Tenser's Tirades

"Omni" What? It's Da BOMB

2012-01-30T11:21:00.000-07:00

IN MY MEANDERS around the vibrant NRF Expo hall (#NRF12) in New York this month, I tried my best to spot the visible stars of the show and detect the invisible three-degree background radiation that lurks behind the retail firmament.

The atmosphere was energized, the crowds were large and buzzwords were flying. Shopper insights swirled in the cloud, mobile technology hype charged the atmosphere, and business intelligence oozed out of every software booth into glowing puddles on the Javits Center exhibit floor.

Ultimately there was too much for one greying, recovering journalist to absorb. This is surely why I wound up at the bar in Manhattan's Landmark Tavern one evening with a group of senior retail business writers (a.k.a.,"ink-stained wretches") who gather each year to drink beer and tell lies.

The BSQ

We talked about how NRF has become primarily a retail operations exhibition, and how that had evolved to be primarily about software solutions. Egged on by my fellowship of professional cynics and emboldened by many lagers and stouts, we began evaluating the first day's bullshit quotient. The BSQ is a pretty simple ratio - buzzword repetition divided by genuine new ideas. (This is a party game only old journalists could love.)

The buzzwords were easy: "Insights" (every retail software solution promises better ones); "Analytics" (every retail software solutions promises faster ones); "Business Intelligence" (how every solution promises to deliver the insights and analytics); "Big Data" (what results from gathering so many insights and analytics); "Cloud" (the place in cyberspace where every vendor proposes to house its Big Data); "Dashboard" (a screen where retail practitioners are supposed to want to access their BI); and "Omni-Channel" (a state of retailing where online commerce coexists with mobile commerce and bricks & mortar, empowered by - you guessed it - insights, analytics, Big Data and BI).

As ever, the genuine new ideas were harder to detect. "Performance Management" may be a good one (the quaint notion that retailers might want to measure the outcomes of their insight-driven plans to see if they are really paying off). "Retail Industry Creates Jobs" is another, presented as a core theme by the NRF itself.

Readers familiar with basic arithmetic will quickly reason that for the umpteenth consecutive year, the BSQ on the exhibit floor was off the charts. The principle factor here is buzzword repetition, which drives the numerator toward infinity, while really genuine new ideas to pad the denominator are rare indeed.

Da BOMB
There is a lot to say about each of the major buzzwords and concepts that enlivened the NRF Expo. Right now let's focus a little on "omni-channel retail," which is recent nomenclature for an idea that has been around for quite a while. As far back as the dot-com boom in 1998 we began discussing the interplay between virtual and physical stores, catalogs, kiosks and call centers. By 2000 we identified several multi-channel players - like Eddie Bauer, and JCPenney - who had succeeded admirably (we thought then) in melding online, offline and catalog businesses to the benefit of shoppers.

The "shop anywhere, buy any where, return anywhere" principal was captured in the final edition of VStoreNews, where we labelled it "Broadband Merchant," re-purposing a popular adjective. By then much of the industry had adopted "multi-channel" as the nom de jour.

At NRF this month, alot of folks were calling this "Omni-Channel," I think because of the stunning influence of mobile technology within the mix. We can (and will!) argue long and hard about the appropriate understanding and application of mobile technology in retail, but for now let's just stipulate that mobile is colossal in its influence. Explosive even.

Which is why I'd like to humbly offer an "omni" alternative. Call it BOMB retailing - Blend Online, Mobile & Bricks into a single entity where every channel shares a common information platform and consistent shopper interface. One brand, one shopper relationship, one inventory, one set of service standards, many moving touchpoints.

Surely after 14 years on the interweb machine, the omni-present, omni-channel, but hardly omniscient retail industry is ready to blow up the status quo.

Why In-Store Implementation Is the Next Frontier

2011-09-06T10:17:00.001-07:00

I CALL IT the Paradox of Scale: Grocery chains keep getting bigger, but industry profit performance remains stagnant.

It’s been a doggedly persistent trend. Between 1992 and 2009, the top 20 U.S. grocery retailers increased their cumulative market share from 39% to 64%, according to the U.S. Economic Research Service. Meanwhile from 1996 to 2010, industry net profits have hovered consistently around 1% of sales, according to the Food Marketing Institute.

These facts seem to run counter to intuition. After all, bigger chains are supposed to have top-of-the-line executive talent, fine-tuned supply chains, advanced IT systems, greater buying clout and economies of scale. A deeper look reveals the paradox: Bigger chains also suffer from intensified store operational complexity, larger assortments and poorer visibility from the home office.

Bottom line – as chains expand, store performance management gets much, much harder. This begins to explain why out-of-stocks continue to run at 8.2%, unchanged in 15 years, yet 78% of items sell fewer than 3 units per week. It begins to explain why as many as half of all authorized in-store display promotions are never erected or erected late. It begins to explain why most retailers have no effective process in place to ensure or even monitor everyday planogram compliance.

A Rich Prize

Where some may find darkness and frustration in these statistics, others identify a golden opportunity. The In-Store Implementation Sharegroup identified tens of billions of dollars at stake – a rich prize indeed. Bold retailers and marketers who commit to improve retail compliance practices in the next few years should gain a distinct performance advantage over their less nimble competitors.

In-Store Implementation is not an isolated solution; it’s a multi-threaded initiative that incorporates improved in-store sensing and measurement; better inputs into planning processes; a performance-oriented culture; and alignment of trading partner resources. Many of the enabling practices and tools already exist, ad hoc. Still needed is an organizing principle that can tie them together into an effective set of best practices for the industry.

Workshop at LEAD

In just two weeks, a select group of industry thought leaders will come together to explore how to make this ambitious agenda a beneficial reality. They will be participating in a pre-conference workshop at the LEAD Marketing Conference in Rosemont, IL, on Sept. 19.

The workshop is presented by the In-Store Implementation Network, a membership organization with an educational mission centered on advancing awareness and knowledge of ISI practices. The group boasts more than 1,400 practitioner members in 28 countries who share a common goal – the establishment of a culture of performance at retail that makes stores work better, shoppers more successful and businesses more profitable.

Thanks to the generous sponsorship support of our friends at Gladson, ISI Network has assembled an all-star faculty to address key facets of the opportunity. The workshop format is intended to ensure that participants will leave the half-day event with a fresh perspective and practical ideas that may be applied immediately to their own ISI business challenges. As Executive Director of the ISI Network, I will be the lead facilitator of this workshop.

A few seats remain available; admission is complimentary to retail and CPG practitioners. I look forward to greeting many of you in Rosemont!

To register for the LEAD Marketing Conference, click here.

For a detailed agenda about the ISI Pre-Conference Workshop, click here.

A Web of Truths

2011-07-27T16:13:00.005-07:00

WATCH OUT, Shopper Marketers! You may find yourselves entangled in a web of truths of your own making.

It all began innocently enough; in 2005 when brand marketing behemoth Procter & Gamble advanced a provocative set of ideas around what it called the first and second moments of truth. Thanks to some savvy and persistent promotion, the terminology caught on fast:

FMOT, the first moment, refers to the brief period when a shopper selects a desired product in the store.
SMOT, the second moment, refers to the at-home consumption experience associated with that product.

Within the then-nascent Shopper Marketing community, this framework was a minor revelation. For brand marketers, FMOT gave credence to the argument that real marketing persuasion needed to be extended from measured media into the shopping environment. The store, it was discovered, shelters a separate marketing reality, where pre-purchase leanings are transformed into final choices.

Shopper Marketing defined a path to purchase that commences with media-induced product awareness and proceeds to interest, formation of intent, and ends with product selection at the shelf, FMOT. Once home, SMOT, or the actual product experience, takes place influencing subsequent decisions.

FMOT/SMOT was a pretty handy framework at first. But the concurrent rise of digital out of home and mobile media conspired to make things a lot more complicated, fast. The path to purchase, it turns out, is littered with hundreds of moments - text messages, in-store video ads, Web search, service encounters, Facebook apps, twitter feeds, QR codes and downloadable coupons, to name a few.

Stuck in the Moments

A few weeks ago the gleefully disruptive folks at Google seized the opportunity to coin a new Moment of Truth and promote it hard. They call it Zero Moment of Truth or ZMOT. Its premise is that interactions with search, Web, social and mobile price and product research media create a third type of online decision-making moment. The concept is a bit self-serving coming from the world's largest seller of online advertising, but it has attracted much commentary and attention.

Almost immediately, new Moments starting appearing like so many pop-up windows on an e-commerce Web site.

In his post, "What is missing from moments of truth marketing", blogger Joel Rubinson argues for the existence of "minus one" moments of truth that include such influences as word of mouth, in-store product visibility, and various types of advertising. Most interestingly, he proposes that these -1MOTs may occur in any sequence relative to FMOT and SMOT.

Joel's point about the non-linear nature of the Moments of Truth is worthy of frequent repetition. Product experience is certainly a web of moments, not a fixed linear sequence. Call it WOT (Web of Truths)?

On the very same day and from an independent thought process, blogger David Berkowitz proposed adding "The Infinite Moment of Truth" to the model, which reflects his excellent observation that consumers may well describe their product and service experiences to others, relaying and amplifying the message beyond the scope and control of the marketer.

Bon MOTs

I applaud David for extending this Shopper Marketing discussion from the path-to-purchase toward the path-to-loyalty. A good thing, really, since the linkages are powerful and real. It made me think about Fred Reicheld's 2006 book, The Ultimate Question, which proposed that genuine loyalty was best judged by an individual's likelihood to recommend a product or service to others. Social media can super-charge this potential.

Both bloggers are smart, experienced people I know for some years and their ideas are intelligent and worthy of respect. But I must confess to an impish reaction that led me to ponder: Just how many bon MOTs can one industry handle? ZMOT; FMOT; SMOT; Rubinson's -1MOT; Berkowitz’s IMOT…

At risk of attracting ridicule, my imp compels me to toss another acronym into the mix: XMOT, the eXtended Moment of Truth. It's my way of stretching the Web of Truths a bit wider - not quite to infinity, but toward its potential to help us understand the multifaceted tangle of influences each person receives, reflects and responds to in their roles as shoppers, consumers, and friends.

Pay Cycles: When Month Outlasts Money

2011-07-21T13:40:00.004-07:00

I WAS STRUCK to read comments a couple of months ago by Walmart CEO Mike Duke who stated that the chain's shoppers seemed lately to be running out of money in the waning days of the month. He cited the shrinking size of market baskets as evidence. Tough times leading to tough choices.

Separate recent reports about the worrisome state of our consumer economy observe that budget-conscious shoppers tend lately to purchase smaller package sizes near the end of their pay. This, of course, is a key contributing factor to smaller baskets. William Simon, Walmart U.S. stores chief, made reference to this "paycheck cycle" at a recent analyst meeting.

This morning a report in Bloomberg News described shoppers upping their use of credit cards for purchase of household necessities and gasoline. This is a confounding signal that looks on the surface like a rebound in consumer confidence. In fact, it seems to be concentrated at the end of the calendar month. This may be a sobering sign that many households' flat and declining paychecks can't keep pace with price increases.

I'll leave the economic and social import of this behavioral trend to the true experts. But I would like to offer a few thoughts about the time-based shopper insights that allow analysts to detect and measure the trend. Looking at detailed market basket trends day by day, it seems, can reveal a great deal about short-term household economics.

Not Card-Sharp? Then Be a Basket Case
This is interesting because we hear a different tune about insights from the many advocates of frequent shopper programs, a.k.a., loyalty cards. The detailed segmentation data these programs can deliver offer a wealth of target marketing opportunities for retailers and their suppliers, along with behavioral insights so detailed and profound that we don't always know how to apply them in practice.

This is very cool stuff and it is credited with upping sales and profits at some pretty sharp retailers, like Kroger. Card-linked data allows marketers to put together a picture of a whole customer relationship over time, evaluate it, and group customers into target-able groups. Walmart and the so-called "dollar" stores, however, do not go in for those card marketing schemes. They stick deliberately to their EDLP guns instead, and resign themselves to data-poverty.

Or so it may seem. Actually, there is a great deal that may be learned just by looking at basket trends, especially at those retailers who enjoy very large footprints and shopper penetration. Card-free chains like Walmart, Publix and Dollar General can track the transaction logs by day and by local geography to extract very meaningful insights. Even if the shoppers are not individually identified, their collective behavior reveals much about pay cycle trends on a store-by-store basis.

Here is where even "data impoverished" retailers can find basis for some global and targeted merchandising tactics. Carrying sufficient smaller pack sizes in key categories every day is one obvious response Walmart says it has pursued. Sales and events may be scheduled to coincide with payday for local large employers. Managers' specials may be timed to hit key mid-month and end-of-month dates.

Well there you have it. It's still a share-of-wallet game, even when wallets are growing slimmer. Walmart knows, there's much of tactical value embedded within store transaction-logs, even where there's no loyalty data in sight. It's not just dollar size of baskets that may influence action, it's also item counts, categories included/avoided, package sizes and purchase influences from outside factors.

When the month runs long, wise retailers jump on their cycles.

The Epsilon Imperative

2011-04-07T08:38:00.007-07:00

CMOs: Is your brand in the crosshairs?

IN WHAT SOME observers say was the largest breach of consumer data in history, this week servers at Epsilon Interactive, a database services company based in Irving, TX, were compromised by hackers, exposing the names and email addresses of millions of American consumers to the spam-o-sphere.

Within hours, alerts hit my personal inbox from Kroger, Target, Walgreen and HiltonHHonors informing me that they had been struck and that one of my addresses was now in the wild. Why did these gigantic companies have my email address stored in Epsilon servers? Simple. I am enrolled in their frequent shopper programs. And until now, Epsilon was as reputable and secure a place as you could get to host your customer data.

Which partly explains why the 50 or so huge retail and consumer-facing companies whose customer email lists were exposed by this attack include the likes of Best Buy, HSN, CapitalOne, Citigroup, JPMorgan Chase, Marriott and TiVo. These companies depend on email communications for the inexpensive delivery of relevant messaging and offers to their customers. Now each of them has been forced to warn their customers about the potential for spam and phishing attacks. By email.

The implications of this are quite chilling, and should give pause to every Chief Marketing Officer and Chief Customer Officer charged with the custody of shopper relationships and brand equity. Shareholders had better pay attention too. This, my friends, is your first early warning. I call it the Epsilon Imperative.

First, the good news
It could have been worse. While the data quantities are vast, and the affected brands are iconic, at least the damage was limited to names and email addresses, we are told. Wholesale identity theft does not appear to be a great direct risk, although enterprising list dealers and data miners will be tempted to merge the email address tables with other lists, thus creating more complete profiles for future exploitation.

And the email notices I received came fairly promptly. Well, one from McKinsey Quarterly arrived within hours of the media alert on Saturday. Walgreen and Fry's (Kroger) got their notices to us later the same day. Hilton and Target waited until after the weekend. (OK, timings of the last two are really not that impressive, come to think of it.)

The positive take-away is that most of the frequent shopper/guest list owners exhibited some consciousness of responsibility for the incident, even though it was caused by an outside criminal act against a third-party service bureau (Epsilon). They acted promptly, recognizing that shoppers and guests must be made to feel that the brands have their best interests at heart. Failure to inform would be a lapse of good faith.

Why marketers should care
While preserving public confidence and brand equity are major concerns, this is only one factor for top retail and hospitality executives. Another, less-understood implication is legal regulatory exposure. This is an area that evolved rapidly following the notorious TJX data breech of 2005, which exposed 46 million credit card numbers but did not come to light until 2007.

California led the pack with the first security breech notification legislation in 2008. But the model for this legislation came not surprisingly in the state of Massachusetts, where TJX is headquartered. At least 46 other states followed with their own versions.

The Massachusetts General Law titled, “Standards for Protection of Personal Information of Residents of the Commonwealth” (Chapter 93H), defines a comprehensive set of data security obligations on businesses, including the development and maintenance of a “comprehensive written information security program.” Deadline for compliance with this law was Mar. 1, 2010.

Several legal scholars have observed that the Massachusetts law would apply to every company who has even one list member residing within the state. It also sets the best practice standard for written information security programs. Since modern ecommerce is “borderless,” many companies will be subject to such oversight in every state.

This means that any company with a direct marketing or frequent shopper list that fails to prepare and maintain a private data response plan may be exposed to dozens of lawsuits imposed by state attorneys general. Legal fees and fines can spiral out of hand, and the secondary damage to brand reputation may be multiplied along with it. It seems that loyalty programs just got harder to operate.

Protect your shoppers – and your brand
What can a responsible marketing executive do to protect customers and company from the cascade of negative consequences that may result from the inevitable data breech? Maintaining state-of-the-art data security measures and the comprehensive written information security program are certainly essential. CIOs worldwide work feverishly at data security, but it’s up to the CMO and CCO to protect brand and customer equity by ensuring that sound response plans and practices are put into place.

A great many consumer-facing businesses consider loyalty and relevance-based marketing to be essential competitive activities. Shoppers and consumers have come to expect the personalized services and rewards promised by these programs. Firms depend on their customer databases to deliver crucial insights that enable efficient and well-targeted marketing programs.

In light of the Epsilon event however, retail and hospitality CMOs and CCOs now face a new imperative. They must confront new questions like:

How is the consumer’s perception of our brand affected now that their information has been violated?
Is the value of our brand and customer equity negatively affected by a data breech? How bad is the damage?
Are we prepared to demonstrate our diligence to our customers and card holders by mobilizing rapid notification and protective actions?
What compensation can we provide to the consumer for their discomfort, angst, worry?
Can our forthright response turn a data breech into a service recovery opportunity so that we gain trust, not lose it?

In today's world, the relevant question regarding data breeches is not "If?" but "When?" Set against the emerging legal backdrop of state and foreign regulations, this means loyalty and direct marketers must maintain a dynamic preparedness and response plan that can be instantly triggered in the event of a negative event. This is a capability few companies have today, but one that all should acquire.

Social Media? - Nah, It's Personal

2011-01-25T15:42:00.008-07:00

New way to a shopper's heart?

ALL THE RECENT chatter about "social media for business" is driving me around the bend.

For some time now, I've been searching for a terminology that would rescue us from imprecision and allow a meaningful business conversation to take place around the impact of smart phones within the retail environment.

At the National Retail Federation Conference and Expo two weeks ago in New York, the presentations and pitches frequently turned to the impact of social and mobile media, and I kept cringing every time I heard it. Here's why it bugs me so much:

When new business phenomena have arisen in retail marketing, sloppy terminology frequently led to poor initial understanding of the business opportunity. Often it is due to a choice of words laden with confusing prior connotation – or the absence of a suitable term.

We sometimes used "consumer" and "shopper" interchangeably; now we distinguish between those two customer roles. We spoke of "manufacturers" or "vendors" before the term "brand marketer" was introduced in the mid-90s. A deficient thought vocabulary renders some concepts virtually unthinkable.

In Your Facebook
Today, most of the marketers and solution vendors obsessed with "social media" are in fact formulating new ways of delivering one-on-one messages to targeted shoppers and attempting to influence what they do and say on social networking sites. It's undeniable that one particular application – Facebook – happens to be used heavily for social play and sharing of consumer lore. Marketers are dazzled by the massive "audience" it has accumulated and are salivating to exploit the opportunity. How fortunate for Facebook investors.

But setting up corporate pages on Facebook or Twitter does not a strategy make. Indeed the existence of these pages implies a broadcast mentality – from us to them. Despite the open visibility of customer comments on the wall, there seems to be relatively little interaction between consumers on these pages. Old comments get quickly buried behind newer ones, and only our social media hired guns bother to track and analyze them - in reports calculated to justify their existence.

Regardless of the channel, shopping is primarily about each individual's personal success – get the best deals; satisfy my needs most efficiently; manage my budget; impress my friends; etc. When a shopper turns to his or her personal mobile device to access tools to enhance in-store success, it's a very personal action motivated by very understandable self-interest.

Getting Personal
I submit that when it comes to tapping shoppers via those pocket two-way radiowave computers we call smartphones, there's very little "social" about it. It's not social - it's personal.

If we conceive of the mobile device as a personalized channel for interaction between retailers or brands with individual shoppers or consumers, then we would do well to set aside the imprecise term "social media" and start talking shop. These new media are personal media. Much of what happens on them may be social in nature, but everything that happens on them is personal.

The personal mobile device is taking shape as a personal nexus, where online, in-store, social, and commercial communications converge in unique combinations tailored by and for each individual. Each of us shifts roles at will, according to our objectives of the moment - searcher, receiver, reporter, sender, aggregator, re-transmitter, gatekeeper, purchaser, advisor.

Businesses that hope to play effectively in this incredibly fluid and fast-changing media environment had best get their minds around the personal nature of the shopper experience using mobile devices. When we discuss our strategy for personal media, the marketing mindset shifts in what I think is a constructive direction. Better decisions and practices must surely follow.

As for me, I have nothing against online friendships; but when it comes to business you may count me as anti-social. My reasons? Well, they're personal.

What Constitutes Compliance?

2010-11-03T10:04:00.005-07:00

Is this shelf set correct?

IN MY ROLE as Director of the In-Store Implementation Network, the challenge of merchandising compliance is frequently addressed, from a variety of perspectives - both theoretical and solution-oriented.

Several recent conversations have centered on the question of measuring the accuracy of a shelf set; that is, its degree of compliance with the schematic or planogram. This is actually a non-trivial matter when seeking a practical solution. Since a planogram is a complex tool covering many details (items, facings, positioning, quantities, etc.) determining what data to measure, how often and to what end(s) requires a thoughtful process.

Our valued colleague Mike Spindler, CEO of ShelfSnap has championed this discussion in several items posted on the ISI Network LinkedIn Group page. He is one of the better thinkers we have on this topic, and his company offers a promising tool for digitally comparing an image of an actual shelf set with its associated planogram.

How Close is Close Enough?
If the comparison is "perfect" - that is, all item are present in their proper locations and quantities - we can safely declare that a shelf set is compliant with the plan. This is, however, a rare occurrence which probably exists only for a few minutes after the re-set work is correctly completed. The moment shoppers get to removing items into their baskets, perfect compliance begins to deteriorate. Darn those pesky shoppers!

As I like to say, the "half-life" of a typical shelf set is less time than it takes the re-set crew to leave the building. A slight exaggeration, maybe, but you get the point.

So when do retailers declare a merchandise set to be "out of compliance"? When 9% of items are out of stock (the industry average in grocery)? When 15% of items are present but mis-located? When the number of facings is off on more than 25% of items? Alternatively, what criteria define "in compliance"? All items present and accounted for? 90% of items in the correct place? 99% in-stock? How close is close enough?

Evidently, the ways a planogram can go wrong are numerous but not always numerical. More significantly, they are not easily recognized by human inspection. That is, compliance issues can be hard to spot without a scorecard in hand - and even then it takes concentration and focus and time.

Compliance Shorthand

What if we could define a short-hand method instead - perhaps three to six yes/no metrics that could be taken as a proxy for overall compliance? ISI Network member Larry Dorr, a respected expert on retail merchandising and founder of Jaguar Retail Consulting, described an approach that is worthy of discussion.

He proposes measuring the condition of approximately five or six "destination" items for each category or major subcategory. These are often the highest-velocity items in their respective sections. "Measure the items adjacent to those items," he says. "If those five and their adjacencies are in correct shape, then the set is probably in good shape overall. If two of the five items are off, you may assume a compliance problem."

This approach offers economy, speed and ease of implementation. A limitation, he concedes, it that this doesn't provide a measure of item distribution. While the five-item rule may deliver a directionally correct conclusion about planogram compliance, it may not help very much with gauging the performance of non-destination items.

Also worth noting is how the criteria for compliance may vary across different product categories and classes of trade. Our example above is drawn from a grocery/mass perspective. In specialty apparel and department stores, where color, size and style factor in, the definition and metrics for compliance will differ. Consumer electronics retailers will face their own compliance issues.

Storecard Metrics Needed

So let's grant that merchandising compliance is a slippery quantity using presently available methods. That doesn't absolve practitioners from the requirement that they track and measure merchandising performance. In fact innovation in Shopper Marketing, segmentation and automated planograms only intensify the need.

We need creative thinking and some consensus on what constitutes compliance success; on what to measure, how and how often. The goal is to define some compliance best practices and incorporate the metrics into in-store scorecards - what I like to call storecards - that support and enable those practices.

Which leads me to offer this challenge: Use the comment form on this post or on the ISI LinkedIn Group to help us define: What constitutes merchandising compliance? How do you/should we measure it? What are the thresholds? How good is good? What's the cost of good?

This could be the first step along the road to In-Store Implementation Best Practices. I look forward to reading your thoughts.

Tenser to Lead NARMS Webinar: "Whose Store Is It, Anyway?"

2010-10-20T15:29:00.007-07:00

THE DIRECTOR of the In-Store Implementation Network, James Tenser will pose this provocative question in a 60-minute Webinar hosted by NARMS, the National Association for Retail Merchandising Services.

The Webinar will take place at 1:00 PM Central on Thursday Oct. 28. Review the program here.

Currently some larger Merchandising Services Organizations and Sales/Marketing Agencies are offering proprietary Store Execution Management software to retailers as a value-add. The implications are complex, and they have potential to affect core business practices, including the establishment of what might be called "merchandising captains."

Should retailers accept "free" SEM software provided by their MSOs and SMAs? Who gains? Who loses? Who should own the data? What other implications of this practice need to be examined for the best interest of our industry? Tenser will explore these issues and answer questions in a lively online program.

(Special Offer: NARMS normally charges guests $99.95 to attend its webinars, but has generously extended a discount price of $29.95 for ISI Network Members. To register, phone the NARMS office at 888-526-2767 and tell them you're one of us.)

Tenser to Lead "In-Store Marketing ROI" Workshops In Jakarta and Singapore

2010-06-12T13:06:00.009-07:00

THANKS TO MY new friends at Strategic Vision Group, Singapore, I'm proud to report a commitment by by my firm VSN Strategies to present two professional workshops in August on the topic of "In-Store Marketing ROI".

Intended for experienced retailing and brand marketing practitioners, the workshops will include subject matter covering practical performance and success metrics for: Shopper Marketing; In-Store Promotion; Merchandising Performance; Frequent Shopper Programs; Shopper Media; and In-Store Implementation. Attendance is open to professionals from throughout the region and the sessions will be conducted in English.

This workshop delivers practical tools for isolating the effects of in-store marketing programs and measuring their impact on brand, category and store performance.The curriculum will include case study presentations, in-class collaborative exercises and group discussion, in a highly interactive format.

Presented for the first time anywhere, the workshops will guide participants through the development of Storecards™ for merchandising performance - an application of the "balanced scorecard" technique to in-store implementation and compliance activities.

Seats are limited due to the interactive format, so interested candidates are encouraged to contact the organizers soon to obtain the workshop brochure and reserve a place. I look forward to meeting you there!

The "Retail Problem" in Public Education

2010-03-25T15:50:00.004-07:00

I RARELY VENTURE outside my core expertise in this blog for (justifiable!) fear of embarrassing myself and those close to me. But I've been watching an important societal trend from the sidelines with increasing concern. The topic is public education policy, and the lens through which I view it is the local school system here in Tucson, AZ.

Like I said - that's a topic that would normally be out of my league. Better left to the experts. Or so I believed, until in a recent flash of insight I realized that our public schools have a retail problem.

Now there's a subject area I know something about. Maybe in the next few paragraphs I can make a useful contribution to the national dialog on a very troubling issue. I doubt I could make things worse.

Education's retail problem, in a nutshell, is what we in the stack-it-high-watch-it-fly business of selling stuff call over-storing. Over-storing occurs when retailers build too many buildings to offer goods to a finite number of shoppers. When the ratio of selling space to available dollars gets too high, all the stores suffer for a while, and eventually some go out of business until balance is restored.

This is easy to understand in terms of macroeconomics 101: Too many goods chasing too few dollars results in a lowering of demand.

Today we have a parallel situation in the world of public education due in part to national and local education policy, part due to the current economy, and part due to enduring human nature. The problem is especially acute this year here in Tucson, where there are too many classrooms chasing too few students, resulting in a lowering of demand. In fact, I'd nominate this city's Tucson Unified School District (TUSD) as the nation's poster child for over-schooling.

TUSD is presently battered by a perfect storm of negative trends, beginning with historically low funding per student (49th of the 50 states) and exacerbated by recent cuts due to the generally poor local economy. Teacher salaries are an embarrassment. There's little money for textbooks or paper. Non-core subjects like music, art and P.E. have been largely eliminated. The Federal "No Child Gets Ahead" mandate has required further costly focus on teach-to-the-test classroom tactics.

Adding to this storm is Arizona's status as the national hotbed of so-called "charter schools," those privately operated institutions that operate by re-purposing per child state funds. These are often heaped with praise in Washington based on a persistent (but largely baseless) belief that charter schools introduce healthy competition to the educational system that will ultimately raise public school standards and benefit our children.

If there is one thing that TUSD has in profusion today, it is classrooms. The district operates more than 100 elementary, middle and high schools, plus several alternative schools, serving about 55,800 students, for an average of 558 students per building. That average is declining, as more students depart the district each year to attend local charter schools.

The result is some devastating math. Fewer students per school means declining revenues. but the same number of buildings to operate with fixed costs translates into a decline in net spending per student and a loss of classroom and non-classroom jobs.

This is a contributing factor in the elimination of non-core teachers and courses. Naturally, core classes must be preserved to meet state and federal standards. When teaching jobs are cut further, class size must increase, even if classrooms stand empty.

Another wrinkle has to do with exactly which families are shifting their students out of the public schools and into charter schools or other alternatives. Teachers I know observe that the parents who make this decision tend to be more involved with their children's education and more likely to set high standards for their children. While the evidence is anecdotal, if true this amounts to a flight of the better and brighter away from the public schools. The unintended but devastating consequence of their departure is a lowering of average standardized test scores, evidence which is used to rate and reward schools and teachers.

This impact is demoralizing for teachers and alarming for parents, who respond by transferring more of their children into charter schools each term. But the district's costs for owning and operating the buildings remain the same; more teacher jobs are lost each year; and the net spending per student continues to creep downward.

One obvious solution for an embattled district like TUSD, that would partially relieve the pressure on operating costs, would be to close some of its superfluous schools and consolidate the children into those that remain. In fact, closure of several smaller elementary schools has been proposed each of the past several years. Vocal local parent groups, who moved into those neighborhoods to be near these schools, successfully quashed these decisions.

Very recently we have heard news from the district of several proposed (and at least one actual) school mergers - whereby two half-empty elementary schools are combined into one with the superfluous building shuttered. In the one announced instance so far, the parents of both schools voted in favor of the change. This is a bit like closing down one of several chain stores when the demographics shift - some business may be lost, but on the whole, the remaining units are more profitable.

So maybe TUSD got that part of the lesson. Lower costs begin with fewer buildings. Unfortunately, with state funding dropping even faster, this instance of economic realism will not be sufficient to forestall even more draconian cuts. How sad for our young people and the dedicated teachers who until recently believed they could make a difference in their lives.

The New Voxology

2010-01-20T11:00:00.019-07:00

IS "SOCIAL MEDIA FOR BUSINESS" an oxymoron?

One current LinkedIn Groups discussion loudly and repetitively (2,500 posts and counting!) declares it "CRAP." I think this oversimplifies what has become a marketing imperative, and clouds a very important opportunity.

As new marketing verbs like tweet, blog, and social networking permeate our thinking, we need to acquire a clarifying thought vocabulary that will allow us to grapple with emerging concepts and put the tools to appropriate and beneficial use. I'll take a first whack at it here. Perhaps some wise readers can build on these ideas.

For starters, it would be helpful to differentiate between the kinds of activities that take place within online social media constructs. I group them into four familiar quadrants: C to C, B to C, C to B, and B to B.

"Consumer to Consumer" social media are probably the highest profile, as they are manifest on hundreds of millions of Facebook, MySpace, Twitter and YouTube uploads. The purpose here is primarily social and personal, and there's certainly nothing wrong with that. If much of the content posted on virtual "walls" is silly, trivial and self-indulgent, so be it. It is also highly dynamic, interactive, and in its way, democratic. The sheer size of the community is proof of the concept's power and cultural influence.

Businesses and political groups view the huge C to C audiences as a potential gold mine, and so there has emerged a concerted effort by marketers to deliver controlled messages within the social media platforms. I'd label activities like this "Business to Consumer." Recent elections showcased this potential, as candidates used online groups, and "fan" pages to garner support, raise funds, and motivate voters. Brand marketers are also in hot pursuit of the social media audience, but they should be cautioned that quaint broadcasting norms may not apply here. Leading practitioners are working out ways to accumulate followers who are receptive to targeted messages and offers and whose responses may also be sources of useful insights.

Which leads us naturally to consider the arrow's reversal: "Consumer to Business" social networking may be a source of valuable feedback from both supporters and critics. Ardent fan and cruel pan pages can spring up spontaneously - sometimes to the dismay of the brand, retailer or celebrity covered. The object of such public scrutiny typically has little control over its content, much less its veracity. This is a cold fact of life that marketers must simply learn to live with. Wise brands monitor these for insights and to counter libelous talk, but they respond with a light touch, so as not to elevate a lone crackpot into fodder for the salivating media.

Of course, brands, celebrities and pols also take deliberate action to invite communications from loyal and not-so-loyal constituents - setting up their blogs, Twitter feeds, email lists and fan pages to anchor the message and gather feedback. Perhaps B to C and C to B social media activities are inseparable, two sides of a coin.

B2BSM - A Different Animal?

Finally we have the distinct instance of Business to Business social media. This is my real interest in this discussion, actually, because it applies the tools and methods of social media to serious business purposes. LinkedIn is a very good example of a public platform that is used for career networking, personal branding, formation of subject matter communities ("groups") and sharing current events and ideas. There is also some fairly sound (if experimental) use of Twitter by trade journalists and industry observers (search the #NRF10 hashtag on twitter.com to view interesting and extensive coverage of last week's NRF Expo in New York, for example).

Another B2BSM realm is emerging around secure-access portals that incorporate social media-like tools. These are used for creating flexible online workgroups, sharing documents and information, even hosting internal and inter-organizational collaboration like Merchandising Performance Management among retailers and manufacturers. The platforms use some familiar functionality, but quickly go deeper to deliver performance dashboards, "fingertip analytics" and other advanced capabilities designed for decision-making experts who are not IT experts.

Some businesses are also using a combination of Web-based and social media applications and tools to manage their visibility, presence, and image with respect to their business community. The portfolio of tools may include any or all of the following: The firm Web site; blog; an email and list management service; a LinkedIn group; a Facebook company page; one or more Twitter or other microblog feeds; an online market research site like Survey Monkey; an online press release distribution tool like PRWeb, and more.

At VSN Strategies, we like to call coordinating this set of activities "management of the commercial online voice" or voxology for short.

Voxology in Practice

VSN WebVox™ is my firm's name for this business service. We help clients combine multiple Web-based tools and services to create, maintain and propagate a commercial "online voice."

We craft thematic consistency and interlink the elements to create a high level of Web activity that helps companies score high on search engines and expand their reputation. The result is an evolving Web presence – a combination of visibility and credibility, across the multiple linked channels of the Internet. Companies become more search-able, more find-able, more believed, more in contact, more heard.

At VSN we're in the camp that firmly believes social media for business is definitely not "CRAP." Furthermore we maintain that mastery of its subtleties is an essential pursuit for both B to C and B to B marketers. We'd like to see some improved vocabulary emerge to differentiate the activities that take place between individual consumers, businesses and consumers, and businesses with other businesses.

For B to B, I propose "voxology," the new science of the online voice.

Tenser Presents Webinar on MPM

2009-12-15T09:00:00.006-07:00

NARMS Webinar Merchandising Performance Management

IMPLEMENTATION means to carry out; to give practical effect to and ensure of actual fulfillment by concrete measures. In this NARMS Webinar, James Tenser takes a look at new considerations in the ever important issue of implementing marketing plans at retail. The hour-long session is another event in the NARMS-U educational platform titled - What is Merchandising Performance Management? The webinar, sponsored by Natural Insight, will take place Thursday, December 17, 2009 at 1:00 P.M. CST and is brought to you through the technology of ReadyTalk.

"Plan Through Impact": Dialog with Dawson

2009-08-14T09:02:00.007-07:00

Tenser's Tirades recently sat down with Warren Dawson, President of consultancy Dawson Thoughtware, for a conversation about his vision for a comprehensive framework for what he calls Merchandising Resource Management, designed to support superior store-level compliance and effective measurement methods, from initial plans to their ultimate impact on business. The MRM process allows retailers and suppliers to set objectives, measure performance at each process stage, and gauge the impact these have on the overall business.

Dawson was instrumental in organizing the In-Store Implementation Sharegroup and a contributor to its 2008 working paper. He is preparing a new paper, "Plan Through Impact," that outlines his point of view regarding the next wave of innovation in supermarket store operations, one he believes opens up great opportunities to improve both shopper experience and financial performance.

TT: Warren, you've earned a long-standing reputation as one of the visionaries in supermarket merchandising, especially space and assortment management. What's driving you to speak out again about merchandising compliance?

WD: It's no secret that I've been an advocate along these lines for many years. I started working on the core issues of store-level item distribution in the 1980s. I've had the opportunity to help many supermarket and CPG companies tackle space and assortment issues since then. The idea behind the ISI group was to bring together a credible group of companies and industry people to debunk the myth that all is well with In-Store Implementation.

While we've seen improvement in supply chain methods, category planning and demand-based insights, the in-store opportunity remains vast - tens of billions of dollars in missed sales, billions in profits. As the ISI Sharegroup working paper showed in 2008, we have barely budged in 20 years on core issues like item availability, promotion compliance, speed to shelf and planogram integrity. I think we have the means to fix those things today.

TT: What do you mean by "Plan Through Impact"?

WD: Well, besides persistent irritants like out-of-stocks and poor promotion compliance, two areas of change in merchandising planning in the grocery industry have brought this need to a higher urgency: The first is Shopper Marketing, which has led to a much greater degree of segmentation and targeting around in-store merchandising and messaging. The second is the adoption of planogram automation tools, which permit retailers to vary merchandising plans down to the store level, if justified by shopper insights.

TT: Those sound like positive developments. Are you skeptical about their value?

WD: Not at all. It's great, must-do stuff. The challenge is that they introduce an enormous amount of additional intricacy that the industry is not well-prepared to manage. Retailers and CPGs are getting a lot better at formulating subtle and insightful plans, but they lack the know-how and every-day practices to carry those plans out effectively in the stores. There's a huge risk of wasted spending.

TT: Isn't that what Workforce Management and Store Execution Management software is supposed to address?

WD: Yes in theory. And these types of tools are likely to be parts of the Merchandising Resource Management solution I envision. They let us formulate a compliance plan and push it out to people in the field. But organizing and communicating tasks is just the first step in the process. There has to be a process for confirming that the tasks get done, measuring them and comparing them to expectation. And you have to be able to share the results to all participants in the process, so they can manage their own performance.

TT: Sounds a lot like the "Plan-Do-Measure" concept advanced by the ISI Network.

WD: Exactly right, although MRM goes further. You need an embedded feedback loop to monitor compliance. Regularity in the information will ultimately help trading partners make better, more realistic merchandising and promotion plans. It's foolish and costly to plan work that doesn't get done, and yet that's what we do every day, because without measurement tools we can't visualize how our unrealistic plans damage our business outcomes.

TT: So how does "Plan Through Impact" extend this thought process?

WD: By adding three more levels of measurement. Its core is what I call a Compliance Index that synthesizes several store-level metrics into a score that can be rolled up from the item level all the way to the category, cluster or account level. Then compliance must be linked to what we all care about - sales performance results. Finally, we need to connect the dots to measures of business impact - customer experience and loyalty, competitive position, and shareholder value. I sometimes like to call this "Plan-Do-Measure-Measure-Measure-Measure."

TT: Are you suggesting that we establish a chain of causality connecting a company's shareholder value all the way back to its merchandising competency?

WD: I believe it's an achievable goal. Merely tracking merchandising outcomes doesn't provide a reliable proxy for business performance. We feel intuitively that compliance must have an impact, but we can't use it to support strategic decisions unless we establish a Plan Through Impact framework.

TT: Sounds challenging. Aren't you asking for too much?

WD: At one time this might have seemed beyond us, or at least prohibitively costly, but today we have all the elements within our grasp. There's no shortage of tools to support store level measurement and communications. In fact, many merchandising field organizations are already heavily invested in portable technology with verifiable self-reporting that would support a viable compliance index. Then there are the point solutions for digital image analysis, out-of-stock detection, spot audits, and demand signal analysis to name a few.

TT: If those software and hardware tools are already available, why isn't the industry already enjoying greater success?

WD: Because they are being put into use ad hoc, and in the absence of a crucial thoughtware layer. Merchandising Resource Management is a business process, not a technology. It requires some changes in business practices at the store level, as well as for decision-makers and administrators. Also, because it creates greater transparency of compliance performance, it has potential to change the way trading partners collaborate for success. Most companies are going to need a little help putting this into practice.

TT: How can companies educate themselves further about this?

WD: Interested parties are welcome to email me at WarrenDawson@gmail.com for a copy of the paper or to discuss a consultation. A good place to begin reading is the In-Store Implementation Network site. Many downloads are available with free registration.

Curing Performance Anxiety

2009-07-06T17:32:00.005-07:00

Sure, you can plan alright, but how well can you implement?

I imagine this question keeps truly conscious merchants and consumer product marketers awake nights with what amounts to performance anxiety.

Those of you who follow the work of the In-Store Implementation Network may be well aware that members regard the pursuit of retail compliance as nothing less than an industry imperative. Our latest work on Merchandising Performance Management drives the point further. Our not-so-hidden agenda: Shift the dialog from hand-wringing about our challenges to identifying and implementing practical solutions.

You see, we are standing at the threshold of the next (maybe the last) great opportunity for retail financial performance gains - the stores themselves.

The past two decades of industry consolidation, supply chain advances and category management have failed to move the needle on basic merchandising performance indicators such as out-of-stock rates, promotion compliance and planogram compliance and decay. The numbers remain so disheartening that we routinely plan not to measure them. This despite their obvious causal link to GMROII and profits.

Here is evidence of what I call "dis-economies of scale." It should be a source of more than a little vexation across the retail consumer products industry. Top executives know with certainty that buying clout and elimination of redundant processes are competitive necessities, but they prefer not to call attention to the fact that larger strings of larger stores are also much harder to steer.

Today's fast-moving consumer goods chains teeter along the precipice of the "big middle" - the cold, dark place of persistent merchandising mediocrity ruled by a mythical, but non-existent, average shopper. Never fear - we've got Shopper Marketing to keep us from the abyss. We segment and target our customer base, and we study our targets, so we derive insights about our shoppers and make plans to reach them on their terms.

Those shopper insights let us design offers tailored to specific shopper groups. They are also inputs for automated planogram tools that let us design tailored merchandising plans for each category in each store. We can layer on store-specific pricing, using the latest optimization technologies, and before long we've defined thousands of store-specific matrices of space, mix, price points and deals.

Yes we have some impressively intricate plans, but can we implement them? Well, there's a dizzying amount of detail to cover, but realistic solutions may finally be at hand.

Retailers, manufacturers, brokers and merchandising services organizations have recognized for some time that they need a systematic way to parcel out the tasks to their minions in the field. That has led to a proliferation of home-grown and commercial Work Force Management (WFM) software solutions that permit headquarters to push instructions out to the individuals tasked with performing them.

WFM solutions are generally one-way (HQ to the field) and intra-organizational with an emphasis on employee management. That is, they permit managers to send instructions to their own people in the field without provision for feedback. Often those instructions arrive in the form of an email or memo.

Expanding the WFM principles more specifically to the retail environment has led to shift in focus from managing people to managing activities. Solutions of this type are called Store Execution Management (SEM), and they are oriented toward field force automation and task or process efficiency. A number of third-party MSOs and direct store delivery organizations deploy SEM solutions today. As a rule these too are intra-organizational, with limited feedback possible for the host retailer.

Now we are seeing a new class of solutions reach the market, of a type I like to call Merchandising Performance Management (MPM). They are distinct from legacy WFM and SEM solutions in several important ways. First, they are engineered to manage outcomes, not just tasks or people. Because they incorporate a two-way platform for feedback and reporting, they support capture of performance metrics in real time.

Second, they are inter-organizational by design. That is, they support interaction from all the parties who plan merchandising and who touch the merchandise in stores - retailers, manufacturers, MSOs, brokers. This is most commonly accomplished through establishment of a secure, Web-based portal that is accessible as an online service. As a result, all parties in the merchandising ecosystem view relevant performance data and contribute required feedback to the greater information flow.

Presently there are at least eight solution providers who offer MPM software and services to the retail market. Several are early-stage companies and relatively untested. None are perfect. All hold out the promise of a practical, every-day, plan-do-measure store compliance discipline that can find hidden profit in the stores - where it all started.

Intricacy is the enemy. Most of what we try to do is not that hard. But there is so much detail to cover and those details are so ... relentless. Performance anxiety must inevitably follow.

Unless... We adopt sound Merchandising Performance Management practices. ISI Network has assembled a report that outlines some tools and options for senior executives. I encourage you to take a look. It's good for what ails us.

Watching The Wheels

2009-04-27T16:09:00.012-07:00

Eleven days ago I was a passenger in a van traveling south on Rte. 15 toward Hermosillo, Sonora, Mexico, when we came upon a sight that turned our heads and quieted our voices.

About 100 kilometers south of the border city of Nogales, Arizona, near the town of Benjamin Hill, Sonora, we spied a line of 18-wheelers stopped in the northbound lanes. They were waiting for inspectors in military uniforms to clear them for the trip further north.

The line of tractor-trailers stretched impressively into the distance, over the next rise. Several drivers lolled on the highway median waiting their turn. It had evidently been a long wait.

As we crested the hill, it became apparent that the line-up went much further. In fact, it took about 10 minutes at highway speed to pass all the idling trucks, each rise delivering another surprise; until finally we passed the last pair of truckers, standing in the weeds, checking their watches.

“That’s a lot of money sitting still,” I said to the man sitting next to me, who returned a serious nod.

We pressed on to our destination, the Sonora Spring Grape Summit, where it would turn out, that line of trucks would be a topic of some serious conversation for the growers, packers, importers, retailers and officials present.

Marco Antonio Camou, undersecretary of agriculture for Sonora's state department of agriculture, who addressed the group, said the backup we had witnessed stretched for “16 or 17 kilometers,” causing delays of approximately 10 hours duration. (The satellite photo above shows the front of the line on a recent day.)

Camou showed some photos of a just-completed security inspection facility on the highway designed to process 180 trucks per hour, using sophisticated x-ray machines and other gear. It was scheduled to open before the end of April, with a full-time complement of up to 180 Mexican military personnel barracked on the premises. Their primary mission: Find and stop contraband, especially drugs.

On our return trip north the next day, we passed a similar lineup and got a better view of the impressive-looking inspection station on the east side of the highway. Watching all those big wheels standing still made the little wheels in my head turn furiously. After my return to Tucson, I did some fact-checking and quick math:

An average 18-wheeler is 60 feet long; so about 85 trucks, parked end to end, cover a mile.
16 kilometers is almost exactly 10 miles; so the line we witnessed encompassed about 850 trucks.

If we assume each truck carries legitimate cargo valued at an average of $50,000, then we saw $43 million worth of goods sitting idle, for an average of 10 hours, adding a full day to the time of transport.

Cost of capital? $43,000,000 x 5% per year /365 days = about $6,000 per day
Cost of loss of product freshness? Assuming an average of 0.1% per day = $43,000/day
Cost of driver down time? At $50/driver/day = $50 x 850 = $43,000/day
Cost of diesel fuel burned by idling trucks? Assuming 30 gallons/truck/day x $3.00/gal. x 850 trucks = $77,000/day

In other words, the line-up we witnessed added nearly $180,000 to the cost of goods moving through that inspection point. In one day.

Not to mention the unreported cost to Mexican taxpayers for construction and maintenance of the inspection facility, equipment and troops to man it.

Mind you, these internal security checkpoints (they are located on most major highways in northern Mexico) are in addition to the U.S. Customs inspection points the same trucks must pass at the border. The Mariposa station between Nogales, Sonora and Nogales, Arizona, reportedly handles almost 300,000 trucks crossing into the United States annually. All of them wait in line too. To try to improve this bottleneck on the U.S. side, a new facility expansion has been authorized here, at a cost of $200 million over the next 3-4 years.

For my new friends in Hermosillo who grow, pack and ship more than 10 million boxes of table grapes to American markets each spring, the improved inspection facilities should save time, money and product freshness. Sadly, the cost and complexity introduced by realistic security measures on both sides of the border is unavoidable and shared by all of us.

ISI Network Podcast on NARMS.com

2009-04-22T08:00:00.008-07:00

Earlier this month, I had the privilege of delivering a talk about In-Store Implementation at the Annual Spring Conference of NARMS, the National Association for Retail Marketing Services, in Colorado Springs.

NARMS is an organization of more than 400 companies who perform value-added services in retail stores, including merchandising, measurement and event marketing. Its members have a strong vested interest in the professionalization of In-Store Implementation.

A PDF version of my presentation deck is available for download on the ISI Network site. See the item, "Illuminating the Black Hole," at the top of the right-hand column on the home page. (Free registration is required.)

Subsequent to my talk, I was interviewed about the latest activities of the In-Store Implementation Network. That conversation was captured in a brief podcast that may be played with any common audio player.

Listen To the Podcast (about 5 min).

As always, your feedback is invited.

RFID's Widening Gyre

2009-03-07T08:21:00.004-07:00

Two recent news items about retail giants, radio-frequency ID tags and promotional displays have pundits punning and some market vultures vultching:

When Procter & Gamble declared it would no longer apply EPC/RFID tags to promotional displays built for Walmart stores, it triggered critiques of the technology and its underlying economics. Observers circling above the decaying carcass of the program sniffed that just maybe, Walmart wasn't delivering a measurable benefit from the solution.

Within days Walgreen Drug Stores delivered a more positive spin, stating that the very same sort of radio-frequency tags had helped it improve its in‐store execution in the past year "to nearly double the industry average."

Never mind that the industry average stinks like carrion.

David Van Howe, vice president of purchasing for Walgreens, called the information captured from the tagged displays a "game changer" for the chain, and at least one partner, Revlon, said the program delivered "unprecedented insight into what works and what doesn't with consumers."

So what are we to take away from all this? The vultures in our midst keep trying to declare retail RFID dead on arrival. The tech pundits claim they have seen a glorious future in those tiny transponders. I say the misdirected focus on RFID technology threatens to derail an important initiative.

It's not the tech, it's the practice! RFID has been ascribed with magical status by some, but I'm here to tell you - it's no tri-corder, not even a silver bullet.

When it comes to at-retail compliance - potentially the largest business improvement opportunity presently facing the retail consumer products industry - point solutions are pointless. The system of practices is everything.

P&G's decision exemplifies the frustration held by many manufacturers with In-Store Implementation of promotions. There is no routine, repeatable, measured and collaborative practice to execute planned promotions in stores. Data on compliance, if available at all, arrives weeks or months after the fact and it reveals that roughly half the spending is ineffective.

Even the mighty Walmart, it seems, has so far been unable to master this challenge on behalf of its trading partners. It means that billions of dollars in trade and promotional funds are badly spent while we debate which brand of ID code to attach to the display headers.

When it comes to optimizing In-Store Implementation, grease pencils and clipboards may be plenty of tech if the process is right. The retailer that formulates a compliance plan, enables it with appropriate solutions, and measures its outcome relentlessly will always achieve better performance on in-store programs. This is equally true for off-shelf display compliance, resets, planogram maintenance, new-product cut-ins, sampling programs, or floor polishing.

Of course large chains like the two Wals require some tools to help manage scale and stabilize best practices. For fixtures and displays, RFID may in fact be a useful input to the process. But it works at Walgreens because it has also instituted the in-store practices to make it work.

For the past two years, the In-Store Implementation Network has advocated establishment of a fully collaborative "plan-do-measure" retail compliance discipline that would ensure real-time visibility and accountability. We cannot improve what we do not measure. Retailers - and that includes even the likes of Walmart and Walgreens - must step forward on this issue if we are to see real progress on retail effectiveness and shopper experience.

Six Dimensions of Shopping Time

2009-01-30T09:50:00.016-07:00

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 phsically 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.

Next Era for In-Store Implementation

2008-12-16T08:38:00.019-07:00

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.

The Value Pyramid of Shopper Media

2008-11-22T14:06:00.001-07:00

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.

NOT TV!

2008-10-14T09:44:00.005-07:00

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.

Marketside Rises in Phoenix

2008-10-06T11:22:00.000-07:00

It's not quite your grandmother's corner grocery store.

I had the opportunity to join residents of several East Valley communities near Phoenix at a preview of a possible small-supermarket future on Oct.4, when Walmart simultaneously opened of four 15,000 square foot Marketside stores.

The Marketside openings seem like a challenge to UK grocery powerhouse Tesco, which already operates 25 of its small-footprint Fresh & Easy Neighborhood Markets throughout greater Phoenix.

“This is a conventional grocery store shrunk down,” said John Rand, director of retail insight for Management Ventures, Inc., who was spotted taking notes at the Tempe Marketside location. “Shoppers will understand it immediately, whereas people are still figuring out Fresh & Easy.”

The Marketside assortment heavily features national brands, a marked contrast with Fresh & Easy, which emphasizes private label. However like the Tesco format, this new effort from Walmart features an appealing range of ready-to-eat, and ready-to-prepare foods and meal kits, evidently intended to serve the grab-and-go lifestyle of many busy consumers. The company also claims some 300 natural and organic products throughout the store. Prices were deemed “competitive” by several observers and competitors on the scene – some visibly lower than conventional supermarkets, but only a few matched the Walmart Supercenters that seem to permeate the area.

The four Marketplace units are located in freestanding former Osco drug store locations. At least one location still had its drive-thru intact – a porte-cochere-like structure that could be adapted for grocery pre-order pickup, although no such services were offered. On the opening Saturday, arriving crowds were tempted by indoor and outdoor sampling stations offering deli meats and cheeses from suppliers Dietz & Watson, Sushi rolls from Chef Select, Marketside pizza, and 8 ounce bottles of Vitamin Water beverages.

A variety of prepared food items – side dishes, entrées and “family sized” meals – were offered for $2, $4, $6 and $8 each, displayed in sleek coffin coolers. Shrink-wrapped meal kits, priced at around $10 and $11 included chopped raw ingredients and sauces for such dishes as chicken fajitas, Mongolian beef stir fry and Asian orange chicken. Staffers clearly were challenged to keep these displays filled, as shoppers armed with opening day coupons (one offered a discounted price on an entrée of six cents) emptied them into their carts.

All prepared and ready-to-prepare foods had two-inch wide adhesive labels indicating the date each item was prepared and when it should be used by. These items are packed and delivered to the stores by an area contractor, according to an employee. In contrast with Tesco’s Fresh & Easy operation, which does its own food prep and pack at a centralized facility for shipment to the stores, Walmart has not yet set up such a facility.

We learned some local residents had received gift bags filled with product samples and coupons in the days prior to the opening. They may have brought in the crowd at the Chandler store on Saturday morning, but there were also an impressive number of observers, staff, and local Walmart employees on hand, and at one point a busload of Asian visitors who were evidently on an organized tour.

Three of the four stores offer beer and wine, however the Chandler location did not, and employees volunteered that this was because of its location directly next door to a KinderCare day care facility. As a result, the Chandler store had a little bit of floor space to spare, which was largely absorbed by what may be described as a “power square” where temporary promotional displays were located. One pallet display was stacked with cases of Niagara drinking water, 24-count half-liter bottles, priced at $2.97. Another offered 3.25-ounce bags of Pop Chips, “market value” at $1.50 each. Other display tables offered baked goods and fresh fruit – bananas were 68 cents a pound, and medium honeydew melons were $3.27 each. One shopper commented that this area, at least 20 feet wide, would easily accommodate eight or more café tables and chairs during the lunch trade.

A visiting Walmart operations person informed that energy-saving features adapted from the well-known Walmart green project stores in Texas included pull-down “shades” on the cooler cases that can be closed at night to save on electricity use. Overhead lighting was compact fluorescent throughout, with liberal use of LED lighting in the black-framed freezer cases that made product stand out clearly, even through the double-glass doors.

Notably, package sizes throughout the store were small, a contrast with Walmart's supercenters. Individual steaks were available in the meat case, and the largest size liquid laundry detergent available was the 50-load concentrate. This perhaps reveals a great deal about the Marketside method - it's designed to serve the grab and go world of commuters and single-person households. Mass consumers would do better to pilot the SUV over to Sam's Club or the Supercenter.

Bulletin from the Big Easy: Giant Killers

2008-09-29T00:46:00.001-07:00

I returned Friday from the Northshore Business Conference, sponsored by the Southeastern Louisiana University Small Business Development Center, where I was privileged to be invited as the keynote speaker. (The event brochure may be downloaded here.)

The event took place Sept. 25 in Slidell, LA, a fast-growing town located north of Lake Pontchartrain, which makes it a bedroom community for both Baton Rouge and New Orleans. The area is enjoying a modest economic boost due in part to the displacement caused by hurricane Katrina a little more than three years ago.

Conference delegates represented regional retail, wholesale, service, finance and other trades. Especially considering the duress some of their businesses had just suffered due to the one-two punch delivered by hurricanes Gustav and Ike, I was grateful for their attendance.

My talk delivered a snapshot of current economic, retail, consumer trends; discussed where they are leading the industry; and proposed how independent retailers - "Giant Killers" - might position themselves for success within that competitive landscape.

Preparing for and attending this conference was a learning experience for me. In particular, I'd like to relate two brief anecdotes about the flexibility and resilience of businesses in Louisiana's North Shore that are worth at least a second thought.

First is from an area fencing wholesaler who attended the conference and was evidently engaged and enthusiastic throughout. At the break he described how post-Katrina re-development had caused demand for fencing materials to boom. His business had grown considerably and he had expanded his facilities. Some retail competitors were not so lucky, however, so home and business owners were coming in to his warehouse searching for materials and parts which had become harder to find locally.

"We are being pushed into retailing," he said, expressing some regret that his newly enlarged warehouse did not have a showroom area set aside for the walk-in business. The good news: some of the parts now in greater demand bring higher margins. The bad news: the new direct-to-customer business adds complexity, expands his assortment, and requires longer weekend operating hours. Talking to this energetic and positive business owner, I had little doubt that he would rise to the opportunity.

The second anecdote involves Folse Seafood, a retail and catering business operated by Jerry Folse and his son Jay out of Gonzales, LA. I was impressed by some press coverage I uncovered while researching my talk, and decided to give them a call. The answering machine indicated that the shop was temporarily closed following Gustav and Ike, but gave another number for Jerry, which I dialed.

To my surprise, Jerry answered his cell phone from the cab of an 18-wheeler. He and Jay were caravaning in two rigs toward one of the oil refineries in southwestern Louisiana, on a catering job. It seems the 2,000 workers laboring around the clock to bring the refinery back on line needed to be fed, and Folse Seafood had thousands of pounds of frozen shrimp and house specialty crawfish bisque that could keep the hungry workers nourished.

"Our power was out, and I knew the merchandise in our freezers would eventually go bad," Jerry told me. "I sent ten emails to contacts I had at the oil refineries and other businesses along the Gulf Coast and six of them responded 'yes we need you'."

He booked a month's worth of catering business at facilities in Louisiana and Texas, closed the retail location, loaded the trucks and hit the road. I asked Jerry if he was worried about the consequences of closing his doors for so long and the certainty of his answer impressed me deeply: "Our customers will come back to us in late October when the new crawfish season begins."

Both these stories tell us something about the resilience and ingenuity of independent business owners in the face of extraordinary circumstances. I can hardly imagine a chain retailer responding to local challenges with these levels of commitment and creativity. Hats off to these "giant killers" and their peers across the Gulf Coast who are battling their way back to prosperity with grit, smarts and heart.

SCAMP: Five Pillars of Shopper Experience

2008-09-19T10:05:00.000-07:00

I had an invitation recently to address an executive summit on Shopper Experience on the subject of In-Store Implementation. Regrettably, the event did not materialize, but the thought process it inspired could not be stopped. I decided to capture some of it here in the Tirades.

But first, are you experienced?

If you have ever shopped, of course you are. Shopper Experience is one of those big ideas that is hard to define because it encompasses everything we encounter in connection with a retail shopping visit. It begins with the traffic on the drive to the store, takes in the sights, sounds and smells of the store environment, and layers on the actions that take place while we are there. It probably even extends to the drive home and the interaction with purchased products.

Wikipedia defines it this way: "Customer experience is the sum of all experiences a customer has with a supplier of goods or services, over the duration of their relationship with that supplier. It can also be used to mean an individual experience over one transaction."

A large and complex construct, as the consumer behaviorists might say. To my mind, Shopper Experience cries out for a bit of de-construction. I took a crack at it.

As I see it we can break down the shopping experience into five "pillars" or components. Taking each in turn may make the whole concept easier to grasp for purposes of analysis. More importantly, it may lead us toward practical ways to improve the whole shopper experience by optimizing its elements.

My proposed five pillars of Shopper Experience are: Service; Convenience; Ambiance; Merchandising; and Price (SCAMP). I've thought about these pretty carefully and I believe this breakdown meets the MECE test. That is, they are mutually exclusive and collectively exhaustive. Each of the five pillars merits its own definition, and each encompasses much detail. For the purposes of the present post, let's briefly define each:

Service. People, practices, policies, and the training that enables them. Top performing retailers excel at both hiring the right people and setting service practices that sustain and support their success.

Convenience. Both time-saving and effort-saving. Sometimes the line between time and effort may be blurred with other pillars - as when it takes too much effort to locate a desired product. Is that a merchandising problem?

Ambiance. Physical design of store environment, including lighting, spaciousness and other sensory cues like temperature, odors, and sound. And yes, other patrons figure into this experience pillar - we tend to like to shop with people like ourselves.

Merchandising. The product assortment; their arrangement on shelves or displays; all associated messaging designed to inform and persuade.

Price. Base or every-day pricing and store price positioning, of course, but also promotions and markdowns when they occur. Shoppers tend to form a relative price-value perception or price image for each retailer based on all these cues.

SCAMP is submitted for your consideration. I find it a useful first cut at analyzing Shopper Experience. Of course, each of the five pillars merits much more detailed discussion. That's an opportunity for future Tirades.

Understanding Shopper Media

2008-09-15T22:02:00.000-07:00

The title of this post is meant as an homage to media sage Marshall McLuhan, whom I admire greatly as a thought leader regarding the impact of television, radio, print and film on the collective culture and consciousness of our society. I had the very good fortune to learn about the maestro's work at the knee of his protege the late Dr. Neil Postman, professor of Media Ecology at New York University, when I studied there in the early 1980's. I would encourage readers to look up books by both these great scholars. One can only imagine what they would have to say about the present state of blogging, text-messaging, and in-store digital media.

Their work has certainly influenced my own attempts to understand retail marketing and merchandising. In the early 1990's, while working as managing editor of BrandMarketing magazine, I penned: "The retail store is a communications environment for brand messages." This statement I believe captures the modern shopping experience at several levels, and it may help us confront and make sense of the incredible complex of messaging that takes flight at shoppers between the electric doors and the point-of-sale terminals every day.

Start by visualizing the 30,000 package labels in a modest sized supermarket - many of these multiplied by two, 10 or more facings into section and category tableaus. Add to those the shelf-talkers, aisle signs, price labels, floor graphics, coupon dispensers, shopping cart signs, and product displays that decorate stores and you begin to form a picture of the imposing gauntlet of competing attempts at persuasion that shoppers confront and navigate on a daily basis.

And that's just the visual, static communications. Lighting, fixture design, even environmental systems all convey implicit and explicit messages aimed at influencing shopper behavior. Sales people cannot be overlooked as messengers of persuasion. Modern retail environments are also rife with electronic media of various stripes - from in-store audio and radio ("Attention Kmart shoppers...!) to a variety of interactive kiosks, and most interestingly of late, to networked video screens that display full-motion service and advertising content. These are often referred to as "in-store digital signage" because the folks that make the hardware (screens, switches, network gear) and software (media asset management systems) imposed their terminology on the emerging industry.

Two major influencers in the digital media trend, Walmart Stores and its supplier PRN Networks, originally dubbed their network, "Wal-Mart TV" - a metaphor that stuck, because after all, television monitors were used to display the content, and commercial time was sold to fund it. It seemed at first to mirror the classic advertising model favored by the television industry - audience reach, delivery frequency and wrap-around content. But don't let the rectangular, glowing screen deceive you:

This is not TV! Any more than the rectangular glowing screen on your computer is TV; or the rectangular glowing screen on your cell phone; or the giant rectangular glowing screens on the strip in Vegas; or the rectangular glowing screen on the dashboard of your car that tells you what direction to go next. These are all video monitors, but what they are, in essence, is determined not by their form factor but by the communications environments in which they are viewed.

Let that sink in a bit. What I'm proposing here is that the observer's context and mindset are what define the media experience. It's about where the viewer is when they confront the screen (living room sofa, desk, auto, store, street, transit hub, etc.) It's about what they are doing and what objectives they are pursuing while they view the screen. It's about how the viewer feels before they confront the screen, how they feel viewing the screen, and how they feel after they view it. It's about what they do after they view the screen, what they remember about the experience and the enduring feelings they carry with them for minutes, days or years afterwards.

So the retailers, advertisers and marketers who are today struggling to press in-store media into the classic advertiser mold of reach, frequency, cost-per-thousand (CPM) and gross rating points (GRPs) are barely confronting the scope of the challenge before them. The in-store media measurement models we are newly hearing about don't begin to tackle the really big issues that come along with the revolution in Shopper Media. What does the shopper see? What does she feel about it? What does he do about it? What do they do and feel about it later?

These questions impose a new discipline upon us, like it or not. It's time to get busy on the basic shopper behavior and attitude marketing research that begins to shed some light on how people confront persuasive messaging in the retail environment. Only armed with this data will we be able to make reliable inferences about the value we assign to a delivered message. Counting "opportunities to see" is simply too crude for this complex, multi-shaded media environment.

I'll have a lot more to say about this topic going forward. For the time being, let's pause and consider how little we understand so far about digital media and the shopper experience - and how much of an opportunity lies before us.