POPAI's report, titled "Measuring At-Retail Advertising in Chain Drug Stores: Sales Effectiveness & Presence Reporting" (which POPAI members can download for free) paints a very complete picture of the POP marketing techniques used in chain drug stores, examining brand messaging, educational information and special promotions, including rebates and sweepstakes entries. The overall results from these marketing techniques were quite impressive:
With an average CPM of $9, At-Retail Advertising compares favorably to print and radio advertising. And because this media is at the point of purchase decisions, its direct impact on sales and brand is immediate.While the average CPM for at-retail advertising is claimed to be about $9, the study found that CPM numbers ranged between $1 and $9, depending on the cost of the advertising technique, and the average traffic in its area of influence. Also, keep in mind that POPAI's report focused strictly on traditional in-store advertising techniques, so the CPM for digital sign displays and interactive kiosks may be different (though not necessarily higher, if you consider that CompUSA found the CPM for digital signage in its stores was only around $1.13).
Conducted by Prime Consulting Group, the study goes further in measuring reach and frequency in the drug store environment. Findings show Retail Marketing delivers 6.5% in incremental sales while reaching an average 5,850 people per week. Other findings:
Industry giants Walgreens, CVS, Rite Aid, and Brooks Drugs provided 128 drug stores across the US for the study. Sponsors included Frito-Lay, Pharamavite (Nature Made Vitamins), Adams (gum & candy), Unilever, and Dr. Pepper/7up.
- 3 to 4 times greater sales lift when advertising is part of the promotion program.
- 31% of the brands [studied] experienced over 20% sales lift
- At-retail advertising drove additional sales 70% of the time
Speaking of store traffic, this brings me to the next report (PDF format), this time from sign maker Impact Media and in-store research company Sorensen Associates. Using Sorensen's innovative PathTracker technology (a series of computer-controlled video cameras that can monitor customer traffic across an entire retail store), Sorensen and Impact were able to create a map of shopper traffic patterns in a group of drug stores. Not surprisingly, the study found the heaviest traffic to be concentrated upon the entry/exit areas and the checkout counters, though over 80% of customers also visited the photo, electronics and snack areas of the stores, and the pharmacy was a popular destination as well. The color-coded map in the above linked report also gives us an idea of overall customer "density" -- the number of visits to an area combined with the average amount of time spent in the area. These, of course, are the prime marketing sites where in-store advertising can help spur sales of items in the area, as well as impulse-buy items elsewhere in the store.
With such a huge amount of traffic coming through the front doors and hovering around the checkout counters, it would seem to be the ideal place to put a sweepstakes kiosk to register guests, or a digital sign promoting sales and featured products. The missing piece of data, though, is how advertising in one part of the store might affect a purchase in another. For example, it's easy to see how signage in the snack aisle might encourage a shopper to buy one brand of snack over another. The shopper is already in that aisle (so they're probably primed to purchase snacks anyway), and they're already faced with a brand decision, since there are typically dozens (if not hundreds) of snack products to choose from in a typical drug store snack aisle. So any extra motivation provided by a digital sign could easily sway the decision. But is that also true when a customer first steps foot in the door? Granted, the shopper is most likely coming in to purchase something, but I'd really like to know what kind of influence our digital merchandising efforts have when customers are walking in or checking out.
Likewise, I've always been a bit skeptical about checkout signage and other captive audience initiatives designed to capture consumers' attention while they wait in line. Aside from perhaps boosting sales of items in the checkout area (like magazines or candy), it doesn't seem like it should be able to affect same-day sales of other things in the store (since the customer is already in checkout-mode). And on a slow line, repetitive or annoying content could potentially aggravate customers (but of course, well-run networks should realize this, and adjust their programming to take it into account). With that said, checkout channels whose goal is to drive consumer behavior outside the store (such as seeing the latest new movie release in a nearby movie theater chain) present a different behavioral target beyond an immediate purchase, and would be subject to a different set of metrics than we're discussing here.
As POPAI notes in their report, in-store advertising is becoming a measured medium, with the potential to surpass radio and TV in terms of measurement accuracy. And of course, by knowing where customers travel within stores, we can optimize the effectiveness of kiosks and digital signs by placing them in high-traffic locations where they can have the most impact, driving sales and boosting the bottom line.