Magazines Archives - 2009 March

Thai retailers know the value of displays
Story 4 - Focus

Thai retailers have much to grapple with these days, what with the global economic crisis, and internal political instability, massive job cuts and weak consumer sentiment. Faced with dwindling budgets and a bearish market, they are likely to cut back a lot on advertising — but not in all media. After all, they know the value of digital displays and signages.

Thai retailers, like their counterparts in the region, recognise the benefits of soft-selling. Subtle but informative signs do much to en- Ttice shoppers to check out the store’s offerings, and retailers have become creative in coming up with displays that could contribute to store footfall.

As Thailand grapples not only with the impact of the global economic downturn but also the domestic political turmoil and dwindling tourist dollars, its retailers have been dealt with severe blows and can ill afford to spend too much on costly advertising.

Given the current adverse environment, Siam City Research Centre estimates advertising spending this year to drop by 4%, with TV, the most expensive medium, being the hardest hit.

And, in the face of a possible economic contraction this year, the Thai Retailers Association, which was earlier confident of a moderate growth in 2009, now pegs a 3% limit to sales growth, if any.

Central Group, one of the largest mall developers in the country, has already deferred its billion-baht domestic investment on the construction of two malls.

Other retailers have also announced cut-backs on advertising in traditional media and are looking at ways to reach shoppers directly.

“Basically, consumers, whose confidence has dropped, are more worried [about] their ... future,” notes a Kasikorn Research Center analyst.

With consumers opting to hold on to their money in the midst of factory closures and lay-offs, “many malls are facing lower sales” not seen for the past few years, she says.

In a situation where budgets are strained and consumers are not spending, retailers have no choice but to come up with new and cheaper ways to attract customers, the analyst observes.

While traditional media will likely suffer this year from the impact of companies’ trimmed budgets, media that entail less cost and yet can prove to be at least as effective as traditional channels will thrive, she predicts.

Alternative advertising media
Thai retailers, for instance, are now using the space within and around their premises for advertisements. They have exploited the use of walls, ceilings, pillars, lifts and trolleys for advertising, with posters taking up much of these spaces.

Posters and promotional materials are also featured prominently at display areas inside retail shops to give customers insights into products and services at points of purchase (POPs).

Even the walls outside retailers’ premises, especially in larger shopping malls, are not spared from more posters, mostly featuring models and celebrities posing with certain products to draw customers.

And, according to the research centre’s analyst, retailers located near the Bangkok Mass Transit System (BTS) SkyTrain’s tracks or stations are also taking advantage of the avenue these offer.

Facing the BTS Siam Station, for instance, is Siam Paragon, one of the Thai capital’s most luxurious malls which uses the station’s ample space to put up billboards featuring its upcoming promotions and other goods it retails.

Pedestrian bridges linking malls to such stations or other nearby shopping areas are used as well to display advertisements, as seen in the proximity of the MBK Center, a popular mall.

Adapting to shift in shop design
Signages and displays have also adapted to the shift in shop designs. Unlike in the past where shops were walled in, most of today’s stores, regardless of size, feature transparent glass panels that allow customers to look inside anytime.

These panels, too, sport posters pushing the store’s products or announcing a sale.

Payment receipts are also used by retailers to advertise their products alongside details of the transaction and payment posted.

And then there are digital displays.

Payment counters, traditionally a venue for cash-and-credit transactions, have also become silent sellers: Nearly all modern retailers are using high-technology payment machines and screens, which are being deployed to promote their products and services in a move that has become almost automatic for retailers.

Promotions pop up in these devices while payments are being processed, providing shoppers with information and entertainment.

Small TV screens showing product demonstrations are also a common sight on the Thai retail scene nowadays.

Central World, the largest mall in Thailand, is a firm believer in the revenue contribution of digital displays, on which it has invested heavily.

A Central World executive observes that the digital signages showing contents or products and services on electronic screens act as an advertising network for both the mall and its 500 retail shops.

The executive maintains: “Such a system is very important as surveys have shown that the majority of visitors make their decisions to purchase when at the retail outlet itself.

“So, a well-designed [display] with attractive content and messages can lure [shoppers] to buy.”

This also enables retailers to stay ahead of their competitors, he says. While recognising that the technology requires a huge initial outlay and incurs a high maintenance cost, he is confident this will be offset by the medium’s advantage of immediacy and proximity to the products advertised.

“Not everyone watches or reads advertisements that retailers post on [regular] TV or in the newspapers. But when people see TV monitors in a particular location, they are easily attracted to these, and could immediately see and value the products or services [advertised],” the executive observes.

At Central World, there are digital screens outside and inside the complex, as well as screens with moving texts.These, the Central World official avers, make the mall more “lively and outstanding” than rival developments.

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