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October 1990 |
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 Printer Friendly Version |
| Electronic In-Store Merchandising Has Arrived |
Article for "SEMA News"
The Official News Magazine of the Specialty Equipment Market Association.
by Stephen J. Alexander
President, Automotive In-Store Marketing |
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| Stephen J. Alexander |
Producers and distributors of anything marketed from retail shelves have experienced a tremendous amount of change since 1977. That was the year the prestigious point-of-Purchase Advertising Institute and du Pont published its long-awaited, updated study of shopper behavior in retail stores. Pilot research had begun as far back as 1935. Simply stated, the premise of the study was that shoppers would be more likely to buy products which were easier to see and pick up as a result of smart display merchandising. It was the release of that study that began the change of terminology from what used to be called P-0-P, or point-of-purchase, to in-store merchandising.
Realities make it very clear that smart brand management should start with smart in-store display merchandising techniques. These same realities are causing enlightened brand management to call for heavier investments of time, talent and money into merchandising displays which effectively target the impulse shopper.
"In-store merchandising" is not merely a catchy phrase dreamed up by Madison Avenue. Reflective of this are changes in retail display from pegboards and hanging hooks to electronics; and from simple physical merchandise stocking to actual marketing in the aisles, where nearly 70 percent of decisions to buy are made.
While sales of automotive aftermarket products continue to grow, the rate of growth in our industry is slowing. In this maturing market, intensive and extensive market share battles are raging as marketers struggle to capture the consumers' attention ... and dollars ... from within the retail store environment. New in-store merchandising techniques need to be attention ... and dollars ... from within the retail store environment. New in-store merchandising techniques need to be adopted to provide an all-important point of difference at the retail level-and also to provide excitement, education, interest and individualized information-targeted and custom-tailored to each shopper's interests and concerns.
Enter electronic merchandising!
Growing use and interest in electronic in-store merchandising has resulted from a combination of demographic changes. With the growth of two-income families, today's busy consumers need and demand convenience. This, in many cases, translates into service. Pressure on manufacturers and retailers alike competing for dollars on the basis of service, as well as product selection, price and quality, is substantial. This need for increased levels of service comes at a time when retailers are finding it more and more difficult to maintain current levels of service. There are fewer retail salespeople on the floors of automotive aftermarket specialty stores. The pool of workers under age 25 is declining. Unskilled and under-product-educated labor is having a hard time keeping up with the high levels of service and knowledge that automotive aftermarket customers demand.
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| The Autronix Video Shopper , introduced at the 1988 SEMA show, was the first interactive merchaindising system creaed specifically for the automotive aftermarket. |
Changes in the country's ethnic mix are also having a profound impact on the retail scene. Immigration-primarily Hispanic and Asian-now accounts for 25 percent of population growth. As these demographic changes evolved over the past decade, mass marketing largely gave way to regional marketing. The focus now has shifted to the local level, and micro-marketing is the strategy employed to respond to changing consumer needs and segments. Changes in the overall retailing environment have intensified pressure on more traditional retail formats and store image has become an important marketing consideration.
Electronic marketing-or interactive performs a range of marketing functions and services delivered electronically. It offers consumer-involved, consumer-activated shelf-edge or stand-alone systems that inform and recommend the purchase of specific items. One of the basic benefits of the interactive system is that it provides customer service in the absence of a sales clerk. Within that context it can deliver a customized product recommendation and thus a call to action.
The interactive unit can be programmed to "push" specific items, forms and segments within a specific brand line, and this programming can assure that the customer makes the correct product selection to meet his/her needs. Equally important, an interactive unit is seen by the customer as supplying reliable, professional information. The computer is viewed as an impartial-and generally infallible-source of information.
Today's automotive aftermarket customers are technology-minded. They are also accustomed to interaction from a variety of settings. There is no hesitation about interacting for a variety of purposes and in a variety of settings. There is no hesitation about interacting with these units. If it ever did exist, it has been overcome by routine access to ATMs in banks, catalog mail order and electronic shopping. The interactive system adds interest, excitement and even fun to the retail environment and product presentation. It calls attention to a particular section and provides the point of difference. The latter is not only critical to the manufacturer's sales efforts toward the consumer, but may also be an equally important element in the retail sell-in strategy. Central to this ability to create the aforementioned interest, education and excitement is interactive's all-important locale: at the point-of-sale where the greatest percentage of actual buying decisions are made.
The advantages inherent in the ability to stop the consumer in front of a particular product and communicate with him are at once apparent.
An ancillary benefit of an interactive installation is its ability to accumulate targeted consumer information. Through the entry and retrieval of various demographic information, a timely and accurate database of actual sales prospects can be compiled. This information can be analyzed and used to fine-tune marketing strategies tailoring category assortment, adjusting pricing, providing intelligence for a quick response to a changing environment and identifying consumer preferences.
Documented case histories in an ever-widening variety of product areas point up that cost-effective, electronic merchandising has come of age in the retail environment. In the broad spectrum of American retailing an increasing number of outlets are offering their customers some form of interactive units, systems that are no longer restricted to major department stores and high-end merchandise.
The case for electronic merchandising keeps getting stronger. From its early beginnings at ATMs in banks, interactive units have become key marketing tools, and have won confidence and acceptance. The timing is exquisite for the automotive aftermarket to focus on this aggressive in-store marketing activity!
Stephen J. Alexander is an aftermarket consultant, speaker and monthly columnist for SEMA News. To learn more about other in-store merchandising and marketing issues, contact Stephen Alexander, Automotive In-Store Marketing at 239-395-9203 or e-mail him at salexander@autoinstore.com.
COPYRIGHT NOTICE:"Reprinted with permission from SEMA News, October, 1990, page 9. Copyright by Specialty Equipment Market Association . Specialty Equipment Market Association retains all rights to this material." To subscribe to SEMA News, visit www.sema.org, call 909-396-0289, or email member@sema.org.
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