RETAIL STRATEGY

Retail displays: Non-implementation is the problem, study finds

By our African Marketing Confederation News Team | 2024

Researchers embed sensors into in-store displays for real-time reporting of where and how they’re being used – with worrying results.

Whether it’s a pharmacy, a supermarket or a clothing store, when you walk into a modern retail outlet in a major town or city you are likely to encounter a flashy promotional display featuring products from a specific brand.

Image by Purplegillian from Pixabay

It’s a marketing strategy that’s effective at boosting sales. Leading manufacturers and suppliers will plan display campaigns and sign contracts with retailers that specify when to install the exhibits and for how long. They often provide incentives to retailers to encourage this.

 

But a new study from two associate professors at the McCombs School of Business at the University of Texas at Austin reveals a major problem with the strategy: the stores. They’re failing to place promotional displays according to plan – if at all.

 

Their study, titled ‘Promotional Inventory Displays: An Empirical Analysis Using IoT Data’, is published in the academic journal Manufacturing & Service Operations Management.

 

In the past, says Associate Professor Ashish Agarwal, it’s been difficult to fully monitor compliance by individual stores, making penalties for non-compliance a rarity.

 

For this study, however, he found a new data source: internet of things (IoT) technology, which embeds sensors in displays to provide real-time reporting of where and how the displays are being used.

 

Agarwal and his McCombs colleague Ioannis Stamatopoulos, along with Jacob Zeng of Gonzaga University based in Washington State, conducted a six-month study covering 10 marketing campaigns, almost 4,800 stores, and close to 15,000 promotional displays. Companies involved included Johnson & Johnson and Coca-Cola.

 

Thanks to the IoT, the researchers could track when and whether those displays made it to store floors at the planned times. They found that:

 

  • One-third of the displays were never installed.
  • Those that were installed were in place for just 62% of the specified periods.
  • Only 2% of displays were placed on, and removed from, the floor on time.

 

“One major issue is poor execution, leading to missed sales opportunities,” says Stamatopoulos.

 

Botched displays cost sales

 

Poor execution deprived brands of substantial sales, the researchers found. Displays boosted sales of targeted products by 2.3% when they were installed during the specified campaign period, rather than during a non-campaign week. “If it’s done correctly, it can actually boost sales,” emphasises Agarwal.

 

Why aren’t stores doing it correctly? Because busy managers often see the displays as a nuisance. From the data, researchers found correlations that support the ‘nuisance’ diagnosis.

 

  • Larger, more complex displays were far less likely to make it to the floor.
  • So were ones that arrived too early or on weekends.

 

Agarwal believes the best solution is to invest in IoT technology. Installing sensors in every store and on every promotional display might be cost-prohibitive for some organisations, but it could pay off over time as brands recoup lost sales by ensuring compliance with the wider marketing strategy.

 

If using IoT technology is not viable, another solution would be to offer better incentives to store managers to encourage them to install displays correctly.

 

“This study is showing [suppliers and retailers] the value of promotional displays,” Agarwal says. “The next step would be to do a cost-benefit analysis to determine whether you should implement the [available IoT] technology or not.”

 

You can find out more about the study here.

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    Dr Kin Kariisa

    Group CEO - Next Media

    Dr. Kin Kariisa is an extraordinary force at the helm of Next Media Services, a conglomerate encompassing NBS TV, Nile Post, Sanyuka TV, Next Radio, Salam TV, Next Communication, Next Productions, and an array of other influential enterprises. His dynamic role as Chief Executive Officer exemplifies his unwavering commitment to shaping media, business, and community landscapes.
    With an esteemed academic journey, Dr. Kariisa’s accolades include an Honorary PhD in exemplary community service from the United Graduate College inTexas, an MBA from United States International University in Nairobi, Kenya, a Master’s degree in Computer Engineering from Huazong University in China, and a Bachelor’s degree in Statistics from Makerere University.
    Dr. Kariisa pursued PhD research in Computer Security and Identity Management at Security of Systems Group, Radboud University in Nijmegen, Netherlands. As a dynamic educator, he has shared his expertise as a lecturer of e-Government and Information Security at both Makerere University and Radboud University.

    Dr Kin did his PhD research in Computer Security and Identity Management at Security of Systems Group, Radbond University in Nigmegen, Netherlands. He previously served as a lecturer of e-Government and Information Security at Makerere University in Kampala, Uganda and Radbond University in Netherlands.

    Dr Kin did his postgraduate courses in Strategic Business Management, Strategic Leadership Communication and Strategies for Leading Successful Change Initiatives at Harvard University, Boston USA.

    • Other current and previous roles played by Dr Kin Kariisa:
    • Lecturer of e-Government and Information Security to graduate students at Makerere University, Kampala and Radbond University in the Netherlands
    • Director of Eco Bank Uganda Limited, one of the largest banks in Africa
    • Chairman of the National Association of Broadcasters, an umbrella industry association for all Television, Radio and online broadcasters in Uganda.
    • Chairman of Board of Directors of Nile Hotel International, that owns the leading hotel in Uganda, Kampala Serena Hotel.
    • Chairman of Board of Directors of Soliton Telmec Uganda, the leading telecom company in Optic fibre business managing over 80% of optic fibre in Uganda.