PDM and Sigma announce 20% sales increase using in-store digital media network

Published on: 2015-02-05

This came in an email this morning:

The month-long research combining work by Galaxy Research and Sigma audited point-of-sale data, compared two products (Hydralyte and Blackmores Women’s Vitality) in four pharmacies year-on-year, month-on-month and like-for-like stores.

Key results from the research showed:
  • In-store advertising increases sales by up to 20% on the previous month where no advertising was shown
  • In store advertising increased sales for the same month over the previous year
  • In-store advertising not only reversed the decline in sales for the previous year but increased sales by a minimum of 55%
The methodology consisted of using four pharmacies, two products over one month. The pharmacies were Amcal and Guardian in NSW and Victoria. The products advertised were the Hydralyte range and Blackmores Women’s Vitality.

The data analysed is point of sale information provided by the pharmacies. Sales were tracked for March when there was no advertising and April when the advertising was implemented 3rd week of April.

To ensure the data was uninfluenced by other factors, there wasn’t any catalogues, dump bins or promotional offers provided in April.

It is clear from the sales data that in-store digital advertising has a positive effect on sales benefiting the pharmacy and suppliers.

Our take:

These results are interesting in that they do a reasonable job of presenting a controlled experiment to illustrate only the effects of the digital signage network, and not any of the other out-of-home media materials that might impact sales (specifically catalogs, dump bin flyers and other unrelated promotions). That in itself is rare in our industry. Additionally, the comparison of sales data year-over-year helps to illustrate not only the strength of the medium, but also serves as another control.  Finally, it was nice of the authors to qualify their results and limit them only to the items being tracked -- in this case, pharmacy items.  All too often we see press releases touting digital out-of-home advertising as some sort of panacea, and while it has proven successful in numerous verticals, the choice to focus only on the studied items shows a good  deal of restraint.

As for the results themselves, do we believe them?  Well, 20% is certainly a good bit higher than most of our customers report for year-over-year, category-specific purchase increases, but it's well below some of the star performers we've encountered, which have seen as high as 400% sales lifts thanks to digital signage.  In all, we recommend taking these conclusions with a grain of salt, as always, but feel that they're pretty reasonable and believable.

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