ALONGSIDE the multitude flocking to empty their wallets in any shopping mall, supermarket or hypermarket, there is another queue of people lining up. Marketers of every hue and colour — banks, credit card companies, cars, airlines, you name it — are trying to grab the opportunity to interact closely with their target audience. Be it co-branding activities with retailers, the selling of wall space within outlets, signages, end-of-aisle spaces, carry bags, trolleys or even in-store TV — modern trade is acting as the medium for brands to connect directly with consumers.
Retailers aren’t complaining — it’s a revenue stream that is fast becoming a steady pipeline. At Shoppers’ Stop, there is a separate team at the headquarters with one key person at the store handling in-store marketing initiatives. “It’s an agent, not a driver of business for us. But even as we have grown 300% in the last five years, this business has grown around 600% in the same time frame,” says Govind Shrikhande, CEO, Shoppers’ Stop. Similarly, at Pantaloon, there is an in-house team of around 18-20 people headed by Sanjeev Agrawal, head – marketing, Pantaloon, that liaises with advertisers as well as brands. And it’s not just the brands which are retailed within Pantaloon formats that advertise — even airlines, credit cards and banks are undertaking on-ground activation initiatives. “By 2010, we estimate revenues from in-store selling to touch Rs 500 crore,” reveals Agrawal.
For retailers, this means the formation of a regular revenue pipeline; for brands it serves as a conduit to directly interact with the customers. “There is a growing realisation that brands have to be built in a retail environment, and therefore brands undertake activation initiatives to engage customers,” says Deepak Jayaram, director, Dmart, a retail specialist unit of media specialist GroupM. Jayaram believes that retail will eventually become an important medium, helping expand the advertising pie. “The shift could be from out-ofhome to retailing. Then, slowly, the medium will start influencing local press, radio and even cable TV within a specific geography,” explains Jayaram.
“With close to 2 million people coming to our formats every week, we can give marketers various avenues to tap the potential,” says Agrawal. He adds the idea is to generate profits by maximising the retail space as well. “Within an outlet, there are many opportunities like signages, end-of-the-aisle
promotions, wall space and even trolley stickers which brands are looking to take up,” he says. “It’s about space selling or space value enhancement,” says Shrikhande, adding that in any category, consumers have no restriction on the choice of brands. “So if at that time a brand can connect with the consumer, it’s more likely to hit bull’seye. That’s what modern trade allows brands to do.” Similarly, Barista Coffee Company understands the potential of its outlets across the country.
A Space Odyssey
“With 1.2 million walk-ins a month and a target audience largely in the 19-30 years category, there are many brands that are looking to form long-term and short-term promotion-led associations with us,” says Partha Duttagupta, CEO, Barista Coffee Company. Citing the example of Barista’s alliance with Hutch, he says that the service provider has its advertisement on the wall of the outlets. “For Hutch it is communication with the right target audience. That’s why they have advertisements along with valueadds like charging outlets and kiosks. For us, it’s about providing value-add to our customers,” he says. Again, the Sound of Barista radio has been rechristened Barista Worldspace — in alliance with the satellite radio station. “In such alliances, we get a fixed sum plus the number of outlets in which the brand will undertake promotional activities,” Duttagupta explains.
Retail spaces are being increasingly utilised to undertake short-term activities like launches and co-promotions. Arvind Mediretta, head – marketing, Yum Restaurants, says that in all tie-ups, care is taken to ensure that there is synergy between the two brands.
“Tie-ups like the KFC deal with Nerolac Paints to promote the latter’s product with Disney characters within KFC outlets have definite synergies. Similarly, there are television programmes looking to create buzz by conducting activities within our outlets,” he says. Retailers, however, are clear that any co-promotion activity cannot be at the cost of their customers. “They should be non-intrusive and should add to the consumer’s shopping experience,” Duttagupta insists.
While everyone seems to accept that onground activation is here to stay, the jury is divided over the latest innovation in at-themall communication — in-store TV. Retailers like Spencer, Shoppers’ Stop, Barista and Pantaloon are all evaluating in-store TV, and it’s taken even international observers of Indian retail by surprise. “It is surprising that in-store TV is picking up in India, while it’s still a very recent phenomenon even in a market like the UK,” says Tim Sleep, Ernst & Young head of retailing, UK. Sleep attributes the rise to the low cost of technology and the mushrooming of multi-brand outlets, where the potential of in-store TV is bigger than in single brand retail outlets. Retailers, for their part, believe that in-store TV will compliment on-ground activities like copromotions, wall signages, trolley stickers and carry bag stickers. “Primarily, the medium will be utilised to drive promotions for brands within the outlets. But even brands which are not retailed at the store but are targeting a similar audience profile will also be given airtime to promote their products,” explains Shrikhande.
While there’s no argument over the potential of on-ground retail initiatives among marketers, the pros and cons of instore TV are still being debated. To start with, content on a dedicated channel has to be customised. Unlike watching television or movies, which is ‘captive’, retailers have to contend with a target audience that is constantly moving across the store. Therefore, attention spans will not be greater than 2-3 minutes. Barista’s Duttagupta says that non-advertising content could range from running Charlie Chaplin movies to coffee education clips. Similarly Shoppers’ Stop is looking at content ranging from home makeover advice, personal care tips and recipe shows as part of the programming. “It has to be short and sweet,” says Shrikhande. Manish Shukla, founder, Retailscape, a design and consultancy firm, adds, “Retailers have to keep in mind that their content will be competing with content available with over 200 television channels. Customisation is critical.” Jayaram of Dmart says that retailers will have to ensure the right tweaking of the message. “Programming will have to be divided into the television equivalent of day parts, where programming is targeted towards specific segments of the customer base,” he says. Another question up in the air is, what happens when retailers have store brands that compete with those of marketers. And lastly there is the problem of dividing airtime. While some retailers believe that the commercial airtime can be divided into advertising for in-store brands as well as third-party advertising, some are focusing more on selling airtime to brands which are present on their retail shelves.
Regardless of whether in-store TV takes off or not, there is consensus that onground activation is here to stay and will, with time, account for larger and larger slice of the advertising pie.
Retailers aren’t complaining — it’s a revenue stream that is fast becoming a steady pipeline. At Shoppers’ Stop, there is a separate team at the headquarters with one key person at the store handling in-store marketing initiatives. “It’s an agent, not a driver of business for us. But even as we have grown 300% in the last five years, this business has grown around 600% in the same time frame,” says Govind Shrikhande, CEO, Shoppers’ Stop. Similarly, at Pantaloon, there is an in-house team of around 18-20 people headed by Sanjeev Agrawal, head – marketing, Pantaloon, that liaises with advertisers as well as brands. And it’s not just the brands which are retailed within Pantaloon formats that advertise — even airlines, credit cards and banks are undertaking on-ground activation initiatives. “By 2010, we estimate revenues from in-store selling to touch Rs 500 crore,” reveals Agrawal.
For retailers, this means the formation of a regular revenue pipeline; for brands it serves as a conduit to directly interact with the customers. “There is a growing realisation that brands have to be built in a retail environment, and therefore brands undertake activation initiatives to engage customers,” says Deepak Jayaram, director, Dmart, a retail specialist unit of media specialist GroupM. Jayaram believes that retail will eventually become an important medium, helping expand the advertising pie. “The shift could be from out-ofhome to retailing. Then, slowly, the medium will start influencing local press, radio and even cable TV within a specific geography,” explains Jayaram.
“With close to 2 million people coming to our formats every week, we can give marketers various avenues to tap the potential,” says Agrawal. He adds the idea is to generate profits by maximising the retail space as well. “Within an outlet, there are many opportunities like signages, end-of-the-aisle
promotions, wall space and even trolley stickers which brands are looking to take up,” he says. “It’s about space selling or space value enhancement,” says Shrikhande, adding that in any category, consumers have no restriction on the choice of brands. “So if at that time a brand can connect with the consumer, it’s more likely to hit bull’seye. That’s what modern trade allows brands to do.” Similarly, Barista Coffee Company understands the potential of its outlets across the country.
A Space Odyssey
“With 1.2 million walk-ins a month and a target audience largely in the 19-30 years category, there are many brands that are looking to form long-term and short-term promotion-led associations with us,” says Partha Duttagupta, CEO, Barista Coffee Company. Citing the example of Barista’s alliance with Hutch, he says that the service provider has its advertisement on the wall of the outlets. “For Hutch it is communication with the right target audience. That’s why they have advertisements along with valueadds like charging outlets and kiosks. For us, it’s about providing value-add to our customers,” he says. Again, the Sound of Barista radio has been rechristened Barista Worldspace — in alliance with the satellite radio station. “In such alliances, we get a fixed sum plus the number of outlets in which the brand will undertake promotional activities,” Duttagupta explains.
Retail spaces are being increasingly utilised to undertake short-term activities like launches and co-promotions. Arvind Mediretta, head – marketing, Yum Restaurants, says that in all tie-ups, care is taken to ensure that there is synergy between the two brands.
“Tie-ups like the KFC deal with Nerolac Paints to promote the latter’s product with Disney characters within KFC outlets have definite synergies. Similarly, there are television programmes looking to create buzz by conducting activities within our outlets,” he says. Retailers, however, are clear that any co-promotion activity cannot be at the cost of their customers. “They should be non-intrusive and should add to the consumer’s shopping experience,” Duttagupta insists.
While everyone seems to accept that onground activation is here to stay, the jury is divided over the latest innovation in at-themall communication — in-store TV. Retailers like Spencer, Shoppers’ Stop, Barista and Pantaloon are all evaluating in-store TV, and it’s taken even international observers of Indian retail by surprise. “It is surprising that in-store TV is picking up in India, while it’s still a very recent phenomenon even in a market like the UK,” says Tim Sleep, Ernst & Young head of retailing, UK. Sleep attributes the rise to the low cost of technology and the mushrooming of multi-brand outlets, where the potential of in-store TV is bigger than in single brand retail outlets. Retailers, for their part, believe that in-store TV will compliment on-ground activities like copromotions, wall signages, trolley stickers and carry bag stickers. “Primarily, the medium will be utilised to drive promotions for brands within the outlets. But even brands which are not retailed at the store but are targeting a similar audience profile will also be given airtime to promote their products,” explains Shrikhande.
While there’s no argument over the potential of on-ground retail initiatives among marketers, the pros and cons of instore TV are still being debated. To start with, content on a dedicated channel has to be customised. Unlike watching television or movies, which is ‘captive’, retailers have to contend with a target audience that is constantly moving across the store. Therefore, attention spans will not be greater than 2-3 minutes. Barista’s Duttagupta says that non-advertising content could range from running Charlie Chaplin movies to coffee education clips. Similarly Shoppers’ Stop is looking at content ranging from home makeover advice, personal care tips and recipe shows as part of the programming. “It has to be short and sweet,” says Shrikhande. Manish Shukla, founder, Retailscape, a design and consultancy firm, adds, “Retailers have to keep in mind that their content will be competing with content available with over 200 television channels. Customisation is critical.” Jayaram of Dmart says that retailers will have to ensure the right tweaking of the message. “Programming will have to be divided into the television equivalent of day parts, where programming is targeted towards specific segments of the customer base,” he says. Another question up in the air is, what happens when retailers have store brands that compete with those of marketers. And lastly there is the problem of dividing airtime. While some retailers believe that the commercial airtime can be divided into advertising for in-store brands as well as third-party advertising, some are focusing more on selling airtime to brands which are present on their retail shelves.
Regardless of whether in-store TV takes off or not, there is consensus that onground activation is here to stay and will, with time, account for larger and larger slice of the advertising pie.