Here in Colorado, July and August are pretty active months for thunderstorms. Clouds that congregate over the mountains get heated by the strong summer sun and soon kick off into full-blown thunderstorms that gather strength as they speed across the plains. Living close to the foothills, my afternoons (when I actually get to spend time at home!) are often punctuated by that first flash and crack, which rolls in booming waves across the mountains. What does this have to do with retail? Quite a lot, actually.

There are very few lightning bolts that strike the retail landscape (the industry is much more evolutionary than revolutionary), but when they hit, the thunder they leave in their wakes can be heard for miles. RFID is one such example -- it's clearly going to have impact, but that storm has been a long time brewing, and its path across the world of retail has been pretty slow. In-store media is another example, but it's still not clear how big of a storm it will be -- or how fast it will travel. Are there thunderstorms in our future? When predicting the weather, we look for things like weather fronts, humidity, and high temperatures. For in-store media, our predictors include:

• Consumers. As more tools are available to block ads, consumers' willingness to pay attention to ads has decreased: Between September 2002 and June 2004, 40% fewer consumers agree that ads are a good way to learn about new products, 59% fewer say they buy products because of ads, and 49% fewer find ads entertaining. Alternatively, ad recall as measured by Nielsen for Wal-Mart's in-store TV network is 65%, compared with a paltry 23% average for in-home viewing. Under these conditions, it's clear that the industry needs more targeted ways to reach these ad-dodging consumers at the point of purchase.

• Retailers. Desperate for differentiation and wanting new ways to build better relationships with consumers, retailers are looking to maximize every communication channel with their customers, including at the shelf. Throw in customers' increasing propensity to shop across channels and leverage technology in the shopping experience, and you have ideal conditions for shelf-level technology that can bring elements of the online shopping experience -- like interactive comparisons, product-related health info, and product features -- into the store. And it doesn't hurt that the business case from ad revenues alone will easily justify the investment.

• Manufacturers. Finally, a win-win opportunity exists for both retailers and manufacturers -- two groups historically at odds with each other about "owning" the consumer. Retailers still control the shelf, but manufacturers now have an opportunity to reach consumers when they are most receptive to advertising messages -- and when they are most ready to act on those messages. Add in the significant side benefit of a deeper understanding of consumer behavior at the shelf, and it's no wonder that manufacturers are reducing their traditional TV advertising and actively seeking new communication methods that center on the store.

Research Referenced In This Issue Consumer-Focused Innovation (36181)    Digital Signage Grows Up (37270) Expanding TV's Reach To The Retail Point Of Sale (37045) Pruning The Pricing Landscape: Much More To Come (37455) Q2 2005 Online Sales: Surprisingly Strong (37494) Retail Gets Ready For In-Store Analytics (36884) Technology For Taking eCommerce Sales Abroad (37375) The Advertising Model For Video On-Demand (35144)    The Consumer Advertising Backlash Worsens (35123) The Web's Latest Trend: Fashion (37531)

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