Retail media has quickly become popular because it allows brands to target shoppers in a highly effective and immediate way, right where they’re making purchase decisions. But when you view the designs of current executions, through a shopper psychology lens, there are some very definite dos and don'ts
Examples of Good and Bad Retail Media in Grocery Stores
Good Examples:
1. In-Store Digital Screens with Dynamic Content
Evidence: Digital screens displaying time-sensitive promotions, new product launches, or recipe ideas can lead to a 30% increase in sales for featured products. Tesco's use of digital signage in UK stores resulted in significant uplift in sales for promoted items.
2. Endcap Displays for Seasonal Products
Evidence: Target uses endcap displays for seasonal products like Halloween candy or summer barbecue items. These displays lead to impulse purchases, contributing to a 20-25% sales increase during peak seasons.
3. Personalised Offers via Mobile Apps
Evidence: Kroger’s mobile app integrates with their loyalty program, offering personalised discounts and suggestions based on past purchases. This has driven a 2.5x increase in app-based transactions.
4. QR Codes Linking to Online Recipes
Evidence: Walmart’s use of QR codes on product packaging that link to recipes online increases engagement, with a 15% conversion rate of users adding more items to their carts after scanning.
5. Interactive Product Sampling Stations
Evidence: Costco’s in-store product sampling has a direct correlation with higher purchase rates for sampled items, often increasing sales by 70-90% on the sampling day.
6. Aisle-Based Digital Price Tags
Evidence: Electronic shelf labels (ESLs) allow for real-time price updates and dynamic pricing. Carrefour has seen increased efficiency and a reduction in pricing errors, improving customer trust.
7. Collaborative Brand Promotions
Evidence: Whole Foods often partners with suppliers to create co-branded promotions, leading to an uplift of up to 50% in featured product sales, while also enhancing brand perception.
8. Shelf Talkers Highlighting Nutritional Benefits
Evidence: Sprouts Farmers Market uses shelf talkers to highlight the health benefits of products, which has been shown to increase sales by 18% for health-conscious shoppers.
9. Store Layout Optimisation for Traffic Flow
Evidence: Aldi’s carefully designed store layout encourages efficient shopping paths, leading to higher basket values. This layout is tested and refined based on shopper traffic patterns.
10. Localised Promotions Based on Demographic Data
Evidence: Walgreens tailors promotions to the local customer base, such as offering discounts on ethnic foods in neighbourhoods with higher demand, resulting in more relevant offers and increased sales.
Bad Examples:
1. Cluttered Endcap Displays
Evidence: Overloading endcap displays with too many products can confuse shoppers, leading to decision paralysis and reduced sales. A study found that cluttered displays reduce the likelihood of impulse buys by up to 30%.
2. Non-Contextual Digital Ads
Evidence: Displaying irrelevant digital ads on in-store screens (e.g., promoting winter products during summer) can lead to shopper frustration and ad blindness, decreasing the effectiveness of the promotion.
3. Inconsistent Pricing Between Digital and Shelf Tags
Evidence: When there’s a discrepancy between the price displayed on digital screens and shelf tags, it causes customer dissatisfaction. A survey showed that 42% of shoppers would abandon a purchase if they encounter such discrepancies.
4. Poorly Positioned Product Sampling Stations
Evidence: Placing sampling stations in low-traffic areas can lead to missed opportunities. A study revealed that strategically positioned stations can boost sales by up to 30%, but poorly placed ones might not yield any significant sales increase.
5. Overuse of Pop-up Promotions on Apps
Evidence: Excessive in-app pop-ups for promotions can annoy users, leading to app abandonment. Retailers like Walmart found that a balance of offers is key, with a 15% reduction in app churn after optimising the frequency of pop-ups.
6. Confusing Store Layouts
Evidence: Stores with overly complex layouts can frustrate shoppers, causing them to leave without completing their purchase. A retail study found that shopper frustration can reduce overall sales by 12%.
7. Irrelevant Loyalty Program Offers
Evidence: Generic offers that don't align with shopper preferences can lead to disengagement from loyalty programs. A Nielsen survey found that personalised offers are 3x more effective than generic ones in driving repeat purchases.
8. Non-Eye-Level Product Placement
Evidence: Products placed too high or too low on shelves can go unnoticed. Eye-level product placement has been shown to increase sales by up to 80%, whereas poor placement can decrease visibility and sales.
9. Inadequate Lighting in Key Areas
Evidence: Poor lighting, especially in fresh produce or bakery sections, can make products look unappealing, leading to a 20% drop in sales. Proper lighting is crucial for making products look fresh and attractive.
10. Excessive In-Store Announcements
Evidence: Frequent, loud announcements can create a stressful shopping environment, causing shoppers to leave the store earlier than intended. A study found that reducing announcement frequency by 40% increased the average time spent in the store.
Key Do's and Don'ts When Designing and Deploying Retail Media
Do’s:
1. Targeted and Relevant Content:
Ensure that promotions and advertisements are tailored to the store's demographics and shopper preferences. Personalisation increases engagement and sales.
2. Strategic Placement:
Place media in high-traffic areas and at eye level to maximise visibility and impact. Endcaps, checkout lanes, and entry points are prime locations.
3. Consistency Across Channels:
Maintain consistent pricing and messaging across digital screens, shelf tags, and mobile apps to build trust and avoid shopper confusion.
4. Dynamic and Interactive Elements:
Use interactive displays, QR codes, and personalised offers that encourage engagement. Interactive elements can lead to higher conversion rates.
5. Clear and Uncluttered Presentation:
Keep displays and messaging clear, with a focused call to action. Clutter can overwhelm shoppers and reduce the effectiveness of the promotion.
Don’ts:
1. Over-Promotion:
Avoid overwhelming shoppers with too many promotions at once, whether in-app or in-store. Too many choices can lead to decision fatigue and lower sales.
2. Non-Contextual Advertising:
Refrain from displaying irrelevant or out-of-season content. Ads and promotions should align with the shopper’s current needs and the store's environment.
3. Neglecting Store Layout:
Don’t ignore the importance of store layout in guiding shopper behavior. A poorly designed layout can reduce traffic to key areas and decrease sales.
4. Ignoring Shopper Feedback:
Don’t disregard customer feedback on retail media experiences. Continuously gather and analyse shopper insights to improve the relevance and effectiveness of your media.
5. Inconsistent Messaging:
Avoid inconsistencies in pricing and promotion details across different media platforms. This can erode trust and negatively impact the shopping experience.
By adhering to these best practices, brands and retailers can optimise the impact of their retail media, enhancing both the shopper experience and overall sales performance.
If you would like to know more about adding shopper psychology to your retail media, please get in touch.
