Does Reduced Shopper Traffic = Death of In-Store Marketing?

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Holiday shopping numbers came out and the industry went frantic. The Wall Street Journal published an article “Stores Confront New World of Reduced Shopper Traffic” showing depressing numbers, but it’s not all valid for a discussion of whether or not in-store marketing is going to die. With our newest study to be released in February, you’ll see exactly why I’m optimistic. Until then, let’s break down this WSJ article and other beliefs why brick-and-mortars and in-store marketing will die.

The major issue: decreased shopper traffic. This year’s holiday shopping (November – December) had the lowest numbers since before 2009. Why you may ask? There are a lot of factors such as horrible weather, increased online sales, but I’d like to attribute most of it to shorten shopping days between Thanksgiving and Christmas. Due to the recession, people are hunting for sales during Thanksgiving and Christmas, and this year there were only 26 days. In 2012, shoppers had 32.

According to WSJ, ShopperTrack — which uses 60,000 shopper-counting devices in large retailers and malls — tracked the decline of shopper traffic since 2011, from 28.2% to 16.3% in 2012 and 14.6% in 2013. The WSJ article briefly talks about people having less money due to the recession five years ago and having less time to shop, but it doesn’t dive deep into all of the other issues.

WSJ only briefly mentioned personal debt, but it’s a big factor of the retail industry in general. They quoted one shopper, Anthony Dolphin, 23, a mechanical engineer from Massachusetts, saying, “I just buy essentials and pay off student loans with the rest.” And that was it. Income is a big factor for shoppers. Indeed.com reports the average salary of a mechanical engineer is $82,000 and the average salary of a U.S. worker in 2012 according to SSA was $44,321.67. When a person who is almost making double the average salary is spending less, what can we expect? But the interesting thing is that WSJ says, “A Target spokesman said shoppers are making fewer trips as ‘traffic has been impacted by the uneven economic environment,’ but are spending more when they do show up.”

Even though shoppers have less money and are going to stores less frequently, it seems safe to assume that shoppers are saving up for bigger purchases, or maybe they’re being influenced by in-store marketing. Something in stores is happening if shoppers are spending more money when they’re actually stepping foot into stores. So why aren’t retailers shifting their money to in store marketing?

For those who are worried about the shoppers not going into stores, don’t lose hope. E-commerce is still a small portion of overall retail sales at only 5.9%. The WSJ article even states, “…they [shoppers] seem to be figuring out what they want online then making targeted trips to pick it up from retailers that offer the best price.” Key takeaway: shoppers are still going to stores.

From our 2012 Shopper Engagement Study, we know that shoppers make 72% of their shopping decisions in stores. Granted this was in a grocery channel, but people generally think about shopping trips the same way. They want something, they buy it. They see something new, shiny and eye-catching, they want to buy that too!  This is where we come in. There’s still a chance that we can grab their attention and drive them to buy a product on our displays. We need to give ourselves some credit. There are great displays that are enticing people to buy. Just take a look at our past OMA winners in our Creative Gallery.

Shoppers say they have less time to shop either due to time constraints, toting around kids or long to-do lists, but they’re still out and about. WSJ quotes one person say, “My weekends are one long to-do list, so I’ve gravitated to online retailers that make it easy for me to shop without having to go into the store.” Why not take that insight and run with it? Make stores a destination spot for families or create more tailored store layouts for your location. We’re seeing a trend of stores being tailored to their local demographics. Target and Wal-Mart are creating Express stores that will make shopping easier and faster. We will probably learn more about these strategies in the future, but it still give us hope for increased shopper traffic. It will be interesting to see their shopper traffic statistics.

The other missed opportunities we can learn from this WSJ article are to create change in retail stores and provide more savings and loyalty programs. If shoppers are coming into stores less often they probably don’t want to see the same thing. When I worked in the furniture and clothing retail worlds we changed our floor plans and displays around every day to keep shoppers interested in products that would be there for several months. Granted that some of you are making store fixtures, that can’t really happen but maybe it can affect they way your designs can move or be installed. Shoppers want to see products in new ways. They want to imagine that item in their life in several ways, so let’s make it happen. I know that means retailers need to invest more money in in-store marketing, but it can create a big change in sales and shopper traffic. Doing this also lead to more innovative and re-purposed displays, which leads to more emphasis on producer companies. For creating more savings and loyalty programs, this can be done in several ways. Retailers creating more programs for customers to save and producers/agencies creating more displays that link to these programs. Granted I do not have all the stats for this, there are ways to make these happen.

Just because shopper traffic is lower than previous years, it does not mean that brick-and-mortars are going to die, thus creating void for the in-store marketing industry. It just means that retailers need to focus on in-store marketing more. With effective in-store marketing and displays, shoppers will come more often and spend more. People want the personalized experience of shopping and online shopping can’t always do that. We may be seeing a trend of retailers closing stores or shifting money to online, but online stores are still building brick-and-mortars, so what trend are you going to stand behind?

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3 Responses to Does Reduced Shopper Traffic = Death of In-Store Marketing?

  1. Pingback: Reduced Shopper Traffic and the Effect on In-Store Marketing | Merchandising Matters | Retail Localization | RBM Technologies

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