Watching the Carts

While there’s no softening the blow of the troubled economy, retailers worked hard this year to keep shoppers returning to their stores.

New technologies helped.

Stop & Shop is rolling out hand-held devices so customers can scan and bag items at the same time. The scanners track spending and cut down on wait time in lines.

“The consumer is in charge right now,” says Mike Gatti, executive director of the Retail Advertising and Marketing Association.

Digital signage has moved to the forefront. Companies like Borders and Limited Too are entertaining and educating customers with the technology, offering everything from new products and specials to recipes and promotions. It’s a smart move, since nearly 30% of people wait until they are in the store to decide which brand they will buy, according to OgilvyAction’s recent global shopper study.

Another 10% of shoppers change their minds in the store and buy a different brand. And 20% will buy from categories they had no intention of buying from, OgilvyAction found.

Walmart is updating its satellite-based in-store TV network to the Walmart Smart Network, a new system powered by Internet protocol television. Advertisers can offer short clips and place the screens at eye level on end caps to better catch shoppers’ attention. The technology will be in place chain-wide by 2010.

P-O-P is also playing a bigger role. Marketers increased spending on P-O-P by 5.2% last year, to $20.3 billion, making it the largest consumer promotions category, according to the Veronis Suhler Stevenson Communications Industry Forecast.

“P-O-P is an essential part of the marketing mix,” says Dick Blatt, CEO of POPAI.

P-O-P was the biggest expense for 8.6% of marketers last year, according to Promo’s 2008 Marketer Trends Study.

Increased efforts — and dollars — are being put into understanding the shopper. The data produced is driving the strategic planning around everything from signage, store layout and packaging to promotion and product location.

“Retailers and manufacturers are looking for more meaningful insights that will help them decode and quantify the shoppers’ trip behavior,” says Ken Featherston, director of shopper marketing for OgilvyAction.

Some 73% of consumer packaged goods manufacturers and 86% of retailers ranked shopper marketing programs among the top-four activities that deliver meaningful ROI, according to a recent study by Deloitte Consulting LLP.

Companies that use shopper marketing typically generate $1 for every $1 they spend, Bonnie Carlson, president of the Promotion Marketing Association, says.

The PMA released its first comprehensive study on shopper marketing this year and found that 60% of retailer and manufacturer respondents practice it. And it seems to work. Two-thirds of retailers said they received sales increases and profitability improvements. Manufacturers also reported similar results.

Watch for continued work in the “green” arena. Sustainability remains a key buzz word in a time of higher material and energy costs, and firms are looking to product redesigns for better efficiency, RAMA’s Gatti says.

Costco and Walmart have redesigned their traditional gallon-size milk jugs to square-shaped containers that cost less to ship and are better for the environment. The change trickled down as savings for the consumer, some of whom complained about it, saying milk spills more easily from the jugs.

For 2009, expect a continued sluggish economy and, therefore, greater emphasis on marketing to consumers once they’re inside the store walls. The takeaway? “We’re going to have to be smarter with less,” Carlson says.