The outdoor industry is in great shape. But among the many good-news stories to have emerged from the medium, it is the growth of the retail sector that stands out.
Retail's share of the outdoor market is about 11%, which equates to £106m, according to the Outdoor Advertising Association. With evidence suggesting that marketers are ploughing more money than ever into shopping environments, retail appears to be helping to sustain outdoor's growth.
Retail in this context has a specific meaning. Many poster panels outside shops, for example a bus shelter ad on a town high street, would fall under the separate classification of roadside even if it is just a few feet away from a high-street chain. A station concourse or petrol forecourt, by contrast, is generally considered retail. The defining factor is that these sites are places consumers choose to visit. 'The heartland of retail is malls, retail parks and supermarkets,' says Titan Advertising managing director Andy Moug, whose company works with Morrisons, Asda and shopping centres including Bluewater, The Bullring and Lakeside. 'It is essentially a destination medium.'
The word 'destination' is key, adds Moug. 'Media such as TV are fighting audience fragmentation. But we are where people have to or want to go. Whether you are dealing with consumers doing their weekly shop or hanging out at malls, this is the audience advertisers have to reach. And you don't get the waste associated with roadside.'
Rachael Wallis, head of JCDecaux's Destination Tesco operation, which matches brands to Tesco stores based on customer demographics, points out that retail outdoor space is appealing to more brands than just those stocked in-store. 'Retail is both the last chance to influence consumers before they make a purchasing decision and an opportunity to reach an audience with a high propensity to buy or do other things,' she says. 'For example, family-car consumers index highly against Tesco shoppers so there is an opportunity for brands such as Citroen and Toyota.' Ford has already used ads outside Tesco stores, as have other non-stocked brands such as British Gas.
The primary consideration for retail outdoor ads is which environment will work best for the brand. Then, the appropriate section of the consumer journey must be identified before a decision is made between brand-focused ads or promotion-led messages. 'People's mindset and movements are very different in a mall compared with a supermarket,' says Moug. 'Malls are leisure environments, so are useful for reaching people with dwell-time or in a relaxed frame of mind. The shops there also appeal more to luxury brands than FMCG.' By contrast, supermarkets are places where consumers aim to spend as little time as possible and do not tend to hover.
Media Planning Group's Simon Jenkins shares the view that retail outdoor is important because of its premium audience. 'Getting all Waitrose shoppers in one place is a no-brainer when you consider how fragmented TV audiences are.' He argues that the retail medium is particularly useful for smaller brands. 'If a brand does not have the budget for a big TV launch or the clout to get eye-level shelf space, retail media can play a role in increasing visibility.' Jenkins also supports an emphasis on shopping centres. 'There are clear benefits for fashion and electrical categories having a presence in malls, particularly around high seasons such as Christmas. They provide a captive audience seeking inspiration right next to the point of sale.'
There is no shortage of format options. Established outdoor players such as Titan, JCDecaux and Clear Channel tend to deal in six-sheet panels around the outside of stores. But there is a growing array of media options in-store, too, with digital screens gaining popularity. Tesco TV, which rolled out to a great fanfare but initially returned disappointing results, is now in the hands of Tesco customer insight partner Dunnhumby and has been rebranded as Tesco Screens. It has been reinvented as a below-the-line platform, and instead of expecting people to congregate at gondola ends to watch TV-style ads, Dunnhumby is running short, simple, single-minded executions that direct customers toward in-store offers or launches. In the case of the launch of Wrigley's Extra Big One, Dunnhumby claims to have delivered a 25% uplift in sales.
This echoes the US approach to in-store digital signage. In Wal-Mart stores, the guiding principle is to think of digital screens as billboards, rather than TV. Indeed, there is a view in the US that branded messages work better than promotions, since the latter method can fall victim to trying to impart too much product information to customers in the time available.
In-store media options also include specialist operators such as Sales Activation Solutions and Redbus Outdoor, whose areas of expertise are trolley media, floor graphics and sampling. Redbus has a presence in Asda, Sainsbury's and Somerfield, delivering messages to 250m shoppers a month via its trolleys. The potential of such ads is huge, according to Redbus Outdoor group sales director Alan Valler. 'They can be promotional or directional,' he says. 'When Nesquik launched Magic Straws, it used trolleys to let people know that the straws could be found on the UHT milk aisle. When you think about the amount of money clients spend on TV launches, the last thing they want is for their product to be delisted because customers can't find it.'
Packages can also be designed around the kind of shopper a client wants to reach. 'Aside from the main weekly shop, there is a big market in so-called distress purchases, for example, when a customer on their way home from work pops into buy milk and can be persuaded to make impulse purchases,' says Valler.
Clear Channel marketing director Pip Hainsworth cites the potential of more traditional outdoor work. She points to the launch of Nestle Munch Bunch Squashums earlier this year, for which 505 panels were placed outside Sainsbury's stores. At branches where the campaign was used, Squashums' share of sales in the children's yoghurt category rose by 107.6%. In control stores, the uplift was 95.9%.
At the same time, Hainsworth is anxious not to overplay retail's role, arguing there are many triggers. 'No one really knows what influences the final choice and it is difficult to isolate key factors. That is why we advocate multiple messages across a range of formats.' She points to a Gillette razor promotion that used TV, roadside and six-sheets outside Sainsbury's stores, and led to a 5.6% uplift compared with control stores.
The tussle between in-store and out-of-store retail may partly explain why media agencies that focus on the outside of shops do not build their proposition entirely around their proximity to point-of-sale. For example, Street Broadcast, a six-sheet contractor, says 85% of its panels are within 500 metres of top retailers, but it places more emphasis on audience than proximity. 'We are in 200 retail parks and have panels around the UK's biggest Tesco,' says Mungo Knott, managing director of sales. 'But the compelling thing about our proposition is the audiences it reaches. The consumers who go into Boots or Next are interesting to a wide range of advertisers.'
The variety of options available should undoubtedly make retail outdoor accessible to a range of advertisers, according to Kinetic's Ivan Clark, who heads the company's Destinations Media Group. 'It is ultimately down to objectives. The high number of consumers that can be delivered by a trolley and floor graphic campaign means that they act as a mobile signpost,' he says. 'But an effective piece of branding by the door of a supermarket can be a final reminder of a campaign that has already been explained in other media.' As an example of the latter, Clark cites a Kinetic campaign outside Tesco for Aunt Bessie's Yorkshire Puddings that was the first to use lenticular panels, which display a constantly-shifting image. As a product that could easily be left off a consumer's shopping list, the point-of-sale prompt, based on insight derived from Tesco Clubcard data, proved effective.
As the segment grows, outdoor operators are constantly seeking alternative ways to reach shoppers. One option is ATM:ad, which delivers messaging via cash machines. Fox Home Entertainment used 146 ATMs at Asda stores to offer discounts on DVDs. The creative work featured snippets of video and used the receipt as a reminder. Starcom Mediavest planned the campaign and account manager Tom Brunner says it was seen by about 3m customers over eight weeks and provided the foundation for a robust push. 'The fact that most ATM users access the machine before going into the store, along with Fox's own consumer insights that the target audience is on the look-out for special offers, and tends to pay by cash, means that we had a perfect fit in terms of targeting and environment.'
The downsides for the outdoor retail sector are familiar concerns. Since retail does not yet fall within out-of-home audience measurement system Postar, it is difficult to back it up with metrics. There are also worries about the burgeoning number of contractors; advertisers and agencies are wary of dealing with too many niche media owners because it can be labour intensive as well as creating issues of compliance.
This may be why some retail outdoor start-ups are struggling to make a mark. After a rapid roll-out of its mall-based digital-screen offering, ScreenFX's shares were suspended as it sought additional funding. Another listed company in the same product arena, Avanti Screenmedia, lost half its market value after revealing that it faced cash-flow problems.
With retailers ever-more aware of their role as media owners, such teething problems should not dent the sector's long-term growth prospects. Advertisers remain keen to target consumers as near to the point of purchase as possible. So as long as it can come up with the right models for clients, the outdoor industry should be one of the main beneficiaries.
CASE STUDY - THE US EXPERIENCE
For major multiples, retail-based media can direct customers to products in-store, and the licensing of rights to contractors creates a fresh revenue stream. However, a report published this summer by retail analyst Information Resources Inc (IRI) suggests that another factor could drive take-up of retail media.
It showed that the number of grocery displays in US stores has dropped by an estimated 10% in the past two years as retailers have restricted activity. It predicted that in-store media will benefit, citing the example of Wal-Mart, which has screens in 3000 stores. According to IRI: 'In-store TV networks, digital signage and trolleys offer new ways to reach consumers and while it is yet to be seen how effective they will be, some will become mainstays.' In a survey by the In-Store Marketing Institute, US marketers said small, digital shelf signs would be most likely to transform in-store marketing.
CASE STUDY - COTE D'OR
Given the importance of price, packaging, retail positioning, product quality, brand and other media, it would be naive to assume sales can ever be directly attributed to a particular format. But marketers can improve the odds by working with superstore sales data, according to JCDecaux's Rachael Wallis.
'At Destination Tesco, we use Clubcard data to ensure clients get the best audience for their brand. For example, we can identify variations in purchasing behaviour between stores. So if a brand wants shoppers who buy more organic produce, or stores where sales of baby-related products are high, we can deliver that. The aim is to be as flexible as possible in the number and location of stores we deliver,' she says.
One example of this was a campaign for Kraft chocolate brand Cote d'Or for which JCDecaux isolated Tesco stores that had a bias toward consumers of finer foods, upmarket shoppers and mainstream shoppers. Following a two-week campaign in 300 branches, sales of Cote d'Or in those with posters were 23% higher than in those without. Significantly, in the eight weeks after the campaign ended, sales remained 23% higher in those stores, suggesting that people had either remembered the ad or already purchased and then repurchased.
CASE STUDY - JCDECAUX
JCDecaux commissioned Lawes Consulting to carry out an ethnographic study of shoppers. The research, published recently, concluded that shoppers are in an optimum state of mind to absorb advertising messages as they arrive and leave supermarkets. Because this area is a relatively brand-free zone, the study found that shoppers take in details and recall campaigns long after the ads come down.
Lawes found that media in the car park and near the supermarket entrance, is consumed in a mid-arousal state with high levels of recall. This makes it ideal for brand building, providing information and promoting offers as well as highlighting new product features.
In-store, Lawes found that shoppers consumed media in a high-arousal state, making it suitable for simpler messages, including offers.
As customers reach the exit and car park, moderate arousal levels were measured again, with high recall for ads. This area of the supermarket would be of particular benefit for non-stocked goods, providing access to the family audience.
Creative work for sectors such as holidays and films worked particularly well in the departure zone because as consumers leave the supermarket, their mindset moves to thinking about the weekend or leisure activities.