Do In-Store TV Networks Really Sell Product?

(MoneyWatch)  Discount giant Dollar General will roll out an in-store TV network in 2,100 stores this spring and summer. As reported by the In-Store Marketing Institute, "DGTV" differentiates itself from other in-store broadcasts by integrating its promotional content with the store's website, signage, circulars, e-mails, and even a "treasure chest" kids can hunt for.

But do in-store networks really drive sales? It's not likely, says in-store behavior expert Herb Sorenson, who posted a sobering bit of analysis in a discussion about DGTV on RetailWire.com (free registration required). "Adding anything to the store that is already saturated with 'media' can't have a large effect," Sorenson writes. In a typical supermarket with 12,000 shoppers a week, he calculates 12 million "shopper seconds" or marketing exposures per week. "Of those, something like 7 million will be attributed to some commercial messaging, the predominant form of which is product packaging, " he points out. "Given the number of SKUs in a typical store, this means that the average SKU gets about 200 exposures per week!!!" In other words, every second customers spend watching TV about Huggies is a second not spent putting Huggies in their cart.

The return is even lower for Dollar General outlets, which at 6,900 square feet are less than half the size of a typical grocery store. If the network is a bust, Dollar General will know pretty soon. Once rollout is complete, the company will test its effect on advertised products in 1,000 stores -- half TV-enabled, half not.