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Cause and Effectiveness

"Can you tell me what sales lift I'll get by placing shelf signs next to my product?"

The Institute has fielded questions like this on a regular basis since launching in 2003. Sister publication P-O-P Times has been hearing them since 1987. People, in general, need certainty in their lives, and marketers in particular crave statistics that will inform their decisions -- not to mention help their programs gain approval from above. So they relentlessly seek industry benchmarks, estimates, averages and percentages that will turn their hunches into hard fact.

Of course, the real answer to the above question (and all those like it) is no -- if not an emphatic one then at least a fairly definitive one. There are far too many determining factors to accommodate industry-wide averages for effectiveness. For starters, are you selling Macintosh Apples or Apple eMacs? Also consider brand awareness, channel, seasonality, competitive activity, rationality, shopper demographics -- heck, find out if it's going to snow the week after your shelf signs go up. After that, decide what kind of communication you'll be using on the sign.

Then, maybe, you can try asking that question again. But remember that the existence of an average almost assuredly implies above- and below-average performance: if shelf signs in your universe produce an average 20% sales lift, that suggests somebody's poor results are balancing out the other guy's strong gains.

That, however, is one of the exciting things about the Pioneering Research for an In-Store Metric (P.R.I.S.M.) project the Institute announced last month at the In-Store Marketing Expo. The ability to measure in-store traffic at the category level will greatly aid statistic-starved marketers both directly and indirectly:

  • Directly by delivering reliable traffic numbers: All marketers will know the potential reach that a shelf sign in a specific location at a particular store will have. That's a huge development for in-store marketing, which has never had a market-wide metric of evaluation akin to those employed in mass media advertising.
     
  • Indirectly by paving the way for effectiveness analysis: Knowing how many consumers may be reached with an in-store program is the first step. Next will be developing a method for measuring compliance, to determine how many of those shelf signs were placed in stores. That information can then be analyzed along with sales data to determine effectiveness.

It will take a lot more work to get to that point, and the Institute is collaborating now with members of the In-Store Metrics Consortium on the next phase of development for the P.R.I.S.M. project.

Ultimately, there still isn't going to be a simple, catch-all answer to that initial question. Industry-wide averages will always have limited accuracy because of the above-mentioned variables -- which is why determining true effectiveness will be the internal responsibility of each product manufacturer and retailer. There probably will be general -- and questionable -- industry statistics established for those marketers who simply must have them. But at least they'll be a little more accurate, too.

But in addition to being a vital step in the drive toward measuring effectiveness (a point that received much attention in media coverage of the announcement), the P.R.I.S.M project will provide a new way for marketers to evaluate the store.

That, in itself, should answer a lot of the questions keeping marketers up at night.

Peter Breen
Managing Director, Content
In-Store Marketing Institute



Published: October 2006

Source: In-Store Marketing Institute

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