Pando

Quri launches Impact to help advertisers measure if the billions spent on in-store ads are working

By Michael Carney , written on October 1, 2014

From The News Desk

It’s shocking, in this day and age, how little visibility many advertisers have into their campaigns. Be it TV, print, or outdoor advertising, if it’s not digital, advertisers are really guessing at the impressions, and the resulting lift they’re getting from their advertising spend. But one of the biggest categories in all of offline advertising is about to get a major injection of intelligence.

Quri, a two-year-old retail intelligence startup, is launching its IMPACT product today with the goal of transforming retail execution, aka the way in-store promotions, displays, merchandising, and pricing are carried out to drive sales. IMPACT allows marketing departments to combine real-time sales data with in-store conditions data to calculate sales lift and ROI, creating a more complete picture of active in-store promotions than ever available in the industry.

The San Francisco company has long been known for its crowdsourced intelligence capabilities, having assembled an army of hundreds of thousands of individual shoppers and paying them to collect in-store data via its mobile app. These field agents capture photos of in-store displays, as well as complete surveys evaluating placement, visual impact, inventory levels, and other crucial, yet previously opaque factors.

As this data set has grown in size, Quri has built out increasingly sophisticated analytics tools to help retailers parse and draw insights from the data. For example, a CPG brand may learn that end-cap displays are exponentially more effective when coupled with a buy-one, get-one promotion, with increased sales more than offsetting the cost of such a discount program. Alternatively, end-cap displays might work in one market,while proving less effective in others, or one store may routinely fail to execute a particular campaign type according to plan. With hundreds of thousands of storefronts to monitor, CPG brands have always had only limited visibility into this nuanced data. Brands can now get granular insights into what strategies work in what markets, channels, and product categories and then make real-time adjustments based on this information.

“We can look at day one of a promotion and ask, ‘How's it tracking?’ and ‘What component is driving performance?,’” says Quri founder and CEO Justin Behar. “We can then make dynamic recommendations mid-cycle as to how to improve these results, or how to extend what’s working in one campaign across others.”

Research shows that 70 percent of shoppers make their purchase decisions while standing at the shelf. Which is why brands spend upwards of $1 trillion to shape the in-store consumer experience, typically the largest single item on the P&L. Shockingly, most brands see a negative ROI on this spending. But they continue to spend blindly out of fear that if they don’t, their competitors will, and the balance of power in the market will shift.

Quri hopes to change this narrative dramatically by making in-store promotion spending performance-based, and arming brands with the real-time data necessary to make adjustments to a campaign to increase effectiveness mid-cycle. Previously, brands had to wait until weeks after a campaign was completed to analyze the results, often guessing at the true impact, before applying these low-confidence learnings to next quarter’s or next year’s promotion.

Today, Quri has more than 70 CPG customers, including more than 90 percent of the Top 25 – a group that accounts for the overwhelming majority of sales in the industry. Unlike many other industries, CPG and overall retail sales have been surprisingly receptive to advances in technology such as inventory and supply chain management software, marketing automation, and other tools that offer decision-making intelligence. Likely, that’s because with razor thin margins, these companies currently spend astonishing sums of money just to eke out a modest profit. Even a small lift in sell-through, or a reduction in selling expense can dramatically improve this economic picture.

At the end of the day, Quri’s IMPACT product could lead to structural changes in the way that brands and retailers do business. For example, today brands pay hefty sums up front for the right to advertise in store, via campaigns like end-cap displays and special promotions. But there is no performance component to these agreements, which are often negotiated months in advance and can extend over multiple weeks or months once deployed. The only recourse a brand has is to elect not to renew the promotion next time if results are disappointing.

With real-time intelligence, brands and retailers may soon make terms more dynamic, adjusting pricing, placement, duration, and other factors mid-cycle and pricing the contract accordingly. Brands will gladly pay extra for this flexibility, in Behar’s estimation, if they also get the downside protection of being able to terminate or at least modify an underperforming campaign. The same could apply to the teams of third-party field agents that most CPGs contract with to execute these in store promotions. CPGs could soon pay more on an hourly basis for this labor, but only when stipulated performance benchmarks are met. This was never possible in the past because the industry lacked the transparency to effectively monitor such performance.

“We constantly ask ourselves, what elements of ecommerce can we bring into the brick and mortar world?” Behar says. “It would be unheard of for an online retailer to increase spending on Google keywords just because 10 people put a product in their basket today. They have so much more data to look at than that. But up until now, that’s effectively what the CPG world has been doing.”

Quri faces competition in the crowdsourced data collection segment of its business, most notably GigWalk and FieldAgent. But with today’s the release of IMPACT, the company has leapfrogged the competition in its ability to intelligently shape retail execution through real-time data and analytics. The company, which has grown to over 65 people, has raised $14.8 million from investors including Matrix Partners, Catamount Ventures, and Simon Equity Partners (an offshoot of Simon Property Group, the one of the world’s largest mall owners).

It’s staggering, given the rise of macro-trends like cloud-based business intelligence software, mobile, and crowdsourcing, that anyone would make major business decisions today without insight into the factors affecting those decisions. But in-store advertising is a multi-hundred billion dollar per year category that has effectively been flying blind for decades. With this in mind, Quri IMPACT and likely soon, other tools like it are the logical next step in the way these marketing dollars are deployed.