brandcentric blog

Well, it was over before it really even started.  This week’s announcement that Nielsen has suspended the PRISM in-store data program was unexpected, but not terribly shocking.  The goal of PRISM was to define generally accepted metrics for in-store marketing and merchandising along with syndicated data from a network of participating retailers.  This program would have set the stage for a massive reallocation of marketing dollars from traditional media to in-store activities.  CPG marketers, including Procter & Gamble were very excited about the prospects for PRISM and the in-store visibility it would finally provide to the industry.

That was until Walmart unceremoniously backed out of the program last month.  This single move took the wind out of the sails for Nielsen’s ambitious plans.  Getting this program off the ground without Walmart will be difficult at best, given that many manufacturers source up to 25% or more of volume through this single retailer.

So where does this leave an industry that desperately needs deeper in-store marketing and merchandising visibility?   Continuing to throw dollars at legions of in-store merchandising audit teams doesn’t scale and isn’t cheap.  Inferring in-store compliance from the patchwork of retail POS and syndicated market data won’t deliver a consistent, comprehensive set of causals to rely on.

Ultimately innovation will prevail and save the day.  Perhaps an idea like Store Eyes, which I blogged about recently, will provide that right balance of rich store-level data in an affordable and scalable fashion.  I sure hope someone capitalizes on this opportunity, and real soon.

Kraft has stepped up and launched what appears to be the CPG industry’s first consumer iPhone application called iFood Assistant.  This nifty little app provides iPhone users with a way to engage with Kraft and its portfolio of brands in a new and exciting way.  Through the iFood Assistant, consumers can search and retrieve recipe ideas, build a shopping list and even view instructional videos right from their iPhone.  Of course, all product shopping lists draw from the Kraft portfolio of brands and exclude competitors.

Hats off to Kraft for taking a stand and making this investment of time and energy.  According to recent research from NPD, the iPhone now ranks #2 in unit sales for smart phone devices (simply amazing after just 18 months since launch), so this investment makes sense.  At first pass, I see three ways that Kraft could leverage the iFood Assistant app to deliver an even richer consumer experience:

1. Contests and games- Expose all Kraft-branded interactive promotions, contests and games through the iFood Assistant application.  Promotions don’t need to be tied to those using the application, but this could present a great awareness channel for Kraft to reach digitally-inclined consumers.

2. Digital coupons- This has a logical fit and could be one of the killer-apps for the iFood Assistant.  Since consumers are already accessing recipes and tips through the application, offering brand-specific digital/printable coupons could be a great tie-in for the next shopping trip.  Extending this idea even further, Kraft could allow consumers to electronically deposit coupon value onto their Kroger-banner loyalty card accounts.

3. Trade promotions- Kraft is already directing iFood Assistant users to local grocers to fulfill their recipe shopping needs.  Taking this one step further, the local grocery store search results could also display retailers that are featuring Kraft brands, or offering a price promotion such as a buy-one/get-one or even a temporary price reduction.

I’ve become a big iPhone fan, and am happy to see Kraft take this pioneering step to better serve consumers.  I look forward to seeing how this application evolves over time.

Catalina Marketing made a pretty sizable investment upgrading their printer network from black & white to color in 2007.   I have to say, the color coupon print outs are more attention-grabbing and engaging.   Catalina has since focused their message to brand marketers around the network as a viable alternative to traditional media.  Using Catalina as a targeted marketing vehicle is indeed one way to reach a defined demographic more efficiently based on purchase history.  My experience is that Catalina coupons can redeem at 5% or higher, vs. the half-point to 1.5% redemption (on a good day) for FSIs, albeit off a much smaller distribution.

This video is a pretty interesting overview of how Catalina is marketing the service to brand folks focusing on the targeted marketing message.  My only real question is, what’s up with the caveman harrassing the shopper at 1:03?

Getting a read on in-store merchandising is one of the more confounding activities for CPG brand marketers.   Answers to questions such as “was my promotional display put up or not?”, to “did they cut in my new item on the day and time promised?”, or even “was the promoted price point that I funded actually reflected at the shelf?” are hard to pinpoint.  Your choices today are not so great – either pay a retail merchandising crew to walk a set of stores and capture data in a handheld device (expensive and error prone), or interpret a feed of syndicated data (delayed by 4 weeks and projected from a limited sample with few causal variables).  Either way, you can’t get answers to these critical questions in the way you want it, when you need it.  And the data you get certainly won’t allow you to “see” what’s happening in the store.

Enter Store Eyes.  The vision for this early stage company is pretty cool, and very ambitious: Arm retail stores with a “Mobile Capture Unit”, or MCU, that is walked down every aisle once a day.  As the MCU makes its way throughout the store, a set of cameras builds a 360 photographic image of all shelf settings.  Think Google Street View, but in a grocery store.  These images are then searchable and viewable by end-user subscribers to the Store Eyes service.  In addition, the MCU has a handheld scanner that the operator uses to overlay pricing on promotional displays, shippers, and perhaps even a set of predefined staple items.  Data is fed into an on-board PC, sent via Wi-fi to a server in the back of the store, then aggregated across all stores in a central data warehouse.

If the Store Eyes team is able to execute against their plan, the business implications are pretty compelling.  For retailers, a new, potentially valuable revenue stream of “digital gold” will flow out to the vendor community.   Brand and sales folks will have daily views into detailed merchandising and compliance data and images.  Any mystery surrounding display, pricing, or merchandising commitments will be a thing of the past.

I see a few issues that the Store Eyes team will need to iron out before this business really takes off:

1. Business model — the unit cost for each MCU has got to be pretty substantial, and someone has to finance it.  If retailers are expected to invest in or lease the systems, that could present a pretty big drain on cash flow.  To counter that, if manufacturers are lined up to subscribe to the service, then the business case becomes a lot more appealing.

2. Legacy behavior — Store Eyes exposes all the good and the bad that is going on inside the four walls of the store.  Some retailers benefit from ambiguity by not complying with promotional and merchandising plans.  Exposing non-compliance may be somewhat threatening to the old-guard retailers.  In this case, TMI (too much information) may be bad business.

3. Network scale — as with any in-store measurement program, the economic value is a byproduct of the network.  The more retailers and stores that are capturing Store Eyes data, the more valuable the service is to subscribers of the service.  The reverse of this is true as well.

That all said, I really like the vision and innovation that Store Eyes is founded on.  I hope to see these guys succeed and bring a new, potentially disruptive technology to the industry.