The digitisation of physical retail spaces is increasingly common as retailers rollout digital screens across in-store locations. This proliferation of in-store digital surfaces has led to the questions: is in-store retail media simply a rebranded version of digital out-of-home (DOOH) advertising?
The answer is a clear “NO”.
Yes, there are superficial similarities: DOOH advertising has evolved from static billboards to dynamic displays. Instore media has evolved from ‘cardboard’ to 4k digital screens. Yes, both channels use digital screens. Yes, both providing flexibility to display video, animation, and interactive elements.
But this is where the similarity begins and ends.
Digital in-store retail media has unique advantages in both brand building and direct conversion due to its in-store presence. It can harness the specific context of the retail environment and direct access to the shopper in ways that fundamentally differentiate it from DOOH.
As Darren Cremins of Stratacache writes “To simply define in-store retail media as DOOH is to ignore its vast potential for personalisation, targeted engagement, and sales optimisation”
What are advertisers saying?
With 85% of sales occurring in brick-and-mortar stores, it should come as no surprise that P&G and Uniliever, two of the biggest advertisers in the world – are big believers in in-store media.
“I generally believe the majority of brand choice is made in a retail environment,” P&G President & CEO Jon Moeller saidduring a July 2023 investor call. “I think less brand choice is made sitting on a couch or even driving in a car on the way to a retail establishment. The same is true for online. So, we’re very carefully evaluating this opportunity.”
Superdrug in the UK recently launched an instore screen network. Paul Stafford, Superdrug Head of Retail Media, talking about the rationale for the digital screen rollout, said: “Our aim is to make shopping more personalised and engaging for our valued health and beauty customers, allowing them to see relevant information, product news and exciting offers when in the moment and whilst browsing in store.
Who are one of the first brand advertisers to sign up? Unilever.
Katie Smith, Unilever’s senior retail media & ecommerce manager, said: “We are excited to partner with Superdrug to enhance the in-store experience through digital screens. At Unilever, we are always looking for ways to enhance the shopper journey. This initiative provides an additional touchpoint for brands to engage with customers throughout their shopping experience.”
Despite the thumbs up from these big advertisers, brands have been slow to invest in digital in-store retail media. Often, it’s just not even on their radar.
As Andrew Lipsman wrote on his Media, Ads and Commerce newsletter, “You would struggle to find a single person at a CPG brand with a direct remit for driving its in-store retail media strategy. It slips through the cracks of organizations as media budgets often don’t plan for it. In-store often gets splintered off DOOH (digital out-of-home) budgets, or it’s the domain of shopper marketing teams that think of cardboard when they hear the term “in-store media.”
Comparison of in-store retail media and digital out-of-home (DOOH) advertising
Context and Influence: reaching consumers at the point of sale
Digital screens placement within the physical store environment is a significant differentiator between in-store retail media and DOOH advertising. Unlike a billboard aiming for general brand awareness, in-store retail media can directly influence purchasing decisions at the crucial moment of consideration.
Jumbo Supermarket, Santiago, Chile:Digital Instore Screen Wine Category, left, and Digital Instore Screen Spirits Category, right
For example, Jumbo Supermarket, part of the Cencosud Group, in Santiago, Chile, has strategically positioning screens in key areas in-store, for instance, in the wine and spirits categories, to deliver relevant messages that complement the shopper’s immediate needs and drive them to make a choice for a specific brand when they are in a buying mindset just centimetres feet away from the point of purchase.
Digital instore and the power of first-party data
Traditional DOOH advertising typically broadcasts content to a broad audience based on geographical location and estimations of foot traffic. DOOH has evolved towards more data-driven approaches, incorporating location data, demographics, and even real-time conditions. However, it its targeting capabilities are much less precise than those of in-store retail media.
In-store retail media does more than simply display ads—it can actively influence the shopper decision in the moment – which can then be made even more relevant with first party date from the retailer.
Retailer-owned first-party data sourced from loyalty programmes, checkout data and analytics – even something as simple as store traffic counts and location – can enable granular level of targeting that still protects shopper privacy but still delivers relevant c content message delivery within the store environment. This is a capability that traditional DOOH, operating in a less data-rich context, cannot readily replicate.
Measurement and attribution
Traditional DOOH advertising often relies on estimations of impressions data, making precise measurement of impact challenging.
In-store retail media offers the potential for much more precise metrics that can link a display to a sale. Technologies such as RFID, beacons, and integration with customer analytics platforms can track how shoppers interact with specific in-store media placements to find out which products shoppers subsequently pick up and ultimately whether the digital content influenced their purchasing decision.
Of course, measurement remains a challenge for in-store media, the potential for granular data collection and analysis far surpasses DOOH. The launch of instore measurement standard by the IAB in the US and in Europe will only increase the reliability of instore retail media campaign performance metrics.
Shopper engagement with interactive experiences
In-store retail media offers the opportunity to create an interactive experience for shoppers. Retailers can leverage touchscreens, QR codes, entertainment, and even virtual product trials with coupons or discounts.
These experiences can even increase their effectiveness if they are tailored to shopper missions, such as:
- Week shop
- Urgent items for now
- Daily shop for fresh and perishable items.
Shopper missions are often time of day or day dependent, so advertisers using instore screens can take advantage of day-parting advertising technology that will deliver certain messages at certain times of day.
Darren Cremins of Scala talks of an excellent example from fashion: “consider a shopper in a clothing store. Instead of simply seeing a screen that shows a rotating set of ads, they might use an interactive display to browse additional product options, check sizes, or even virtually try on items using AR technology”.
While DOOH does offer increasing timing and day flexibility, it can never offer the level of interactivity that in-store can.
TL:DR DOOH v Instore Digital Retail Media
Viewing in-store retail media as merely another form of DOOH is to overlook its potential to build brands as well as to drive sales, and bridge the gap between the physical and digital worlds in ways that DOOH, operating primarily in public spaces, cannot replicate or compete with.