Measuring in-store ad effectiveness
Despite the rise of e-commerce, 80% of purchases still happen in stores. And retailers produce a lot of in-store marketing with big budgets to run campaigns and generate revenues. However, measuring the effectiveness of in-store marketing has always been challenging. And, with the rise of e-commerce alongside a thirst for attribution and an impending squeeze on brick-and-mortar retail, it’s never been more important to justify the ROI on in-store campaigns. So, how can you measure the effectiveness of in-store advertising?
Generally, retailers can measure the effectiveness of in-store advertising campaigns by comparing product sales data during campaign periods against non-campaign periods. This demonstrates the direct impact between marketing campaigns and sales of the promoted products. In addition, some retailers and brands run qualitative analyses with shoppers as they leave stores to test if they noticed the adverts.
While these measures provide a general indication of in-store advertising performance, they don’t tell the whole story. In addition, it’s difficult for marketers to use this information to make informed changes to the creative, placements and types of activations that will ensure they continue to perform well in future.
The need to measure in-store marketing effectiveness.
Brick-and-mortar retail stores remain a critical part of the marketing mix. However, as the cost of operating stores on the high street grows ever higher, retailers are under increasing pressure to maximise effectiveness and “sweat the assets” they have – in this case, stores. However, as you can only improve what you can measure, it questions how you measure your stores’ performance.
While online and e-commerce platforms make it easy to track and measure customer behaviour, the same cannot be said for brick-and-mortar retail. Marketers at all levels would prefer complete attribution like that which is provided via online and digital channels, but it cannot always be the case. Not only do more retail purchases happen in-store, but the role of stores is increasingly changing, and you have to consider their role in the Omni-channel mix as well. Approximately 30% of sales online are completed in stores, either through purchase or click-and-collect.
You are ultimately left with two options; either be comfortable in obscurity or explore methods of measuring the unmeasurable.
While it isn’t an exact science, we decided to explore the latter.
Objectives of in-store advertising.
Firstly, we must consider the role of in-store advertising within the marketing mix.
In-store advertising aims to either generate sales or increase brand awareness. The in-store advertising could be part of a larger campaign with similar goals. In this situation, in-store advertising should remind customers of the campaign they have seen via other channels at the point of purchase to generate sales. The campaign may promote a specific product or special offer. Given the range of products that brands and retailers typically produce, an in-store campaign will rarely promote the whole brand.
Therefore, while in-store marketing does have a significant impact on brand awareness, it’s perhaps a conversation for another article. For now, we will focus on measuring the immediate return on investment of in-store marketing campaigns. Thus, we’ll focus on revenues generated by in-store advertising.
Measuring in-store marketing campaigns.
While advertising in brick-and-mortar stores is ever-present, it’s usually a myriad of overlapping campaigns. Depending on the size of the store and type of company, multiple campaigns could run simultaneously with different start and end points, promoting different products in each store. In addition, campaigns are rarely operated in isolation. Buyers could see an advert online, on TV or on the radio before seeking it out in the store. While in-store advertising may play a role in the product’s sale, it’s difficult to derive its impact from looking at the standard data sets.
Therefore, we cannot simply measure revenue generated by the product; we need to consider it against advertising campaign data.
A simple measure of campaign effectiveness is comparing campaign-related product sales during campaign periods to non-campaign periods.
This can be very effective for generating a rough estimate of in-store advertising effectiveness and one to demonstrate to senior management.
You simply need to know the following:
the campaign-related products,
the stores your campaign is running in,
the start and end dates of the campaign,
the cost of materials and execution,
and the product sales data.
Then you can simply compare sales from your Point Of Sale (POS) system for products during campaign periods using data in your Campaign Management System. You may have to review contracts or budgetary information to gather your costs, but it’s reasonably straightforward to bring together.
Alternatively, you could use an in-store marketing platform like Colateral. Colateral manages in-store marketing campaigns from campaign planning through execution to analysis. It maintains full information about your campaigns, the products you’re promoting, the campaign dates, and even the cost of materials. And it presents everything in a report for you to share with your Head of Marketing (see below). So, you simply need to review product sales data during campaign periods.