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What is in-store advertising?

In today’s digital age, it’s easy to assume that online shopping dominates the retail market. However, the reality tells a different story. In the United States, approximately 83% of retail transactions still occur in physical stores. Similarly, according to research from the Institute for Future Circulation, online shopping accounted for only 11.51% of Taiwan’s total retail sales as of 2023. While online shopping is growing rapidly, this statistic highlights that in-person shopping remains the primary choice for most consumers.

For retailers, brands, and agencies aiming to boost sales and capture consumer attention, physical stores remain an indispensable channel. As a result, in-store advertising continues to be a key strategy for achieving tangible success in the retail sector.

But what exactly is in-store advertising? How does it relate to retail media? Is in-store advertising simply about placing signage on shelves? And in an era where online shopping and digital channels emphasize real-time attribution and analytics, what unique value does the in-store advertising model offer for physical retail? These questions are essential to explore in order to understand how physical and digital channels can complement each other in the evolving retail landscape.

What is in-store advertising?

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In-store advertising refers to strategies designed to capture the attention of shoppers inside physical stores and influence their purchasing decisions in real time. This can include TV and tablet screens showcasing products, eye-catching branded displays, directional signage, and more. The primary goal of in-store advertising is to engage consumers during the critical moments when they are already in a shopping mindset, increasing the chances of impulse purchases, strengthening brand loyalty, and enhancing the overall shopping experience.

You’ve almost certainly encountered in-store advertising before. For example, have you ever noticed a screen above the snack aisle in a store playing a video ad for a new brand of chips? That’s a classic example of in-store advertising in action.

Is in-store advertising effective?

In-store advertising provides consumers with compelling reasons to purchase products displayed on shelves, significantly boosting sales. Unlike purely digital online shopping, the physical retail environment allows consumers to touch, feel, and interact with products, which further increases their willingness to buy. Smart in-store signage can also demonstrate the best ways to use a product, offering valuable information without requiring interaction with sales staff. One of the key advantages of in-store advertising and marketing is its ability to create a direct connection between consumers and brands, fostering trust. Consider the following insights:

• 80% of consumers increase their purchase frequency after joining a brand’s loyalty program.
• Consumer product brands that offer free samples have noticeably higher purchase rates compared to those that don’t.
• 76% of consumers are more willing to spend money on memorable experiences rather than just products.

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What are the benefits of in-store advertising?

When executed effectively, in-store advertising can deliver significant benefits, driving sales and fostering deeper customer engagement in ways that are often hard to achieve through other marketing channels.

• Capture attention at critical moments: When customers are in-store, they are already in a buying mindset and often just steps away from the point of purchase.

• Boost brand awareness: Eye-catching displays and promotions ensure your brand stays top of mind as customers browse the store.

• Deliver targeted messages: By placing ads in specific store sections—such as pet food ads in the pet supplies aisle—you can reach your target audience more effectively.

• Encourage impulse purchases: Skillful displays and engaging visuals can trigger impulse buys, increasing the value of the shopping cart.

• Enable data-driven marketing and business decisions: In-store media platforms offer rich analytics that allow brands to optimize campaigns in real time and maximize impact.

• Create omnichannel synergy: Combining in-store media with digital campaigns amplifies overall effectiveness, providing a seamless customer journey from online browsing to in-store purchasing.

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Why is in-store advertising key to growing retail media?

In-store advertising is a crucial component of retail media, encompassing advertising activities conducted within physical stores, such as digital signage, product displays, and in-store audio. Retail media, on the other hand, is broader in scope, including both online platforms (e.g., websites and apps) and offline in-store advertising formats.

Be at the moment of purchase

One of the greatest advantages of in-store advertising is its ability to reach consumers at the closest point to their purchase decision (via location, intent, and physical interaction). Ads displayed on screens, interactive kiosks, or POS systems—or on nearby billboards and materials—can capture attention at the moment when consumers are most likely to buy, increasing the chance of conversion.

Enhanced precision targeting capability

Modern in-store retail media networks leverage real-time data and behavioral insights to enable highly targeted ad placements. Brands can tailor advertisements based on shopping history, spending patterns, time of day, and location. This ensures that messaging reaches the right consumers at the most opportune moments, gradually building a more personalized shopping experience.

A comprehensive brand experience

As consumers transition from online browsing to offline shopping, retail media provides an integrated marketing approach that maintains brand visibility across platforms. This consistency not only strengthens consumer recognition and trust but also has a significant impact on their purchase decisions.

In-store advertising, as a vital part of retail media, plays a key role in enhancing the consumer experience, boosting brand exposure, influencing purchase decisions in real time, and enabling data collection and analysis. Together, these benefits drive the overall growth and development of retail media.

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Digital vs. non-digital use cases of in-store advertising

In-store advertising comes in various forms, with some favoring digital applications and others leaning toward physical approaches. So, which option is better suited for your marketing campaign?

Digital formats

Digital in-store advertising offers dynamic and highly interactive solutions. Here are some popular digital options:

• Digital Screens/DOOH (Digital Out-of-Home): DOOH and digital screens showcasing ads and marketing content are among the fastest-growing advertising formats. When placed near checkout areas in retail stores, the dynamic nature of digital screens makes ads more engaging, capturing shoppers’ attention. Additionally, content can be easily updated to reflect the latest promotions, products, or brand messages.

• Interactive Kiosks: These allow consumers to interact with brands, access additional product information, and even place orders directly in-store. For instance, 7-Eleven’s iBon kiosks offer diverse services, such as concert ticket purchases or game point redemptions, enabling advertisements to reach customers during their usage of the kiosks.

• Mobile Beacons: These devices can send targeted ads and offers to shoppers’ smartphones as they move through the store, creating a personalized shopping experience.

Non-digital formats

While traditional in-store advertising methods have been around for many years, they remain highly effective. Here are some time-tested non-digital options:

• Print Materials: These include posters, banners, and shelf talkers. Visually impactful, they are ideal for promoting discounts or new products and appeal to shoppers of all ages. Customers can immediately spot ongoing promotions or featured items as soon as they walk into the store.

• Product Sampling and Demonstrations: Allowing customers to try products before purchasing is a powerful sales driver. Being able to touch, test, or taste products, coupled with assistance from sales staff, makes this approach highly persuasive.

• Floor Decals: Eye-catching graphics on the floor can guide shoppers to specific products or promotions, subtly influencing their shopping path.

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Potential barriers to the development of in-store advertising

• Over-Saturation:
  As more brands invest in in-store advertising, there is a risk of oversaturation. This can lead to consumer fatigue and diminish the impact of individual messages. To maintain consumer engagement, it is crucial to ensure that advertising campaigns are timely and relevant to the audience.

• Challenges in Data Tracking:
  While in-store media is highly effective, measuring its impact can sometimes be challenging. Brands need to establish clear key performance indicators (KPIs) and utilize technologies such as QR codes or loyalty apps to accurately track conversion rates.

• Creative Limitations:
  The time and space available for displaying messages on in-store media screens are often limited, making it challenging to convey complex concepts. In this fast-paced environment, simplicity and clarity are key to capturing consumer attention effectively.

Challenges faced by in-store advertising

Measuring the effectiveness of in-store advertising has long been a challenge for advertisers.

Unlike digital advertising, where clicks and conversions are relatively easy to track, in-store campaigns often lack precise metrics. How can one determine if an eye-catching display truly led to sales? Did floor decals influence customers to choose a specific brand? These uncertainties make it difficult to measure the success of in-store advertising with confidence.

However, the landscape is changing. Advances in technology are rapidly bridging this gap, making it easier than ever to track and analyze the performance of in-store ads. New tools now enable better tracking of customer behavior and ad effectiveness:

• Smart Sensors and Cameras: These devices monitor foot traffic and capture customer movement data within stores. They provide insights into which ads captured customer attention, allowing brands to analyze performance more effectively.

• RFID and Bluetooth Beacons: These technologies track when customers interact with specific products, offering a clearer picture of ad impact.

• POS Data Integration: Combining point-of-sale data with in-store advertising campaigns helps link ad exposure to actual purchases, bridging the gap between discovery and purchase.

We are also witnessing the growth of data-driven in-store advertising, with more retailers investing in this area.

Leveraging first-party data to support in-store advertising

With the rise of online retail media networks, retailers can now utilize first-party data to enhance in-store campaigns:

• Customer Loyalty Programs: Data collected from loyalty programs can be used to tailor in-store ads for VIPs and repeat customers, creating a personalized experience. Customers can feel specially catered to when they encounter ads closely aligned with their needs every time they visit the store.

• Personalized Discounts and Offers: By leveraging first-party data, retailers can deliver exclusive discounts or promotions tailored to individual shopping preferences. For example, they could send deals on specific product categories or provide threshold-based discounts directly to customers’ phones, enhancing the shopping experience and driving sales.

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How can retail media work with in-store advertising?

Perhaps the best way to think of in-store retail media is as the physical counterpart to online retail media. It resembles traditional in-store advertising or digital out-of-home (DOOH) ads but with a key difference: it leverages customer data for real-time analysis and precise audience targeting.

Although in-store retail media is still an emerging channel, we’re already seeing innovative advertising formats such as digital screens above shelves, self-scanning devices, and even self-checkout screens.

Because retail media is fundamentally data-driven, in-store retail media can use insights from loyalty programs to create personalized ads for specific customer segments. This targeted approach ensures that the right message is delivered to the right customer at the right time, maximizing the effectiveness of retail media advertising.

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3 Reasons to integrate in-store advertising into retail media

1. Consumer-centric strategy for personalized in-store precision marketing

Creating a memorable retail experience requires more than just a top-tier e-commerce platform (though it’s a great foundation for building a retail media network). By integrating various in-store media channels, retailers can use relevant content to enhance the personalization of the shopping journey, capturing attention and increasing conversion rates.

Enhancing customer engagement and loyalty

By leveraging first-party data, retailers can customize in-store advertisements based on individual preferences, enriching the shopping experience and making customers feel valued. Integrating in-store media with a retail media network ensures consistent messaging across channels, presenting a unified brand image that meets customer needs and fosters trust and loyalty.

For example, a clothing retailer might notify a loyal customer via mobile about an exclusive showcase featuring items similar to their past purchases. In-store digital screens could display related outfit suggestions, exclusive discounts, and styling tips. Simultaneously, interactive kiosks might allow customers to check reward points, redeem perks, and leave feedback, increasing engagement and generating valuable insights for the brand.

Higher conversion rates and sales growth

According to a 2024 U.S. survey by Deloitte Digital, nearly three-quarters of consumers are more likely to purchase from brands that offer personalized experiences, spending 37% more on average with such brands. Additionally, over one-third of Gen Z consumers say their preferred way to receive personalized marketing is through in-store interactions.

Imagine a customer entering a supermarket and approaching the dairy aisle. A digital screen activates, displaying a promotional message for a new yogurt brand. The ad, tailored in real-time based on overstocked inventory and the customer’s frequent yogurt purchases, highlights a limited-time discount and the health benefits of the product. Drawn by the ad, the customer adds the yogurt to their cart, enjoying the special price. The store not only clears excess stock but also boosts the customer’s total spend and satisfaction.

2. Integrating real-time data to enhance measurement and optimization

Real-time data has revolutionized how advertising performance is measured, providing instant insights into customer interactions and campaign results. Integrating in-store media with retail media networks allows for the tracking of effective strategies and on-the-spot adjustments, ensuring precision and relevance in marketing efforts. For example, if a particular in-store promotion underperforms, you can quickly update content, change display placements, or modify the offer. This flexibility ensures campaigns align with customer preferences and market trends while leveraging A/B testing to refine strategies further.

Take Walmart as an example. They use in-store sensors and AI technology to adjust digital screen content based on customer traffic patterns, ensuring the most relevant ads are displayed during peak hours. This real-time responsiveness enables Walmart to adapt quickly to market changes and customer needs, optimizing pricing and promotions for maximum profitability. According to a 2023 AIScreen case study, Walmart saw a 50% improvement in promotional effectiveness and a 30% increase in customer wayfinding efficiency after integrating digital signage.

3. Unifying data sources to unlock new revenue 0pportunities

Integrating data sources across the retail media network unlocks additional revenue potential. By combining in-store advertising data with insights from online behavior, purchase history, and customer demographics, you gain a comprehensive understanding of consumer needs. This 360-degree perspective enables the creation of highly targeted advertising strategies that attract brand partners seeking to engage specific audiences.

With unified data, you can also develop innovative cross-channel marketing campaigns that merge in-store and online experiences. For instance, you could offer brands opportunities to execute coordinated campaigns, aligning in-store promotions with online ads, email marketing, and social media interactions. This multi-channel approach ensures message consistency, amplifies campaign impact, and drives higher engagement and conversion rates. The high efficiency of such integrated campaigns further attracts brands to invest in your retail media network, generating additional revenue streams.

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How to measure the success of in-store advertising?

Unlike digital channels, where performance can be tracked and attributed in real time, measuring the impact of in-store advertising and activations can be more challenging. So, how can retailers or advertisers evaluate their effectiveness?

Here are some key KPIs to consider if you plan to expand advertising efforts to in-store environments:

• Foot Traffic: Track the number of customers entering the store and those near specific in-store advertisements.

• Dwell Time: Measure the amount of time customers spend in front of a specific in-store ad or display.

• Conversion Rate: Monitor the percentage of customers who make a purchase after interacting with the advertisement.

• Sales Uplift: Compare sales data before and after the campaign to determine the increase in product sales.

• Customer Engagement: Use surveys or loyalty program data to assess customer interactions with the ad and their satisfaction levels.

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Is in-store advertising good for non-endemic brands?

It’s a common assumption that in-store advertising is only for brands whose products are sold in the store, and while this seems logical, it’s not entirely true. Brands without stocked products can also achieve success through in-store retail media or other advertising methods.

For instance, consider a travel brand running ads in a hypermarket. At first glance, this might seem unrelated but given the store’s high foot traffic—with hundreds or thousands of potential customers passing through daily—the opportunity becomes clear. Many shoppers are mentally planning their next trip while shopping. A travel brand ad, even without relevant products sold in-store, can gain valuable exposure. Seeing these ads in a familiar environment increases the likelihood that shoppers will remember the brand later. The ads can even strategically appear near relevant items like sunscreen or luggage to amplify impact.

Additionally, we must not overlook the power of data in enhancing ad performance. As in-store retail media evolves, advertisers and brands can more precisely target their audience and measure results. For example, while a fitness app might not have a physical product to sell in a supermarket, ads displayed in that setting could still attract health-conscious shoppers looking for a new fitness plan. In-store advertising offers unique opportunities for brands to engage with their target audience in unexpected yet impactful ways.