The decision by Dixons to pull the plug on its in-store radio station (MW last week) is a blow to companies trying to sell the concept of bespoke media services to retailers.
The electrical goods specialist refuses to outline the reasons for scrapping Dixons Live, although it is understood to be part of a wider strategic review. However, given that Dixons and Immedia, the company that created the station, claim the station brought about an increase in sales of up to 35 per cent on some products, the decision will raise a few eyebrows.
The argument for in-store media is persuasive: it is widely reported that 75 per cent of all purchase decisions are made in stores. The medium has made significant progress in recent years, with Asda, HSBC and Tesco among the companies trialling it. But there is still widespread scepticism about its effectiveness and there are concerns that it may be a commercial message too many for consumers.
Joshua Howdle-Fuller, account director for Johnson & Johnson at Initiative Media, believes the key issue is whether in-store television and radio will ever be powerful enough to beat a buy-one-get-one-free offer, rather than simply support it. He says: “There is an over-supply of brands and people tend to choose the one that is on promotion that week.”
Supporters of in-store media agree that it is still in its infancy, but deny it is just a tool for raising awareness of special offers. Bruno Brookes, former Radio 1 DJ and founder of Immedia, which runs in-store stations for HSBC and Lloydspharmacy, says in-store broadcasting is not about the hard sell.
He explains: “The most important component of any live radio is speech. We must not forget that consumers are cynical from the off. They are hit with about 15,000 commercial messages a day so they are automatically going to ignore many. You have to have the ‘wow factor’, which is something other than a price-led offer.”
Brookes points to Lloydspharmacy Live, which offers consumers advice on health issues and raises awareness of services such as free diabetes tests, as well as recommending new products. He claims it is also used as a motivational tool for staff.
He can also see the effectiveness of having visuals to match the audio. He is testing a system called Radiovision, where in-store screens show pictures that are triggered by the radio presenter’s script.
In-store TV is also growing, albeit slowly, with Tesco testing 5,000 screens in more than 100 stores, including seven different channels in separate sections of the shop. Spencer Berwin, group sales director at JC Decaux, which operates the channel and sells advertising, says that good content helps consumers realise it is more than dumbed-down TV. He adds: “People need to look at it as the next step in outdoor advertising, rather than in TV.”
But Berwin concedes that few traditional creative agencies are getting involved at this stage, as there is still much to learn about what kind of work is the most effective. Media agencies also remain sceptical. He explains: “I think it is similar to the early days of online. Media buyers can’t quite put their finger on the concept. At the moment it falls into the ‘too difficult’ box.”
In-store broadcasting could actually reduce advertising clutter, by decreasing the need for posters, trolley and floor messages. But many in the industry believe it is an intrusion many consumers will not accept.