Big Bazaar looks to make Rs250 crore from in-store ads

Move to tap in-store ad revenues comes as parent Future Group is expanding its physical footprint across India

Kishore Biyani, founder and chief executive officer of Future Group. Photo: Mint
Kishore Biyani, founder and chief executive officer of Future Group. Photo: Mint

Bengaluru: Big Bazaar, India’s biggest hypermarket chain owned by Future Group, is hoping to more than double the revenue from in-store advertisements and brand promotions in the next two years to Rs.250 crore, a top company executive said.

Apart from 250 Big Bazaar and Fashion at Big Bazaar stores, Kishore Biyani’s Future Group also includes Ezone, Central and Hometown. The move to tap higher in-store ad revenues comes at a time when the group is expanding its physical footprint across the country. Big Bazaar currently generates Rs.100 crore from in-store advertisements and brand promotions.

“We feel this is the tipping point, wherein a lot of consumer companies are launching new products; so they need to advertise,” said Sadashiv Nayak, chief executive officer at Big Bazaar, part of Future Retail Ltd. “The underlying scale and size of format and number of stores becomes a good mix,” he added.

Big Bazaar already leases advertising space on facades, pillars, cash counters and display shelves across a typical store of 28,000-30,000 sq. ft. It is now opening up more such spaces—by installing small interactive screens called shelf-televisions—in aisles detailing product information, and activating a radio channel that will beam advertisements as shoppers walk across aisles, buying everything from household groceries to apparel.

In April, Future Group said it will open 20 new Big Bazaar stores, six to seven Central stores and 10 Brand Factory stores at a cost of Rs.500 crore in 2015-16. The group also plans to more than double the number of stores across its convenience format chains such as Big Apple, KB’s and the recently acquired Nilgiris from 350 to 750.

The proliferation of consumer products and services is helping the retail chain attract more clients Nayak said. As a result, “we are going back and informing more companies and we are seeing that more people are looking at brands seriously”, he added.

Taxi-hailing service Ola, luggage maker VIP Industries, lenders Axis Bank Ltd and Bank of Baroda, car maker Hyundai Motors and television group Zee are among the companies that have advertised at Big Bazaar stores. Its advertisers in smaller markets such as Shillong and Agartala include local real estate companies and tutorial classes.

Retailers across the world, such as Wal-Mart Stores Inc. and Target Corp., scrutinize shopping behaviour in supermarket aisles, suspecting shoppers are far more swayed by in-store promotions and advertisements than other forms of media. In India, Kolkata-based retailer Spencer’s lends out in-store space to promote new offers.

“What we believe is you get the customer at a time when they are actually spending; we have research that suggests that receptivity to catching an advertising message when you’re in the act of shopping is much higher than when you are viewing ads in a passive environment,” explains Nayak.

Kartik Sharma, managing director, South Asia, at media buying agency Maxus, said that the effectiveness of the medium will depend on how well brands can connect with the shoppers.

“There is ample reach that the medium will draw i.e. active shoppers, lots of them in a single space, but how willing are they to look at an advertisement and change shopping decisions—will depend on who advertises with them and how.”

Big Bazaar’s move comes even as more shoppers go online, changing the way retailers and brands associate with consumers. However, Nayak said online shopping was not a concern for Big Bazaar. “Our footfalls have been intact.” Big Bazaar started renting out space in its stores to brands in 2007, and added a dedicated team by 2011. More stores were opened to external advertisements in 2013.