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PMMAO 2008 Review Retail Media : Hooking the shopper

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The red-hot modern retail, though accounts for only  about four percent of the $200-billion domestic retail industry, it is poised for a big leap, given its 25-30 percent annual growth rate. If a KPMG report is any indication, it is bound to cross $23 billion by the end of the decade. In tandem with its all positive offshoots from creating jobs to quality and convenient shopping environment, its long strides of growth have also thrown up a new vista for marketers to promote their products and services in these sprawling retail spaces.

Though looking like an extension of the age-old out-of-home media at present, the retail media is fast growing to be an independent media, because the advertising that happens inside any retail environment is invariably different from static out-of-home media vehicles. Advertisers and marketers, who now use digital screens which are also known as digital signages or posters, inside the retail environments are all set to make better use of the space by broaching new ideas, tools, models and thereby netting in higher share of the ad industry.

The domestic retail media sector has two types of players. On the one hand are the retail players themselves like the Kishore Biyani-owned Future Group which has set up a separate arm for this named Future Media to tap into this fast growing media vehicle as also to take care of its own brand promotions at its various retail verticals. Reliance Retail is another player which puts up campaigns inside its stores for promotions.

The second type of players are the specialised retail media agencies like Digital Signage Networks (DSN), OOH Media, Tag Media, Enhance India, Live Media, and View 24*7 which link marketers with retail property owners. Apart from Future Group and Reliance Retail, all other major retailers have tied up with either of these specialised agencies to mount campaigns inside stores.

Digital Signage handles Vishal MegaMart while Tag Media takes care of Spencer’s Retail.  Subhiksha has signed up vJive Networks, while Shoppers’ Stop has teamed up with OOH Media. Similarly, Oxford, Trent and Globus and Westside are handled by OOH Media. Tag Media does advertising and promotions for Trinethra and Fabmall outlets.

Notwithstanding these fast development, the retail advertising as a genre is still in its embryonic stage in the country, considering the fact that the very concept of modern trade is quite new in this market. But having seen retailers opening up their space for marketers, few can doubt about its scope and potential. According to the Mumbai-based View 24*7 president  Nayan Bheda, “if total advertising market is over Rs 17,000 crore, out-of-home advertising would be just about five percent of it and retail advertising, which mainly constitutes digital signages, will be under one percent.” View 24*7 is the OOH division from Intellivisions that has recently come up with OOH TV channel under the brand name of Sellivision, and it has tied up with nearly 300 restaurants and retail stores for putting up their display screens which would air its OOH TV channel.

Though it is too early to quantify the retail advertising or the digital signages market at this stage, according to the players, they foresee a huge growth ahead. “Retail media will be several hundred crores probably in the next two-three years and it is going to be one of the largest sectors of advertising,” says the Digital Signage chief executive Gourang Shah. His agency is one of the pioneers in the digital posters space in public areas like cafes, malls and retail areas. DSN has partnered with some of the leading brands like Café Coffee Day,

McDonalds, Lifestyle, Vishal Mega Mart, Arvind Brands, DLF Malls, to name a few.

Another major player is the Ishan Raina-promoted OOH Media that has already made its presence felt in almost all retail formats including malls, in-stores, restaurants, bookstores, cafes and multiplexes. Besides these commercial spaces, this Mumbai-based agency has also put up digital screens in corporate parks and residential societies. Its head Ishan Raina is considered as  one of the leaders in the digital signages market owning more than 4,000 screens in retail oriented locations such as restaurants, malls, bookstores, cafes, in-stores in key cities. Some of the major clients of OOH Media are Shoppers’ Stop, Westside, Trent, Oxford and Globus.

“The OOH television,  also known as the digital signage market, is still in its infancy, accounting for less than 0.5 percent of the ad industry. But I think this will move to about 1.5 percent in 2008, and reach five percent in 2008,” Raina looks confident.

These agencies vouch that there is a growing penchant with marketers to use this newly-evolving platform. Its rising popularity can be easily gauged from the success of Future Media which has around 200 advertisers as its clients in a span of less than a year.

Future Media chief executive Partho Dasgupta feels that in-store advertising has been there in the industry since the time stores opened. With organised retailing, the ad industry is shaping into an organised medium and now we are seeing money coming in from both mainline marketing and BTL budgets. Pointing out the developments in this space, Dasgupta says, “newer media forms like TV, LED screens, multi-scrollers are being launched. We see the medium to be a compulsive part of media plans in the coming years. The future will also see new technology, newer from of content, metrics and more and more organised  players.”

He goes onto add that “an exciting fact is that nearly 55 percent of his clients are brands that do not gain from these retail spaces. These clients include those from the financial, media and entertainment, and automobile sectors. They advertise with us as they seek to reach out to relevant audiences,” he notes.

The retail advertising medium is owned by two types of players-the properties that offer retail spaces on rent and advertisers who market their products and services using these properties. Again, retailers themselves either promote their goods or the goods of their clients. But the professional agencies that facilitate this do enter into contracts with the players on both the sides. DSN has tied-ups with leading names like Café Coffe Day, McDonald’s, Western Railway, Vishal MegaMart and Lifestyle on the one side and SBI, LIC, Sony channels, HDFC and HSBC as advertisers.

Another major player is the Rajan Mehta-promoted Live Media, which is present in over 1,000 locations with more than 2,000 screens. “The retail advertising industry is growing well which could be seen from the ubiquitous screens in various locations. Already there are around eight players in this space and each has its own strategy. Some are focusing on malls, some on elevator lobbies while others on restaurants etc.”

On the issues facing this nascent sector, he says monitoring and evaluation are some of the major concerns today. “Multiple and fragmented supply chain is a major issue in this medium,” says Mehta. Other players also back this concern and feel that it has become a hurdle for clients in knowing the efficacy of the medium. Monitoring and evaluation are not just the concerns, as some feel. But they have become major challenges, causing apprehension among the advertisers. “There is difficulty in convincing marketers  to use this medium due to its recent birth in the industry,” says Bheda of View 24*7.

“Managing the depth and penetration levels that clients are leveraging is a challenge in this market given the fact that we have so many towns and cities that need proper servicing on time,” feels Enhance India country head Kaushik Chakravorty. Enhance India, launched as one of the specialist affiliated units of the Starcom MediaVest Group in June 2006, looks after retail and merchandising activities of various brands and work towards providing them marketing solutions in the retail environment. In the retail and visual merchandising space, Enhance has clients like Reliance Money, Nerolac Paints, Aircel, Essar Telecom Retail that operates The Mobile Store, Dainik Jagran, Samsung, and Tata Green, to name a few.

Notwithstanding the challenges and concerns, retail advertising space has also witnessed many innovative trends. Networking of digital signages, blue-casting (a way deliver a branded ad content to Bluetooth-enable mobile phones around poster sites, retail locations etc) SIM-bedding (is a technique wherein a SIM card is planted in the LED display panel at a retail to update its new offers or subscription schemes) are some of the models that have added flavour to this models that  upcoming medium.  Since this is this upcoming  final touch-point for communicating with the consumer, the real challenge lies in utilising this medium creatively and innovatively, whether it is a commercial on television set or a wall branding.

Even though advertisers and marketers have just woken up to the potentials of the new medium, in a contrast to the still-guarded openness among retailers to make use of it fully, the sector as a whole has been reporting significant growth rate. “Industry is on an average growing on 10-15 percent annually. There are different clients who are using the retail and merchandising route as a part of the experiential difference that customers are demanding in the evolving retail environment in the country today”, points out Chakravorty of Enhance.

And the bottomlines are undoubtedly the huge opportunity cut open to marketers and the upward moving growth curve. But all agree to the urgent need of evolving a measurement tool for assessing the efficacy of the medium which still is fragmented to a large extent. Hence, there could be no specific data made possible for the particular medium in the fifth edition of the Pitch AdOutlook. Taking note of the biggies joining the bandwagon of retail advertising, one thing is crystal clear that the sector would fast catch up with the conventional advertising medium and would create a new stand-alone domain, independent of the regular out-of-home advertising.

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Neeta Nair

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