though. The common element is that messages appearing in paid media — whether print, broadcast or internet — are removed in time and place from the actual time and place that shoppers make buying decisions. How could it be otherwise? After all, print, broadcast and internet messages appear in many places, but none are anywhere near the point of sale, nor do they manifest at the time purchasing decisions are made by consumers.

 Conversely, and to the upside, there’s in-store media of many sorts. All of it resides at the point of sale. Indeed, the store itself is doubtless the most powerful sales medium that exists because the messages it projects — whether intentional or not; whether negative or positive — occur precisely where shoppers are making their buying decisions. And, although a few consumers make shopping lists and adhere scrupulously to them in picking product, the vast majority are susceptible to in-store influences. Fully 70% of shoppers make numerous buying decisions while in the store.

 Those decisions are driven by factors such as the introduction of new items, cross merchandising, alternative-product offers and reduced-price activities. Each of these decision drivers work only in with the use of in-store media. In short, it’s next to impossible to overestimate the power of in-store media.

 Now let’s return to a point previously made: Supermarket retailers tend to allow others to control messages, and this is also true of in-store messages. To be sure, some retailers have programs that include shelf-talkers, store graphics and other devices to influence buying decisions at the point of purchase. In the main, though, retailers depend on manufacturers to provide in-store messages, and they reap manufacturers’ payments to install in-store messages, or permit manufacturer-paid third-party providers to do it.

 Moreover, most in-store messages, whether produced by a manufacturer or a retailer, involve cents-off offers for specific brands, or perhaps for store brands. Such messages do little to promote incremental sales. Instead, those messages are more likely to spark brand-purchase swapping, a situation that does nothing to drop revenue to stores’ bottom line, and which may accomplish the reverse. 

 What’s needed, then, is an in-store media form that lifts shoppers’ eyes above the fray of cents-off marketing and that encourages incremental purchasing with each shopping trip. Ideally, such media would focus on retailers’ most profitable products along with those products that differentiate one store from the next in shoppers’ minds.

 What are those products? Clearly, those products are store brands and perimeter departments; in fact, perimeter departments are in many ways de facto store brands because consumers view most product categories there — meat, dairy and produce — as retailers’ own brands.

 In response to that need, Miller Zell (MZ), an Atlanta-based retail-marketing firm, has developed an in-store marketing initiative. It’s called Direct Selling Media (DSM).

 Here’s how DSM works from the shoppers’ perspective: As shoppers proceed through the store, they encounter multiple ideas in the form of product messages. Each of these messages contains unique, unexpected and welcomed ideas with products that have been combined in a simple idea or recipe. The idea is completed with an appealing photograph of the finished product and also contains photographs of all product packaging that makes up the idea. So, as shoppers approach each of the meal components, they’re prompted to select incremental product. The effect is to cross-merchandise products and categories without having to reset a store to gain physical adjacencies.

 The DSM system is particularly effective for high-margin store brands and perishables. That’s because in-store vendor materials are usually absent from those categories. However, selected branded goods could be added to the product mix as needed to fulfill the cross-merchandising strategy and boost total-category sales.

 DSM does more than promote increased sales; there also are intangible benefits the program hands retailers: Chief among them is the gratitude of shoppers who recognize that a retailers has shown them a new and simple means to fulfill their quest for meal solutions. The program also gives store associates talking points useful for engaging consumers.

 Further, DSM’s operational aspects are effortless from retailers’ viewpoint. That’s because the installation of the graphics needed to power the DSM program is entirely the responsibility of MZ, which has a team of installers that will travel to a store group to put up the graphics, and change them periodically. In-store execution reaches unusually high levels: Between 95% and 100%.

 MZ requires a fee-for-service from retailers for DSM, but it also offers a guaranteed-sell feature: During a pilot evaluation period, if the sales lift of promoted categories fails to more than cover the cost of the program, MZ reduces its fee accordingly — down to zero — so virtually no risk accrues to retailers.

 The sliding-fee structure means DSM is a program that is established with the means to measure performance, a feature that’s commonly lacking with any messaging or advertising initiative. Here’s how that’s done: MZ encourages retailers to install the program in a certain group of stores and to hold back installation in a group of similar stores, thereby forming a control group.

 After a time, it’s easy to measure the category-sales performance of the DSM-enabled stores by comparing like-to-like periods and by comparing to control stores. DSM’s performance is measured by category sales because product similar to featured product may be selected by shoppers; it’s category lift that counts.

 MZ did a test installation in ten stores with a regional grocery retailer. Product featuring in those stores produced sales lifts of categories and products that were impressive: 127% up in frozens, 80% in oatmeal, 55% in eggs, and much more.

 Retailers: DSM is a proposition that’s guaranteed to lift category sales. It permits you to take control of your own store and its invaluable promotional potential. Why not try it?

Store manager Joe Cardamone is interviewed in DDI’s piece and identifies price, style and service as the hallmarks of the new JCPenney.  Although this was heralded as JCPenney coming to Manhattan, the video does a good job of capturing the Manhattan style elements that have been incorporated into the store environment.