From the consumer?s point of view, retail is partly a form of entertainment. Thousands of people meander around shopping centres every weekend with a vague notion of looking at what is on offer. Nine times out of 10 they return with something they had no real intention of acquiring when they set out.
Computer retailers and other dealers with a high street shop front can profit by exploiting ?the shopping experience?. An in-store promotion centred on a product or product genre can provide just the extra attraction required if it is done well.
True, few people will buy a PC on impulse, but if the timing is right or if a peripheral product is chosen correctly, in-store demos and other activities can significantly push up sales figures. Even if onlookers don?t buy the product on promotion, once they are in the shop there is always the chance that they will see something else ? or that they will come back when they have made up their minds.
Watch how street entertainers gather a crowd: they stop a few and soon the equivalent of particle theory takes over until there is a circle three or four deep. When the act is over, a percentage of the onlookers feel obliged to donate their spare change.
HMV?s flagship store on Oxford Street, London, uses this tactic throughout the year, with high-profile in-store launches for its music range and for games software, often held on Saturday mornings. It?s not unusual to find a famous footballer or two in the store promoting the latest game.
Football players are top choices for computer product promotions. Many PC hardware manufacturers sponsor football teams, so promotional appearances can be written into the sponsorship contracts. For example, as part of its sponsorship of Tottenham Hotspur, Hewlett Packard had Gary Mabbutt and other Spurs players popping up at retail stores around the South to promote Pavilion PCs last summer.
VCI?s Manchester United CD-Rom was promoted with in-store competitions, which had signed team shirts and balls as prizes. The difference in the profit to be made from a PC and a disk is, of course, the reason why one had the players and the other just their signatures.
Football is good for computer product promotion for two reasons. First, it is mostly males who buy PCs and software for the home. Second, it is mostly males who run computer companies.
Appealing to a young audience of both sexes, Virgin Megastore Radio (VMR) transmits to all 50-plus Megastores live, scheduling in-store appearances, celebrity interviews, reviews and music.
VMR is not restricted by the broadcasting regulations which its big sibling has to abide by, so the interviews are often risque and flavoured with colourful language. That way a 20-something New Bloke accompanying his girlfriend to the shops on a Saturday morning can at least tell himself he?s living on the edge.
But in-store activities don?t need a top-class celebrity, an Oxford Street location or a nationwide radio station to make them attractive to prospective punters. But they do need to be done well and provide the customers with a reason for stopping in a shop, such as competitions, give-aways and plenty of visual attractions.
Nor does an in-store event have to be aimed at home consumers. Microsoft ran a series of briefings for small businesses around the launch of Office 97 in conjunction with Byte and PC World earlier this year.
The good news for dealers is that many manufacturers of computer products are only too keen to provide resources ? POS, co-operative marketing funds and personnel ? to make in-store promotions a success.
Language translation software publisher Globalink teamed up with Software Warehouse to run an in-store promotion last summer. Bottles of wine from various European countries were given away as prizes while demonstrators showed that PCs can do cheap, fast language translation without the aid of Douglas Adams? Babel fish.
Microsoft organised a one-off family multimedia day with a Comet branch recently. The software publisher provided the people to do demos, prizes for competitions and POS to decorate the store, while Comet mailed local parents and schools and got the local media involved.
Mail-order and retail PC vendor Time uses demos running at selected Asda stores to show its consumer PCs. First-time PC buyers are often fearful of mail order because they want to be able to touch the product before buying it. Time?s arrangement with Asda provides PC virgins with the required tactile experience, although they can only order the product at Asda, not actually walk out of the shop with a PC.
One of the problems of in-store activities for PC manufacturers and software publishers is measuring the cost effectiveness. Getting trained demonstrators in-store on a Saturday with the right equipment and all the give-aways and POS is expensive. But how much more product gets sold by an in-store demo compared with, say, a local radio ad, a window display or some new POS? Most PC makers are relatively inexperienced in retail, so are at the mercy of the retailer to tell them what is and isn?t effective.
?It?s difficult to measure the impact of sales for that store on that day,? says Julie Armitage, Microsoft retail sales manager.
It is easier to measure the cost-effectiveness of in-store events for low-ticket items which people aren?t likely to go away and think about ? they either buy on the day or don?t buy at all. This is particularly true of consumer software where the amount spent on an in-store event can be directly related to how much more of the product has been rung through the tills. And the results can be compared with stores which didn?t have the same level of activity.
One of the clients represented in-store by merchandising firm EMS is the multimedia arm of the BBC, with high-profile consumer brands like Wallace & EMS ran Mastermind competitions in PC World and Byte stores over Easter, using an in-store demonstrator who played the role of Magnus Magnussen and two assistants who recruited shoppers to sit in a replica of the famous black leather chair.
?If you want Wallace & Gromit for a store opening you won?t see much change out of #2,000,? says EMS chairman Richard Thompson. ?For Mastermind, Magnus would be even more expensive. That?s on top of the cost of a trained demonstrator, POS and prizes or other merchandised hand-outs.?
But in-store events seem to work best on high-ticket products and specifically those that are new to the consumer arena and require a high degree of education. Although the primary aim of in-store promos may be to shift more units of a given product on a given day, in-store events have less tangible long-term effects. ?The in-store sales team buys in to the product too, so there is a spin-off in longer-term sales,? says Thompson. ?What value does a manufacturer put on capturing the mind share of store staff??
The motivating effect that a vendor-trained demonstrator has on in-store staff lasts far longer than the one day of the event.
?It is expensive to do in-store events and the sales on the day may only increase slightly,? says Jackie Seears, marketing manager at Logitech, one of EMS? clients. ?If someone sees your product demonstrated it can sway them; some people do buy on the day. But you need to look at sales over a month or so. Store staff don?t forget a demo-day quickly, and they go on selling the product weeks after you?ve gone.?
Logitech ran a series of retail events before Christmas for its scanners. ?People read about scanners in computer magazines, but their knowledge remains very theoretical and they are nervous about walking into a store and buying,? says Seears.
?People don?t really understand how scanners work or what sort they should choose. They get confused by the technical stuff and think that flatbed must always be better than sheet-fed or handheld.?
As a consequence, the in-store events evolved into showing customers simply ?what a scanner can do for you?, scanning text and pictures and displaying them on screen.
The scanners are priced up to about #200, so although some people buy on the day of the event, many go away to think about the purchase. Thus Logitech has provided retail managers with scanners of their own to use at home, so that when the customers come back to buy, having thought it through, the sales staff are still equipped to answer any questions the customer may have after the demonstrator has gone.
AST and Microsoft ran events through November and December last year, promoting AST?s Advantage home PCs and Microsoft Works in 50 stores, including Comet, Tempo, Byte, Granada, Norweb and Scottish Power. The events used street entertainer tactics with product demos fitted into a script.
It may sound corny, but TV ads written like soap operas and soap operas containing moral lectures on subjects from Aids to marriage vows (see any episode of Eastenders over the past year) have softened the public?s susceptibility to this particular technique.
Con Mallon, AST UK product marketing manager, said sales doubled in the stores where the events took place. People bought on the day because, in the run-up to Christmas, they were going out with the intention of buying a PC. The in-store events simply made up their minds about the brand they chose.
The hike in sales may be enough to justify the expenditure, but Mallon says that the real benefit comes from the intangible spin-off ? getting close to retail.
?You don?t get many opportunities to be in-store for two solid days,? he says. ?In the course of those two days you get the chance to increase store staff?s confidence, knowledge and enthusiasm for the product.?
For some manufacturers and publishers, Christmas 1996 was the first time they had really got involved directly with retail rather than at arms? length through distribution. The lessons they learned will certainly be put into effect this year when it comes to organising in-store events.
Back in February 1995, McZee, the blue cartoon character from Microsoft?s Kids Creative Writer package, was strutting his stuff on Oxford Street as part of the PR launch of the product. Some poor sap had to dress up in the latex and fur suit with the outsize blue nose and stand outside HMV handing out leaflets to wary shoppers. If Microsoft did that now it would probably be mistaken for a general election stunt, along with the chickens and teddy bears.
?We?ve moved on from doing general demo days and broad brush stuff to being more focused about what will make a customer come to a store and what is of benefit to the retailer and to us,? says Armitage.
Office 97 is a relatively high-ticket item for retail software, selling at about #200, so seminars demonstrating the benefits to small businesses were seen as the best vehicle. Sessions were organised for late afternoon and evening and small businesses on the store?s mailing lists were individually invited. The activity was paid for out of Office 97?s #4 million marketing budget.
During November and December, when stores are overflowing, it wouldn?t be appropriate to have people sitting around for two hours listening to a training seminar, but doing them at a traditionally quiet time of the year for retail created a reason for people to go to the store when they might not have done so otherwise. It also provided the stores with customers who are likely to be interested in printers, PC upgrades and other software.
Mallon says the main lessons learned from last Christmas were that the events need a clear and concise sales message and to be tightly managed by AST, whether it uses its own demonstrators or contractors.
?We also learned that an extra pair of hands in-store always helps,? says Mallon. ?Stores were very grateful that we were providing an expert during the Christmas rush.?
The main lesson Logitech learned from last year?s pre-Christmas events was preparation, says Seears. ?Each store we visited was supposed to have a PC and scanner set up on an end-cap ready for the demo day, but often it wasn?t there or it wasn?t working. So we quickly learned to get a merchandiser there the afternoon before to set it up.?
The obvious spin-off for the retailer is that an in-store event increases sales on the day and it raises the profile of the shop for more than just the day, particularly if local media can be persuaded to cover the event.
In-store events require time, money and effort to make them work well. But in the competitive environment of computer retail, it can and does make considerable difference for the retailer and the manufacturer.
Rather than throwing money at scattergun consumer ad campaigns, PC vendors are increasingly looking for ways to spend marketing budgets more intelligently. In-store events are one of the best means of stretching the marketing funds for maximum impact.
Apart from the effect events have on the day?s takings, they also help manufacturers understand retailers? needs, which is a big step forward on its own.
Security firm set to become part of acquisitive Shearwater Group
Distributor merges three northern sites into one new hub in Warrington
Activist investor puts forward five director candidates as turmoil continues at security giant
Nima Green asks what is driving public cloud uptake in Germany