In-store Retail Media: A Hard Look At What Works

In the bustling world of Retail Marketing, a new player is making waves: In-store Retail Media.

With $20-30 billion already allocated to shopper marketing activities in the US and UK alone, this sector stands as the second-largest expense in CPG companies' marketing budgets, trailing only behind digital spend.

The landscape is set for even more growth, with an additional $5-10 billion expected to pour into in-store marketing - specifically in the form of in-store retail media. Retailers are eyeing digital signage as a golden opportunity to tap into this burgeoning market.

?? In-store retail media has skyrocketed in importance, becoming the fastest-growing initiative among retailers' top monetization solution investments.

We're witnessing the dawn of a new era: the digitization of physical stores. The potential reach is huge - Walmart US alone, with its roughly 139 million weekly in-store customers, boasts that they can deliver Super Bowl-sized audiences every week through their in-store screens.

Where Will the Billions for In-Store Retail Media Come From?

Will they be redirected from existing shopper marketing budgets, resulting in a net-neutral outcome for retailers? Or will they be sourced from brand budgets, potentially leading to a net positive for retailers at the expense of other media channels like TV, OOH, and digital?

This complex issue hinges on a fundamental question - how much value will in-store screens truly add to the shopping experience?

• Will screens simply help shoppers find promotions more easily?
• Will they educate shoppers and facilitate the discovery of new and exciting products? Will they assist in locating familiar brands?
• Will they influence shopping cart sizes in favor of advertised brands?

Or is there a risk that shoppers will tune out screens, or worse, begin to complain that their local supermarket is starting to “look like Las Vegas”?

We're still in the early stages of in-store retail media, and thorough research on its effectiveness is crucial.

Shopnosis takes a unique approach to this challenge - recruiting participants to wear smart glasses that record their entire shopping journey, then using AI to determine what they observed while shopping and what they ultimately purchased. The Shopnosis data for this case study draws from millions of in-store interactions at leading retailers across Europe and the US.

Let's begin by addressing a fundamental question - do shoppers even notice screens in stores?

Do Shoppers Actually Notice In-Store Screens?

The heatmap below often surprises many industry professionals.

For those unfamiliar with heatmaps, red areas indicate where most shopper attention was focused, green areas show moderate attention, and areas without color signify minimal focus.

This heatmap is based on the gazes of hundreds of shoppers in a real store - and it's not an anomaly. Shopnosis has produced similar heatmaps across various retailers, categories, and geographies, including some of the world's largest retail chains. The patterns are remarkably consistent.

??By default, shoppers don’t pay much attention to in-store screens.

Caught off guard? You're not alone.

In our client meetings, we often showcase videos of shoppers passing by massive screen displays, only to focus on products on a pallet, their phones, or simply trying to navigate the store.

Let's break this down into numbers:

According to Shopnosis data, an average in-store screen will catch the eye of just 1 out of 10 shoppers passing by. However, the range is vast, given that we're still in the early days of in-store retail media.

Top-tier campaigns in our dataset show impressive visibility rates - seen by 45-55% of in-store shoppers! This is no small feat, surpassing even the best OOH or TV executions.

To summarize:

1. ?? Top tier in-store ads capture 45-55% of shoppers' attention
2. ?? Average visibility rate is 11%
3. ?? Low performers hover in the 3-5% range

? When an in-store ad does catch a shopper's eye, it holds their attention for 1-2 seconds on average.

A skilled marketer can leverage this brief window to convey the right message effectively.

How Does This Compare to Traditional Shopper Marketing Assets?

To put things into perspective, let's compare this to one of the most traditional and widely used in-store marketing assets - a free-standing branded display unit (commonly known as a shipper).

?? An average shipper will be noticed by 17% of shoppers. This is significantly above the 11% visibility rate of an average screen.

Does this mean that the flashy screens, currently all the rage in retail, are less effective than simple branded displays? The jury is still out.

Many retailers are still on the learning curve when it comes to in-store retail media. Execution is improving, more research is being conducted, and shopper-centric ads are becoming increasingly common.

What Types of Screens Work Best?

Not all in-store screens are created equal!

The most common types of screens we encounter in stores are:

• Free-standing screens at entrances and other strategic locations throughout the store
• Headers - screens positioned above shelves
• In-aisle side-facing screens on shelves
• Checkout screens

Here's the Shopnosis ranking of their effectiveness in terms of attracting shopper attention, ranked from most to least effective:

1. In-aisle, side-facing screens
2. Free-standing screens at entrances and other strategic locations
3. Checkout screens
4. Headers - screens above shelves

While this can serve as a useful guideline, remember - it's not just about the medium, it's about the message.

The Methodology

Shopnosis employs computer vision & AI on smart glasses data collected from tens of thousands of supermarket shopping trips, spanning three continents and leading global retailers.

See this cool video of what Shopnosis does and how does the tech work - you’ll love it!

In Conclusion

The in-store retail media landscape is evolving at a breakneck pace, offering both challenges and opportunities. As retailers and brands navigate this uncharted territory, data-driven insights will be vital for optimizing strategies and maximizing the impact of in-store screens. Success hinges on understanding shopper behavior, creating engaging content, and strategically positioning screens to enhance—not disrupt—the shopping experience.

Looking ahead, it's exciting to anticipate how in-store retail media will continue to reshape the retail environment and influence consumer behavior. One thing is clear: retail's future is digital, and those who can skillfully leverage in-store screens will gain a significant edge in the fiercely competitive world of Retail Media.

?? For more info on methodology, or to see this data for your categories and your region(s), please feel free to reach out: [email protected]

https://shopnosis.ai

https://www.dhirubhai.net/company/shopnosis/