Despite the rise of digital shopping, brick-and-mortar still dominates retail. This makes in-store digital advertising attractive for marketers, but a new EMARKETER and Placer.ai study reveals critical disconnects between marketers' assumptions and consumer reality.

“There is ample evidence that consumers are being influenced by in-store advertising and this should only deepen excitement around the channel’s potential,” said Placer.ai CMO Ethan Chernofsky. “Yet gaps between the perceptions of marketers and consumers, and even between consumer expectations and their own behavior provide powerful indications of how this rising channel can be utilized to the fullest.”

By studying consumer shopping habits while preserving the in-store experience, brands can better leverage in-store advertising.

Marketers are overconfident in in-store advertising, but consumers downplay their influence

Only 38.6% of consumers find in-store digital ads helpful, though marketers estimate 52.5% would, per the report.

Consumers may not admit their impact, but they’re influenced by in-store digital advertising. While only 24.5% say they’d make unplanned purchases after seeing an in-store ad, 48.6% report actually doing so.

Marketers should consider how their in-store messaging improves the consumer’s shopping experience—instead of just convincing them to add more to their carts—to maintain customer loyalty.

“At the end of the day, consumers in the store are going to be exposed to all sorts of ‘noise,’ so ensuring marketers understand the reason behind their activation will help reduce these perception gaps," said our analyst Suzy Davidkhanian.

Balancing value and full-funnel engagement

Marketers and consumers are confident that value-driven messaging works.

75.5% of marketers say discounts, sales, or special offers most influence consumers, per the report, and 53.9% of consumers said those offers are most likely to motivate them to purchase a product they weren't intending to buy due to in-store ads.

"A promotional component when intent is already high helps drive discovery and potentially bigger basket size,” said Davidkhanian.

While discounts remain the strongest motivator, heightened consumer engagement can come from other interactions throughout the funnel, said Chernofsky.

“Value-based messaging, like emphasizing deals or promotions, is important, but the perspective is limited,” he said, emphasizing the potential for non-endemic advertising. “For the full value of in-store advertising to be unlocked, marketers need to embrace the long-term effect that it is having on consumers. This isn’t just an increase in the power of the channel but a powerful widening of who can and should take part.”

Preserving the in-store experience

When marketers overemphasize discounts, they can miss out on meaningful in-store outreach. Consumers rank product demonstrations and samples as the second-most influential in-store advertising, yet marketers rank these sixth in perceived effectiveness, according to the report.

“There are a lot of different ways you can think about advertising in the form of brand-building that is at the store level," said Davidkhaninan, who mentioned samples and personalized coupons attached to receipts to encourage return visits.

In-store advertising has high growth potential as brick-and-mortar shopping dominates, but it comes with barriers that some retailers may not be ready to tackle.

• Some 38.8% of marketers cite infrastructure and capital investment as the primary barrier, while 19.6% identify fragmented networks limiting impact as a challenge, according to the study.

"Retailers should first make sure they have a strong, well-curated in-store experience,” said Davidkhanian. “Advertising can definitely enhance the store experience, but it can also be very costly to outfit stores with screens."

Read the full report.

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