There are two things a retailer has to offer brands; mind-share and shelf-space.
Online retailers like Amazon and more offline retailers like Kroger offer the same things to brands; Mind-share – they want to be first-in-mind when a shopper has a shopping need. And then they have shelf space. Shelf space for online retailers is basically infinite. And for physical retailers it is a more limited supply of space; in their center aisles, cold cases, and other displays.
What physical retail and online retail have in common then, is the desire to be first in mind for different shopping needs. Many physical retailers, especially in the grocery category, are first in mind-share – they may be the closest retailer to shoppers in their market. So, they are first-in-mind when a consumer needs to plan, say, dinner, and can sell access to their customers. Through various in-store advertising programs, or charging for shelf space (slotting) or seasonal merchandise displays (end-caps), etc. This is no different than Amazon charging merchants for ads to rank high in an answer to a consumer’s search term.
Traffic, Attention and Proximity
The common themes are traffic, attention, and proximity. Being the first solution shoppers think about when they have a particular need, and providing enough variety of brands to solve that shopping need.
Read more about the importance of location and attention and how they operate in similar ways, in online and offline retail, in our upcoming new eBook, “Location, Proximity and Attention.“