Above
Opening and run-
ning monobrand
boutiques like this
Hublot showroom
on London’s Bond
Street is expensive
and often loss-mak-
ing on a P&L , but
assigning a value to
its marketing im-
pact may justify the
investment.But, as any marketer today will
attest, the digital landscape has
rapidly become a very crowded
place. Case in point; a recent US study
by Merkle, showed that while 2018
digital marketing spending increased
by a whopping 34% and cost per
click increased by 30%, the result
was a mere 3% increase in actual
clicks. We’ve clearly reached a point
of diminishing returns on digital ad
spend, as consumers swim in a never-
ending river of digital content, much
of which excludes marketers entirely.
And even if you could easily reach
consumers through digital channels,
the measures used to evaluate
media effect have always been a
little squishy. If someone watches 15
seconds of a 30 second pre-roll ad on
YouTube is that really a meaningful
“impression” and if it is, what’s it really
worth to your brand? So, while people
are indeed gathering online, reaching
them and doing so in a meaningful
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Yet, there is another place where
people today are gathering, much as
they did a thousand years ago. That
place is physical retail stores. In fact,
when I’m asked where the best stores
are, in New York, L.A. or London
for example, I usually respond by
recommending people simply strap
on their runners, take to the streets
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them. Around the world each day
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stores of brands that that are making
it worth the trip. In New York, it’s notunusual to see line-ups at Glossier,
Supreme and Kith. As far away as
Melbourne, thousands of shoppers
packed into a mall for the debut of
Sneaker Boy, a growing chain of
new-era footwear stores. On a recent
trip to Tokyo I witnessed throngs of
young shoppers waiting breathlessly
outside cool retail stores in Harajuku
and Shibuya.
Physical retail stores are not only
a powerful media channel; I’d go
so far as to argue that they’re now
the most manageable, tangible
and measurable media channel
available to a brand. Unlike digital
media where the consumer’s true
level of interest or engagement
can be debatable, a physical store
can validate the consumer’s actual
physical presence and participation
in the experience. We can connect
directly and intimately with them.
And, increasingly, we can measure
the causal outcome of that physical
experience.
And so, it’s my belief that the key
to effectively measuring the true
productivity of a store is found by
focusing on a metric we’re already
quite familiar with from the marketing
side of the industry but until now
have never applied to physical stores.
The key metric is establishing a value
per physical media impression.
By illustration, I was speaking
recently with the Chief Marketer for a
major beauty company that operates
more than two dozen brands within
its house. I asked him how many
consumers per year he estimated
visited their various branded physical
store locations. He guessed roughly
80 million per year. Next, I asked
how much he felt it might cost – as
a ballpark estimate – to engage a
Madison Avenue advertising agency
to target 80 million consumers per
year but not merely with a 30 second
pre-roll ad on Facebook or a series
of sponsored posts on Instagram,
but with a prolonged (say 20 minute)
immersive media experience. A
media experience that would allow
that consumer to truly internalize
your brand story, to understand your
products and to begin to feel a part
of your community. In other wordsof onlie sales within surrounding
markets to stores in those markets.
And while this gets us a little closer to
recognizing the value of a store, this
too is speculative at best and fails to
tell the whole story about a store’s
contribution to the chain.
There is however, another far
more relevant, concrete metric that,
if reasonably measured, provides a
far more complete view of a store’s
actual contribution. In fact, in the
not-so-distant future, I believe this
one metric may ultimately be the
only metric that will matter. It applies
to department stores, multibrand
jewellers and monobrand boutiques.
The key metric companies should
use is each store’s media value.
Through the ages media has
always been effective wherever
people gather in numbers. A
thousand years ago that gathering
place was the market bazaar, where
people socialized, gathered news and
information and of course, discovered
merchants and must-have products.
Then, the printed word became
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distribution and newsprint dominated.
Radio then allowed for new levels
of both immediacy and reach. Soon
after, television became the primary
gathering place where consumers
received their information. And
today, digital channels have largely
supplanted all others as the primary
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know what’s happening, what’s new
and what’s next.28 WATCHPRO / AUGUST 2019 / watchpro.com
INSIGHT / REENGINEERING RETAIL