3 Ways to Prepare for the Check-Out Free Store

3 Ways to Prepare for the Check-Out Free Store

On a recent trip to Seattle, I stopped in at an Amazon Go store. The stores use a revolutionary technology, so there is no waiting in line or checking out.  Amazon has opened 3 new stores in the last month, so it’s not too early for CPG brands to start thinking about the implications for in-store promotions. Today paper coupons still make up 90% of distribution and nearly half of promotional budgets are in physical displays and shelf signage.  Here are some thoughts on how to prepare:

  1. No more in-store redemptions:
    Even though digital coupon redemption is rapidly growing at 67% and FSI is declining, many manufacturers are not adapting as quickly as they would like.  The barriers are complex, centered primarily around retailer requirements, forecasting, and top retailers not accepting digital offers.  We’ve seen clients accelerate their digital programs by choosing alternate distribution methods such as mobile rebates, simplifying offers to reduce consumer confusion, and shortening expiration dates to create a sense of urgency to purchase.
  2. Pre & Post shopping engagement will become more important: 
    Many shoppers are on auto-pilot while in-store and it takes something significant to disrupt them. This will only become more challenging with the check-out-free store. When executed correctly, consumer rebates, sweepstakes, customized coupon offers, and sampling are effective in driving engagement before and/or after the trip. We are continuing to see more suppliers in this space and witnessing how their capabilities are benefiting both consumers and brands, especially when purchase data is available and can be leveraged. 
  3. Traditional in-store tactics will need to evolve:
    Our clients continue to invest in in-store executions, but more innovative solutions are needed to drive sales and adapt to the changing landscape. On-pack sampling could increase with check-out-free stores, since the same technology can be leveraged to reduce theft, today’s biggest barrier to promoting trial in-store.  Displays and in-store signage will continue to play an important role, but new disruptions utilizing audio and interactive platforms are necessary.  In oversaturated and highly stimulating in-store environments, shoppers require fast ways to obtain the information they need to help them choose.

     

At pep we are excited to continue to partner with our clients and supplier partners as the landscape shifts. We believe that while distribution methods may change, consumers will continue to try new products, want reasons to remain loyal, and get excited over compelling offers.

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Katy Brennan
Vice President, Client Services
katy.brennan@peppromotions.com

 

Interested in learning more about pep? Contact us: newbusiness@peppromotions.com

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