CHALLENGE:
In-store sample can drive a one-day spike in sales, but is it worth the bother? Does in-store product sampling have any lasting effects on consumer shopping behavior? Does a relationship exist between sampling and brand franchise sales? What about between sampling and total basket size? New research suggests in-store sampling leads to gains not only in same day sales but also in long-term purchasing habits, brand franchise sales, and even total basket size of the average shopper.
HOW THEY RESEARCHED IT:
PromoWorks partnered with Knowledge Networks/PDI to run three in-store sampling procedures for a new product launch, a line extension (adding a new flavor to an existing product line), and a newly packaged existing product. The number of shoppers in each procedure was 3,000, 15,000, and 30,000 respectively. KN/PDI used extensive data from the National Shopper Lab (NSL) to create control groups and test groups for each procedure. Both groups regularly shopped at the supermarket chain in which the sampling took place and had not purchased the sampled product in the past year. The test group was known to have been present when the sampling took place whereas the control group was not in the store during the sampling, but had recently shopped at the grocery chain. The purchasing habits of the households in the study were observed for twenty weeks following the sampling and the results were adjusted using an Analysis of Covariance to reach a 99% significance level.
WHAT HAPPENED?
Same day sales of the sampled products increased 475% on average, in line with both researchers’ expectations as well as past studies. More importantly a long term effect was revealed, showing that the average cumulative trial for the sampled products was 58% higher for the test groups than the control groups, even 20 weeks after the initial sampling. These results indicate that sampling is an effective way to drive first-time product purchases over an extended period of time.
The study also reported an average cumulative repeat purchase volume of 11% higher for the test group than the control group. Not only did the customers exposed to the in-store sample buy more of the sampled products initially, they also continued to purchase the products more than their counterparts who did not experience the sampling.
Sampling of brand new products were expected to generate buzz and result in increased sales, which they did. Somewhat surprisingly however, the line extensions and existing product samplings were also highly successful. The sales increase for line extension products was 919% on the day of the event, and 107% after the 20 week period. The existing product sales increase was 177% on the day of the event and 57% after the 20 week period.
Sampled products also led to sales increases in entire brand franchises. For example, sampling bags of Fritos in a store is likely to lead not only to higher Fritos sales but also higher sales for other Frito Lay products. For all of the sampled items there was an average sales lift of 107% on the event day and a 21% average sales lift over the 20 week period. The average cumulative trial for the brand franchise was a net gain of 19%. In-store sampling can also create new buyers for both products and brands – the average cumulative new buyers for the sampled items were 85% and 23% for the brand.
Finally, the study also shows that in-store sampling can have a positive effect on total shopping basket size. Following the sampling event, the test groups’ overall shopping spending increased 10% compared to the amount spent by the average frequent shopper at the retailer.
WHY MANAGERS SHOULD CARE:
This study opens up the possibilities of in-store sampling beyond the traditional new product launches it has been used for in the past. Managers should concentrate on increasing sales for large brand franchises over time, and even re-launching products which have proven successful in the past.
Grocery chains are not the only retailers who can practice in-store sampling – with results such as increased total basket size as well as higher brand sales it suggests other businesses might use sampling with their products. Industries that already have strong loyalty programs in place, such as cell phone companies and airlines, have the added benefit of being able to track the effects of sampling much like the grocery chains have done. For example, cell phone carriers could provide a trial period wherein consumers could use all the functions available on the latest phone at a discounted price and then monitor the sales results following the trial period. Airlines might offer “platinum” benefits to targeted travelers when first-class seats are open even if the traveler doesn’t qualify.
CAN YOU HELP?
Comment back by sharing ways in which you have implemented in-store sampling outside of the CPG area and what sales have resulted.
A copy of this report may be downloaded at Source: PromoWorks, http://www.promoworks.com/source/default.asp
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