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In 1988 a young man named Sandy Goldman had a notion to put TV screens in supermarkets. His concept, which he called Checkout Channel, captured the imagination of many other entrepreneurs and companies, from the likes of Ted Turner and NBC to at least 10 startup ventures that have since come and gone. Over the past 18 years, Goldman's original idea, in dozens of different configurations, has lived in what Hollywood calls "development purgatory." It has become the epitome of the idea that doesn't quite work, but is too good to kill.
But now, finally, we have reached the moment of truth for in-store television. Spearheaded by the commercialization and spread of two very different products based on the technology, by a variety of well-financed companies, and by test results that have convinced leading retailers to roll out full-fledged systems, in-store TV is ready for widespread release. The next two to three years will produce either the successful denouement of a long gestation period, or the last few nails in an overstuffed coffin.
Point of sale or not point of sale: That is the question. The current breakthrough in in-store TV products represents the clarification of a nagging issue: Is in-store TV a point-of-sale medium designed to sell more products in this store right now, or is it a medium that delivers an audience of women shoppers 18 to 49 years old, who are a critical target audience? The answer, as developed independently by a variety of companies, is both, but rendered in the form of two very different products.
Sell it here, now
The first is in-store TV that moves specific product with immediacy. This already widely established in-store TV system consists of monitors placed strategically in key areas where shoppers tend to linger, such as the deli, the pharmacy, and the produce and meat departments. These monitors show ads for items available in the store right now, and often offer savings on those items today.
The objective of this system is clear: Find shoppers where they hang out; then use sight, motion, and (sometimes) sound to lure them in to a specific product message; then offer the savings intended to close the sale here and now.
Results of such programs seem to vary greatly from store to store, from chain to chain, from category to category, and from in-store location to in-store location, however. Of particular concern is under what circumstances shoppers will slow down to watch. Significant evidence suggests that consumers will watch ads when they're already stuck -- for example, waiting in line at the deli or pharmacy. But evidence also indicates they'll tend not to stop, or even to slow down, at other points in the shopping trip. Thus, while the initial signs look good, the case is not yet ironclad, and best practices in using the medium for this purpose are far from self-evident.
One critical issue is cost. While the expense of screens, servers, and distribution (via broadband or satellite) has declined considerably, the investment required to build a system is still substantial, and payout for the retailers, the participating manufacturers/advertisers, and the sponsoring third-party media company is promising, but not assured.
Worth the wait
The second in-store TV product idea is quite different, with radically different objectives. This system physically is more like Goldman's original Checkout Channel concept. It consists of monitors at the checkstand that provide full motion and sound programming to consumers while they wait in line. This general-interest programming is interspersed with advertising. The purpose of this in-store TV system is threefold: It provides the retailers using it with a perception that waiting time in the lines are shorter than they actually are, it provides the retailers with an ongoing revenue stream, and it provides local advertisers with a cost-effective way to reach a key demographic: women age 18 to 49, with kids.
This system has also delivered results have varied tremendously, this time in direct relationship to the local sales efforts developed by the media company partner involved. Specifically, in multiple tests, consumers profess to like the idea of watching TV while they wait and, more importantly, to think the wait time is shorter, even if it has actually increased.
And retailers have done a good job negotiating good revenue-sharing deals with the third-party companies involved. These third parties, however, have been inconsistent in the marketplace, with some delivering significant advertising to the systems and others falling short of promised goals.
Finally, cost is an issue with this version as well. The same lower-cost technology trends affecting the first version have helped this type of system, too, but overall costs remain significant.
Ironically, the one place where there's significant synergy between the two systems is in the installation. The two can seem totally distinct in the marketplace, but share significant back-room and head-end hardware.
So what should a retailer do? At this point, grocers need to get experience with both of these products, and they need to do it soon, or they'll be left behind. My recommendations for making in-store TV work for you are as follows:
--Test both products separately. Be sure that you're asking each product to do only what it's intended to do. Expecting TVs at the checkstand to sell more products in the store is just foolish, for instance, so test both products, and evaluate them against the correct, distinct objectives.
--Test both products together. Save money by piggybacking infrastructure -- and expect the attendant savings to show up in better deals with your third-party suppliers. Use one company for both products, or ask two companies to collaborate, but get both tests in the marketplace simultaneously.
--Use the medium for your own purposes. Use in-aisle TV to boost private label sales and to build traffic to peripheral departments, for example. And use TV at the checkstand to drive traffic to other ventures tied to your company, such as gas stations or Internet home delivery. In this way you'll benefit from the free marketing and, more importantly, you'll be able to evaluate these media as an end user, not just as a reviewer of your third-party supplier's reports to others.
--Negotiate aggressively. There are a variety of suppliers in the marketplace, so you have real leverage in negotiating a good deal for yourself.
--Most crucially of all, do it now, but evaluate the results thoroughly. The time to test is now, but the time to expand is when you're convinced that these programs are really delivering against the specific objectives you've set for them.
I'm totally confident that if you follow the five steps above, you have a pretty good chance of improving your business using in-store TV, and you'll be virtually certain to have answered for yourself a question that Sandy Goldman first asked almost 20 years ago, and which has stuck in many people's minds ever since.