Talk Me Into It in the Media

It may not be a bad idea. Even as overall retail sales started tanking late last year, online retail sales were growing at healthy double-digit rates, according to ComScore and Nielsen Online.

Ease in the aisle

For the growing number of consumers who prefer the online experience to traditional shopping, the ease of finding products and getting recommendations clearly is a draw, said Carter Cast. Mr. Cast, a former CEO of Walmart.com and head of strategy for Wal-Mart Stores in the U.S., became CEO of fledgling specialty online retailer Netshops late last year.

Because of expectations created by web shopping, consumers increasingly expect offline stores to have the goods they want and make them easy to find, Mr. Cast said. "So the ante is raised in the physical world."

Unfortunately, stores aren't always anteing up. "I've read statistics that show a surprisingly high number of people [more than 10%] will go into a big-box and leave without [buying anything] because they haven't found what they want," he said.

Though he hasn't seen some of the newer systems in stores, such as the Olay system being tested by Wal-Mart and P&G, he said they have potential. Mr. Cast also said more retailers will look to mimic the online experience by porting inventory data from their stores to their websites to give consumers real-time information about product availability.

OTC offline

Another take on the online-to-offline phenomenon is Evincii, which began installing kiosks offering a mix of search and recommendation-engine capabilities in the over-the-counter-drug sections of Longs pharmacies in California in 2006 and is looking to roll out the concept nationally.

Johnson & Johnson is an initial advertiser on the system, which allows advertisers to place ads similar to online display ads, including video, around search results.

But like Google or other search engines, Evincii looks to return "organic" results only based on the criteria shoppers input, such as their symptoms, said Charles Koo, CEO of the private-equity-backed venture. Then, once they've selected a product, the kiosk helps them locate it on the shelf.

Not only does Olay for You appear to have had unusual success -- consumers like the site so much that about 7% have contacted P&G's consumer-relations staff to say so, more than double the average for online initiatives -- it also comes from an unusual source. It was created by Talk Me Into It, a digital agency founded last year by Marie McNeely, a former global equity director on P&G's fabric and home-care business for Saatchi & Saatchi, which handles creative duties both for Tide and Olay. It's the first project for Talk Me Into It, which has offices in New York and New Zealand.

Helping hand

The idea was largely to help Olay, and consumers, cope with a downside of the brand's success over the past eight years: A proliferation of products and product ranges has made it difficult, particularly for newcomers to the brand or category, to know what they should buy or even where they should start in making a decision, a P&G spokesman said.

While P&G has tried in-store kiosks before with such brands Clairol and Millstone coffee, Olay For You's combination of a highly graphic, iterative interview process and a soothing female voice may come closest to actually simulating a customer-service rep.

But while all the systems sound like good ideas, James Sorenson, exec VP-retail and shopper insights for TNS Sorenson, said getting consumers to search online in the store may be a nonstarter. While consumers might be willing to spend the time to do search queries from the comfort of their homes, doing it in stores is another matter, he said.

Mr. Koo, however, said Evincii's research at Longs indicates that 15% to 18% of visitors to OTC-drug departments use the kiosks, numbers similar to those that ComScore found last year of consumers who use online search to research package goods. Stores using the kiosks, he said, had category sales lifts of 3% to 6%.

"That was a surprise to everybody, because we thought initially it was just a good vehicle for advertisers," Mr. Koo said. "But it certainly helped retail sales, too."

McNeely launched Talkmeintoit with the Olay for You suite of products, using an online tool that enabled consumers to find their ideal skin care product that involved a question and answer process.

The site attracted more than one million visitors within its first six months of operation.

McNeely said talkmeintoit was essentially "old fashioned one-on-one marketing that’s been brought into the digital age".

“We tried to understand the exact way consumers go about making purchase decisions. They’ve got to feel like they’re being talked to, not at,” McNeely told AdNews.

Talkmeintoit Australia will be headed by customer experience specialist Xperience Edge CEO Phil Prosser, out of his St Kilda Road office.

Prosser had previously taken Australian start-up Gapbuster and expanded it into 75 countries.

Another executive recently briefed on plans for the network said the concept involves moving TV screens–or digital signage–much closer to eye level, incorporating them into product displays, and creating interactive "virtual assistants" from which shoppers can get product information or refine choices in key categories such as health and beauty aids. The idea resembles a project Wal-Mart began testing earlier this year in which it adapted Procter & Gamble Co.'s Olay for You online recommendation engine for use in stores.

Executives of Wal-Mart didn't return calls or e-mail for comment.

The payoff is potentially huge for Wal-Mart and an in-store-media industry that faces new pressure -- and opportunities -- to show effectiveness. Nielsen Co. last month began full rollout of its Prism system to measure in-store audiences and sales impact from in-store promotions and media. Wal-Mart has been a charter backer of the system, allowing Nielsen limited access to scanner data it otherwise withholds from syndicators.

Budgeting One stated goal of Prism's backers, including Wal-Mart, P&G and their joint media agency Starcom MediaVest Group, is to provide data on in-store marketing and media comparable to that for other media, so that it's easier to tap media rather than sales promotion budgets to pay for it.

For years, Wal-Mart executives have compared growing foot traffic in their stores, now north of 130 million weekly, to declining network TV audiences. Yet the Wal-Mart Television Network has never become a big media player. It's operated by PRN, a unit of the French company Thomson, which owns Technicolor and sells a variety of products and services for the movie and TV industries.

Advertising revenue for Wal-Mart TV totaled about $61 million in 2003, according to documents PRN released as part of an aborted initial public offering in 2004. Thomson hasn't broken out PRN revenue separately since acquiring the company in 2005, but the unit of which it's part has been shrinking in the past year, and financial reports suggest the entire PRN business (including other networks for such retailers as Best Buy and Costco) couldn't have grown much more than $250 million, with Wal-Mart TV ad revenue not much higher than $100 million to $150 million.

Any way you cut it, Wal-Mart TV's mega-reach has delivered revenue only on par with thinly rated cable networks rather than anything approaching the $64 billion advertisers spent last year on TV in the U.S., per TNS Media Intelligence.

Still, Wal-Mart TV hasn't been a bad deal for Wal-Mart. PRN's 2004 IPO papers show Wal-Mart made up a combined 89% of PRN's $112 million in business in 2003, including around $39 million paid by Wal-Mart to PRN to operate the network, which the retailer also uses to hold virtual meetings with more than 1 million U.S. store employees. Based on a thin 8% operating margin for PRN, Wal-Mart appears to have been getting back more money from ad revenue than it paid PRN to operate the network. Essentially, it gets a corporate video network fully financed by suppliers, with some additional ad revenue to boot.

But it could be getting much more if it can tap dollars earmarked for other media. Wal-Mart and others are banking interest in its new system will be so intense that people will pay to attend a sales presentation. Besides the Sept. 3 presentations, a session on the new network -- open only to agency and marketer executives at a price of $275 a head -- is set for the In-Store Marketing Institute's expo in Las Vegas in November.
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