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How implement screens communication

in a profitable way

Description of the

CatchTheEye methodology

Table of contents

1 Summary ........................................................................................................ 2

2 Screen placements ........................................................................................ 2

2.1 Predefined store zones ........................................................................................................................ 3

2.2 Trial plan for pilot................................................................................................................................ 3

3 Technical system solution ........................................................................... 6

4 Communicating effectively ................................................................... 6

5 Level of investment and operations ............................................................ 7

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1 SUMMARY

The intention of the method is to identify a profitable way to implement screen communication.

Using this method it will be possible to document that screens communication in stores provides a

significant boost for individual products, a modest boost for product categories and a satisfactory

boost for the store’s overall turnover. And, possibly, a satisfactory improvement in returns

sufficient to justify the investment.

The method is based on conducting a pilot, and using the findings of the Pilot, the method can

anticipate an annual growth in the store turnover. Presupposes that the screens are placed in

predefined zones, with a predefined screen configuration and displaying advertising for those

product categories that provide the greatest sales growth at chain level.

Further, it will be possible to predict commercial assessment that indicates the total increase in

turnover for the chains, achieved through the creation of viewer profiles, the preparation of

relevant content and an improved display sequence.

In our methodology we have based evaluations solely on increased franchise revenues resulting

from increased store turnover, but the method can be suited to base the evaluations on other

elements.

The pilot results does not take into account the additional value of the growth in sales for the store

managers, the sale of more profitable products, increased revenues from suppliers, the value of a

reinforced chain image, enhanced campaign implementation or other price and product-related

factors linked to the advantages of large scale store management.

In our calculations, the costs linked to a comprehensive structuring during roll-out and operation

of the system will be taken into account if wanted.

The pilot will tell if the total annual operational costs and the investments can be justified solely

based on an increase in franchise revenues for the chain, and justify the investment.

2 SCREEN PLACEMENTS

During the Pilot we will try to identify significant correlations between (1) the location of the

screens within the stores (store zones), (2) the choice of screen system (size/number) and (3)

the product categories advertised.

By means of the implementation of all the different trials we will identify the combination that

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provides the greatest positive impact on the joint retail turnover for the chain.

2.1 PREDEFINED STORE ZONES

A prerequisite for the selection of screen placement is to identify store zones and categories that

are both easily generalised and representative of the chains. We will have to select pilot stores that

are representative of a ”standard store” so that measurements of the system’s impact would be

representative for the average store.

2.1.1 Generalising the stores based on store zones

We will have to identify common factors related to the store zones in the chain, such as a

standardised product location guide or similar, that results in identifying the similarities in the

stores layout.

Further we will use the chains product location guide to divide the store into a number of

different store zones. The zones have to be located in relation to specific goods categories which

we want to test, including a final zone located in a peripheral area characterised by products that do

not generally fill the typical everyday shopping trolley ("monthly products").

2.1.2 ”Cold” and ”hot” store zones

If the chains want to, we will be able to state a hypothesis regarding that customers in the store

primarily adhere to one of two circuits; the “big circuit” and the “small circuit”. This means that

we will be able to identify if the hot zones are located within both circuits, and are linked

principally to the goods categories "Fruit and vegetables", "Dairy products” and “Refrigerated

goods”, in addition to other locations where products are found that have a high purchase

frequency, e.g., dinner items. Correspondingly, if the ”cold zones” are found in areas where

products that have a low purchase frequency are located.

2.1.3 Impact of a screen in the different store zones.

The method will make us identifying the specific level of impact of screen advertising among

all the different store zones, and the different screens within them.

2.2 .TRIAL PLAN FOR PILOT

For the Pilot period, we will choose 4 stores that are representative of the average stores in each

chain.

2.2.1 Choice of Pilot stores.

In order to identify the correct Pilot stores we will carry out a designed analyse to find out what

characterised the average store for the chain. Our starting point is to select Pilot stores from those

categories that have the most stores.

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In selecting the Pilot stores, we will use the following criteria:

–Turnover and the number of visitors

–Store area

–Geography

–Stores that are located in large towns and those that are not (urban/rural)

–Chain-specific geographical classification (e.g., high streets, shopping centres, railway stations,

hospitals)

Based on these criteria’s, we will select the four pilot stores.

2.2.2 Trial plan – hypotheses and method

The trial plan will be based on one principal hypothesis and a number of sub-hypotheses. An

example of a principal hypothesis is ”Screen advertising in the store has a positive impact on

the store’s turnover”. This would provide us with an answer as to whether screens in the stores

have any impact at all. The other hypotheses will be designed to provide answers related to which

screen configuration would be the most cost-effective during roll-out.

The Pilot project will be carried out according to scientific method in general and experimental

planning and variance analysis in particular. Experimental planning is a familiar and well-

documented discipline. The data that we acquired from the trials will be analysed with the aid

of variance analysis.

2.2.4 Methodology for the detection of departures that influence the trial data.

We know that there are various factors that influence store turnover, and we will identify and

analyse these and taken them into account as part of our analysis.

− External factors

− Weather, competitor behaviour, holidays, weekdays and weekend days.

− Internal factors

− Changes in turnover/natural chain growth, customer news sheet, cut-price offers,

promotions, access to advertised products and the layout of advertised products.

As part of experimental planning, we will use technicians who are specially employed to ensure that

the impact of the factors we want to study can be isolated from unknown or random factors:

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− Controllable factors such as the size (large or small) of the screen, its location in the store,

etc., will be incorporated into the trial plan.

− Systematic factors that cannot be controlled, but that we believe can influence the

response (e.g., the number of customers per day) will be measured and entered as

parameters as part of the statistical analysis.

− By setting up an appropriate research design in which we employ randomisation we will be

able to ensure that other unknown and random factors do not become “mixed together”

with the factors that we are studying.

As part of the trial plan we will take account of external factors by displaying advertising and the

chain logo on the screens every other day. Once a fortnight we will make changes to the trial plan

by modifying the screen configuration and the content displayed on the screens. In doing so we

will remove the uncertainty surrounding the difference in turnover for the different week- and

weekend days. We will also use geographically separated twin stores, i.e., sets of two stores

that we will analyse for the purpose of comparison in order to avoid the influence of other

factors such as local competitors’ sales, customer news sheets, advertising and such like.

In order to test all the variables during the Pilot, we will determine how long the pilot will have

to last. It is important to make sure that holiday periods such as Christmas, summer and

Easter doesn’t influence the trial.

In order to ensure that the trial plan is adhered to, each store manager will have the

responsibility for completing a report form. This form will have the following control fields:

- Do all the screens work?

- Are the screens set up correctly according to the trial plan?

- Do the screens display the correct product advertising?

- Does the shop stock sufficient amounts of the advertised product?

This form will be checked on a daily basis and any departures will be rectified.

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3 TECHNICAL SYSTEM SOLUTIONS

It is essential to base the calculations on a potential technical solution based on the identified size

and amount of screens etc. This is to have numbers on expected investments and operational

costs to calculate the Return of investment.

Elements that will influence the investment and operation are e.g.:

- Implementation of the system as part of the existing central operations system

- External or internal technical operation

- The use of existing infrastructure in the shops

- Service level agreement

4 COMMUNICATING EFFECTIVELY In the pilot, communication from the screens will take no account of the customer’s identity

(demographics), or the customer’s interests, needs and shopping behaviour when in the store.

In order to exclude differences in advertising impact (was it “good or bad”?), all advertising will

have to be produced to be “equally tiresome” with identical layout and colours, and simply

consist of a picture of the product together with its price. Each screen will have to display this

advertising message exclusively, and without variation, as part of a 30-second loop, each day for a

14– day period. This form of advertising allows us to measure which store zones, screen

numbers and sizes, and product categories resulting in the greatest impact. In spite of these

restrictions we will most possible get the scientific evidence that allows us to state with 99%

certainty that even this type of advertising provides significantly higher store turnover.

After a rollout it’s recommended to continue the monitoring and analysing, and adapt the screen

content as the chains and their customers dictate. Important instruments regarding this are as

Impact

Store zones

Product Categories

Screen system

Viewer profile, relevant content and display sequence

Instrument

Anticipated operational result

Result from Pilot

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follows:

• Viewer profile – Who are the customers?

• Relevant content – What are these customers interested in?

• Display sequence – When and how often shall this be communicated from the screens?

The impact of these instruments can be evaluated in the pilot or in an isolated pilot during for example the rollout, alternatively as a dynamic process in chosen lab-shops during ordinary operation.

6 LEVEL OF INVESTMENT AND OPERATIONS

Using the methodology during the pilot, we will identify the chains positive result solely on the

basis of the identified growth in turnover. This will be based on the setting up and operation

of the identified optimal numbers of screens in all stores.

6.4.1 Chain revenues

Revenues will be calculated based on increases in turnover observed during the pilot. We will

calculate revenue based on the chain’s franchise revenue (or other elements wanted by the

chain) as a result of increased turnover.