Consumer Strategies Report January 2005/Trade Events

At Monday's (January 17, 2005) NRF session, in-store media was discussed as the next-easiest-to-implement phase in the evolution of the ultimate retail experience. But one fact was lost among the national retailers advising us to rush to launch our own networks - the mom and pop retailer isn't in the same position to launch full blown in-store television networks.

For the cost of one flat-panel plasma screen, a 1-5 unit retailer can hire a regular part-timer for a store. However, not being able to afford regular television advertising, deploying an in-store television "network" is an ideal sales-driving solution. It's not completely unreasonable for a small retailer to want to jump on the in-store TV bandwagon. The challenge is how.

The top retail chains suggest retailers start with a plan - including deciding on content, frequency of content rotation, TV type, placement, and delivery (DVD or beaming). We recommend a small retailer's plan initiate with "controlled ambiance" utilizing in-store music instead of TV. A basic strategy to comfort or excite, ambient music is a reliable and low cost way of achieving your goal of an in-store media infrastructure. Embedded in the music content, retailers would include announcements of hourly sale specials and their locations throughout the store.

After successfully deploying an ambient music/messaging media infrastructure in your store, upgrading to digital flat screen TVs will be the logical progression (as opposed to flat panel plasma screens). The key would be to leverage the experiences you gained from the first deployment. Getting content is relatively simple with the assistance of local college media programs, local graphic designers and producers, or even small firms that specialize in production services. With your ambient music still operating, video with no sound in 2-5 minute loops is guaranteed to contribute to sales.

Placement of these heavier TV sets is challenging, particularly in avoiding a disruption of your merchandise displays with the additional wiring (not to mention preventing accidents.) We recommend consulting professional carpenters, electricians, and tech-savvy "geeks" to help you evaluate what's doable in your store(s) and to have them do the installation, so at the very least you may be able to shield yourself from any unforeseen accident liabilities resulting from your network.

Finally, while on the topic of liabilities, talk to your insurer about protecting your network from theft and damage; your electrician about your wiring being able to manage the additional usage; and local authorities to make sure you've got permits, zoning, and hazards covered.

The bottom line is cost. We estimate that for around $3000 (not including content production and potential tech support), a small retailer can launch his own in-store network. According to retailers with full in-store media network infrastructures, an increase of 11% - 60% in sales of featured products is not unusual. And as sales per square foot increase, fresh content will pay for itself.

Disclaimer: The recommendations, commentary and opinions published herein are based on public information sometimes referenced via hyperlinks. Any similarities or likeness to any ideas or commentary from any other sources not referenced is purely coincidental. al berrios & co. cannot control any results occurring from advice obtained from this publication nor any opinion(s) conveyed by any reader of this publication.

(c) 2005. All Rights Reserved. al berrios & company, inc. Published by al berrios & co. This Report may not be reproduced or redistributed in any form without written permission from al berrios & co., subject to penalty.

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