Published on: September 10, 2007
As noted above, CBS has acquired SignStorey, the digital display company with flat-screen televisions in more than 1,400 US supermarkets, for $71.5 million, will target US supermarket shoppers in new ways starting this week.
Part of my commentary on this deal follows:… I would remind retailers that the customers who walk in the front door ought to be treated as their shoppers, not the manufacturer’s, and certainly not CBS’s.
I know that the revenue from these systems goes right to the bottom line, which is very nice. And I know that an argument can be made that these screens heighten the entertainment value in the store. (Though if they start showing clips from “CSI” in screens hanging near the service meat department, it may end up being a little counter productive.)
But there also is a danger that they become more noise, more clutter, more of a distraction from whatever brand equity the retailer is attempting to generate through a compelling shopping experience. If I am a retailer, I’m looking for ways to make my store distinctive and to reflect a singular marketing message about who I am and how I view my customers.
In-store television systems can do that. I’m just not sure that they always do.
The Journal reports that CBS is trying to enter into these kinds of agreements with as many entities and potential vehicles as possible, and quotes George Schweitzer, president of the CBS Marketing Group as saying: "I would love for somebody to be able to say, 'I'm really getting sick of seeing all this CBS stuff. That'd be a compliment."
Maybe to him. But if I’m a retailer, that’s the last guy I want having access to my customers. Because he doesn’t care about them and doesn’t care about me. He just cares about delivering eyeballs to advertisers and getting them to write a check. Which doesn’t strike me as an intelligent long-term play.
Jeff Weidauer, who happens to the vice president of marketing at SignStorey, disagreed with my assessment:I think you’re underestimating the retailer here. As a 29-year veteran of the supermarket wars, I can assure you that all of them agree with you when you state that “customers who walk in the front door should be treated as their (the retailer’s) shoppers.” What the retailer isn’t always good at though, is how to treat that shopper, or how to create compelling, relevant content in-store that won’t just add to the clutter. Your point that in-store systems can set a retailer apart and reflect a single marketing message is dead on. But that doesn’t always happen either.
The real test is to create content that speaks to the shopper, while working with all the other internal and external media already out there. It’s about making a seamless, consistent presentation that doesn’t interrupt or annoy, but informs and entertains. Done correctly, the shopper is motivated, but not pushed. Most importantly, she appreciates the information.
SignStorey has been very successful in building in-store networks for a few years now, and building a network is far more than dropping some screens into a store and running ads on it. The acquisition by CBS provides some important benefits for SignStorey, and more importantly, its customers. CBS delivers funding, access, and content that might otherwise take more time and resources for a smaller company. That doesn’t mean that CBS will be airing CSI, to use your example, at your local store. It does mean that the combined expertise of CBS and SignStorey provides an opportunity for the retailers we work with to develop impactful, differentiating and meaningful content that entices shoppers, moves products and builds brands.
At SignStorey we’ve never thought of the customer as a captive audience. She will vote with her feet if she feels that she’s not appreciated, or that we’re trying to force her into watching our programming. But our success has been built upon using customer feedback to design our programming, and we’ll only get better at that with the addition of more resources, and a greater library of content. And that fact that CBS had the vision to make this acquisition speaks volumes about how serious its intentions are to be a player in this growing market.
Finally, it’s not about getting the advertisers to write a check. We could do that, but we’re here for the long-term as well. Digital in-store is a new medium, and new media don’t come along very often. We’re taking the long-term approach to grow the business, in a way that sets our retailer partners apart. And we never, ever forget that our first duty is to the retailer, and the shopper who goes there; without them, this is all academic.
Though I have to admit that I remain more than a little skeptical.
And while Jeff Weidauer sounds persuasive, and certainly has the supermarket credentials to back up his arguments, I still think that if I were a retailer George Schweitzer would scare the hell out of me. Because I’m think he’s interested in buying ears and eyes, and isn’t all that worried about the retailer in the long-term.
That said, I could be wrong.
Then again, maybe not…because I’m not all alone. MNB
user John Rand wrote:Boy, I can hardly imagine a less attractive statement than your quote from CBS! I will gladly pay him the compliment he is seeking – I am already heartily sick of his network and all those like them. I bought a set of noise canceling headphones just to screen his stuff out on airplane flights, and I am thinking of wearing them to the grocery store next.
Nothing in our research indicates people want media intruding on shopping – but there are plenty of people who work on the much more useful issue of communicating something helpful and useful to enhance and guide the shopping experience. Make my shopping easier, make it clearer, guide me around all this enormous choice – yeah, I can see that as a positive thing. Blare a bunch of irrelevant programming at me – and you are gonna be talking to the earbuds of my iPod, or more likely I won’t be there at all.
If I were a supplier and felt pressured by some retailer to buy airtime on one of these in store networks, I would buy SILENCE – and put my logo on it. (This moment of silence and peace brought to you by XXX)
Then give me 30 seconds of scenery. Or a blank screen.
Anybody want to bet how many shoppers would respond more positively to that, if only by contrast?
I’m not taking that bet.
Some other comments…MNB
user Denise D. Sladek wrote:The value that the retailer brings to his customers in-store is the programming content on this network. If you had taken the time to look at the content that is created on this network, you would see the value it brings to consumers. It’s all seasonally based around cooking tips, entertaining ideas, meal planning solutions and the like. I’ve personally witnessed consumers watching the screens to see how to perfectly carve their Thanksgiving turkey. That’s useful information and relevant to their shopping experience. The CBS portion of the content is only providing the entertainment value, which balances out the shopping experience! It’s a win for advertisers, retailers and ultimately consumers!
From my perspective – and this is all subjective – I’ve found the ratio to be out of whack … and that there isn’t nearly enough value.
And another MNB
user wrote:The media impact on customers is one thing. There are potential positives for in-store merchandising impact. But the store employees might really get annoyed if the content is highly repetitive.
user wrote:I have a better idea…why doesn’t some smart retailer offer to pay The Food Network for the right to air certain cooking shows? They could merchandise the ingredients for a featured meal and have recipe cards available for people who don’t want to watch the whole episode. Or, maybe they could create videos about basic cooking techniques and merchandise knives and gadgets. How about videos that talk about and merchandise ingredients for nutritious meals…there’s a two-birds-one-stone idea…educate and sell at the same time.
Still another MNB
user wrote:Recently a EVP at Wal-Mart made a speech about how they did a bunch of research about how to make the shopping occasion better. One of the items near the top of the list... right after long check out lines... was a cluttered store. And they defined clutter as eye and ear. In other words shoppers hated the drive by noise as much as they dislikes aisles full of annoying displays and cascades of shelf signs. So Wal-Mart has cut back on the constant “clean up on aisle 4 “ type of PA announcements and have made Wal-Mart TV less annoying. I guess the message to CBS would be that TV that people voluntarily watch at home is a lot different than the one thrust on them while trying to complete a shopping trip. They will probably find that relevant content is the most important thing. A program about selecting fresh ears of corn would be better than a 10 second snippet about a sponsor.
And another MNB
user wrote:TV is absolutely the wrong type of content to be running in a grocery store. TV is something people choose to watch. When shoppers are bombarded with promos for Survivor and CSI in the store, their brains switch off. They say, "That's TV, I've seen it before, I'm not here to watch TV." In-store content must be developed from scratch to be contextually relevant to the shopping environment.MNB
had a story last week reporting that IHL Consulting Group has come out with a new study suggesting that the average American woman could lose 4.1 pounds a year by not buying impulse items stocked at supermarket checkout lines. According to the study, women purchase and consume as much as 14,300 calories a year at checkout, which generally offer chips, candy and soda as so-called “impulse purchases.”
I commented that there’s a ulterior motive to making the conclusions public. The IHL study also suggests that women can lose the weight by using self-checkout systems … and the study is entitled “2007 North American Self-Checkout Systems.”
But these are still interesting conclusions. At a time when people are concerned about health and fitness, maybe it is time to emphasize snack-free checkout lanes, regardless of whether the lanes are staffed or self-service. I know that many stores have eliminated candy from some lanes as a way of helping parents deal with whiny and demanding children, but here is another way to market the fact that the store is interested in its shoppers’ well-being.
Greg Buzek, president of IHL, took issue with my language:There is no ulterior motive to sell Self-Checkout systems. Rather, that retailers and manufacturers need to do a better job of merchandising and perhaps take a more socially conscious approach to that merchandising by offering healthy alternatives. Self-Checkouts are becoming more merchandised over the past two years (because of our study and others showing the impulse drop-off). There is no question that the captive
audience and tempting choices affect purchases. What would happen if we saw a change in the selection of impulse items.? I think it would be naïve to think aisles would be snack-free. But what would happen if there were healthy alternatives instead of just items that taste good but are not healthy for you.? McDonald's and Subway have seen significant sales increases through the offering of healthier side items. The same could be true for retailers. If someone wants chocolate, an apple is likely not the choice. But perhaps a sugar free chocolate would be.
“Ulterior motive” may have been an overly glib use of language. Your criticism is noted.
user wrote:I think the idea of snack free checkout lanes is pushing things a bit too far. Why don't we just put a sign at the candy aisle that reads, "Not persons under 18 admitted."
I think an alternative would be to at least switch up the deck a little as far as checkout lanes. Why not have one lane be designated for healthier snacks (i.e. Kashi, or other fitness bars, 100 cal packs, Bottled teas, etc.) and have regular snacks in other lanes? Or just combine the two and let consumers make the choice rather than just take the option away altogether.
user weighed in:First, on most days I eat right, exercise, and try not to snack. When I do my bi-weekly stock up shopping trip, it normally takes at least an hour. Then, I have to wait in line, and go through a less than optimal checkout experience. I darn well want a candy bar to reward myself for going through all that! If the checkout lane doesn't have candy, I choose another lane.
Second, I never use self-checkout, because I prefer to have a clerk ring and bag my groceries. It would be my guess that bi-weekly stock-up trips are a grocery stores bread & butter. Self-checkout lanes are not suitable for this volume of groceries. If I had to use self-checkout all the time, I'd switch to Netgrocer.
Third, I wonder if any retailer has looked at the trade off between labor saved by using self checkouts (this is the only reason they do it really) and revenue lost on high-margin checkout lane items. Or golly, what if retailers stocked healthier items at checkout? Wouldn't that be a win-win, according to this study? How about little packs of baby carrots or yogurt in the checkout refrigerators?
Fourth, retailers should stop listening to consultants and start listening to the people shopping in their stores. Wonder how many shoppers would want self-checkouts? Especially when buying produce, bakery items, etc.MNB
user Lisa Malmarowski wrote:Yes, snack free may be one way to go. Another is to offer healthy snacks or simple meal options. It's local apple season and we have bags of apples at the check out. Other times we have featured olive oil, breads and dinner ideas. And yes, we have snacks too... and magazines, cloth shopping bags, small 'wellness' items like travel sizes of sunscreen, etc.
I feel like conventional supermarkets miss the check out opportunity all of the time by giving over their lanes to rows and rows of candy. Of course, that makes it easy to manage front line staff - it's just not very creative or interesting to shoppers.
Still another MNB
user wrote:You may as well have a study that says the average IQ of people goes down staring at tabloid covers while waiting on line. Oh wait, maybe it does!
(Oh, and I love that this study targets women. You gotta love the gender bias, regardless that it’s because most females get stuck shopping for groceries.)
We got the following email from MNB
user Terry Pyles about our exclusive piece about Hannaford’s Guiding Stars program and the impact it seems to be having on sales:I really enjoyed this morning’s radio commentary on Hannaford’s star program, designed to help consumers make informed choices. I agree that one important element of their program is the highlighting of good, better, best choices, while not vilifying the less-than-optimal selections. This contrasts with the green, yellow, red system in place at Tesco. In recent months I have read so much about Tesco being the epitome of retailing excellence I was beginning to think they were not capable of poor decisions. This system, however, strikes me as ill conceived at best, and disingenuous at worst. After all, if Tesco is so concerned about the well being of their customers as to identify foods they should never eat, then why do they offer them for sale? I guess it would be a little cynical to assume that at the end of the day the goodies offered by the manufacturers in terms of slotting fees, trade funds, etc. are more important than principle, wouldn’t it?MNB
user Neil A. Bourjaily wrote:Here’s the real point, I think. Consumers are overwhelmed by the amount of info on packaging, and they do want retailers to act as their editors. Fix this firmly in your minds: shoppers are time pressed and don’t like to shop. That is where brand becomes so important. As consumers learn to trust the retailers’ opinions, they make their choice on where to shop, regardless of what they’re shopping for. When retailers act like manufacturers’ outlets, shoppers have no incentive to choose that retailer’s store.MNB
reported last week that Christian Haub, executive chairman of the Great Atlantic & Pacific Tea Co. (A&P), isn’t satisfied with his company’s expected acquisition of Pathmark Stores.
In various interviews, Haub has been quoted as saying that he envisions Pathmark as the company’s price-value format, and that he plans to look at other possible acquisition targets 18 months after the Pathmark deal has been concluded – though he doesn’t say what companies she might be interested in.
I commented: Yeah, that’s right…share the joy.
I’ve said it before and I’ll say it again. There must be few more scary and sobering words to hear when getting to work in the morning than, “A&P has bought our company.” The folks at Pathmark have had time to get used to the idea, though from what I hear there is still a lot of fear and loathing down in Carteret, NJ.
user responded:A few things – first, I love reading your insights every morning, it’s a great way to start my day. Second, you have many more years of experience on the topic of retailing than I, so I look to you as a wise sage of retailing analysis. That being said:
What’s your deal with A&P?
I understand some of your hostility toward the brand – I can remember in my youth (in the 80s), stocking up at an A&P while on vacation, and getting a serious case of the “Heebie Jeebies” – I wanted nothing more than hand sanitizer after shopping in a monster of a store with a distinct 70s color scheme of yellow, brown and orange.
Even as recently as last year I held my perception of a dirty, outdated brand when I relocated to northern New Jersey. The only option Google gave me for local supermarkets were a Shop Rite and an A&P. Warily, I ventured to the A&P, and found it was one of their “Fresh” formats. Gone were my previous perceptions when I saw hardwood floors, a generous wine and beer section, great customer service, self-checkouts and quality foods at a moderate price.
OK, so I know it’s not a Wegmans. But A&P has given me products that have made unforgettable meals, and I use the money I save to buy my $4 cappuccinos at Starbucks.
It may be that I’m a little tough on A&P, and that I should think twice before unleashing my criticism on the company. The problem is that I’ve gotten tired of hearing the company’s excuses for lack of productivity (“it rained a lot,” “the weather was cold,” “the dog ate my homework”), which seemed to populate every quarterly press release.
Despite what you say, I’m not all that smart. I probably have more opinions than brains, which isn’t always a good thing. But I know a lot of really smart people with extraordinary experience who feel the same way I do.
For example, one MNB
user responded to last week’s story by writing:Christian Haub will have to look for additional acquisitions 18 months after the Pathmark acquisition. Pathmark will be on life support by that time.
And another MNB
user wrote:A&P took Farmer Jacks in Detroit, at one time not to long ago, one of the best and profitable divisions they had, and ran it into the ground. Farmer Jacks owned the Detroit market, taking shares away from Meijer and Kroger.
Cynicism reigns, I’m afraid. Not pretty, but there it is.
Finally, in Friday’s MNB
Sports Desk report, we made a little joke about Thursday night’s game, saying: No dogs were killed during the game. As far as we know.
To which one MNB
user responded:Shame on you with your "no dogs were killed" comment. You have more class than that.
It was a cheap joke. Sometimes, I can't help myself.
user wrote:Hitting on Michael Vick is getting to be a tired old joke.
I’ll admit to it being a cheap joke. But tired? Don’t think so.
As far as I’m concerned, Michael Vick can't be smacked around enough.