Taking Control of Your Digital Shelf Space, Part 1

It’s an undisputed fact that a significant shift is occurring in the modern retail industry, with a substantial amount of consumer spending moving from in-store to online purchases. According to the U.S. Department of Commerce, e-commerce sales reached $165.4 billion in 2010. What's more, Forrester Research predicts that figure will reach $279 billion by 2015. When the experts point to growth of more than $100 billion in just five years, those involved in the retail ecosystem need to be prepared to effectively embrace this trend moving forward.

While there's clearly been a major shift in the shopping model over the past several years, perhaps more importantly there's been a substantial change in consumers. Technology is the primary element fueling this shift. The 24/7 access to the internet — whether at home or work or via a smartphone or tablet — consumers now have obviously has had a profound effect on their behavior.

This dynamic has also influenced those opting to ultimately make the final purchase decision in-store. An estimated 62 percent of shoppers are searching for deals online before ever stepping foot in a store. The growing use of mobile technology by in-store shoppers also helps the increasingly tech-savvy consumer find better deals or secure lower prices with price-matching offers by conducting simple online research at the point of decision.

Many retailers are now embracing this technological evolution by integrating the online and in-store shopping experience by directing in-store shoppers online for expanded merchandise selections to encourage additional purchases after the in-store transaction has been completed. This is only one example of the many ways technology is enabling this paradigm shift and empowering consumers.

Digital Shopper Marketing Defined
This all leads to one very important consideration: How do retailers and brands ensure products get noticed in this rapidly growing and evolving online retail environment? This is an age-old issue that's been a top priority for retailers, brands and merchandisers for decades in the traditional in-store environment. Experience usually teaches a valuable lesson. Traditionally, eye-level or endcap shelf space placement, considered “prime real estate” in brick-and-mortar retail stores, results in increased brand awareness and ultimately increased sales.

Shoppers, in turn, are made aware of time-sensitive offers and new products worth trying, while still having the ability to easily find the products they want. As more and more shoppers transition from physical stores to a digital and mobile experience, it's important for retailers and brands to embrace the tactics that have so effectively propelled sales in the past.

A highly effective strategy that's been employed within the in-store environment for some time is shopper marketing. It’s been said that an effective shopper marketing program can potentially grow a brand’s revenues by up to 25 percent faster compared to the overall category. This is why a large number of manufacturers rate shopper marketing programs among the top four programs that deliver results. Some of the world’s largest brands are now moving in-store shopper marketing budgets into the e-commerce space to embrace digital shopper marketing strategies.

At a high level, the phrase "digital shopper marketing" refers to the prime in-store shelf space that brands have paid for years to have products featured on, digitally; digital shopper marketing simply takes this concept and brings it online. Therefore, the same principles of in-store shopper marketing need to be thought of in digital terms.

However, while a seemingly simple concept, securing premium digital shelf space has been shockingly underutilized to date. Just as prime shelf space within the in-store model increases brand awareness and sales, acquiring prime digital shelf space allows brands to capture consumers at the point of purchase.

Stay tuned for part two of this series in tomorrow's ROI Report, when I'll discuss the digital path to purchase and how to take control of digital shelf space.

Ji Kim is founder and CEO of DiJiPOP, a provider of on-demand digital shopper marketing technology solutions. Reach Ji at ji@dijipop.com.