Does In-Store Marketing Work?

CHALLENGE:
The “first moment of truth,” a concept created and popularized by P&G has been the focus of many CPG firms in recent years. Do factors like shelf facings or shelf position have any impact? And impact on what? Attention? Brand evaluation? Interestingly, an experimental study suggests that facings have an impact on attention and brand evaluation, but the optimal impact depends on such factors as usage frequency, brand share, and consumer characteristics. And that top and middle shelf positions generate more attention than lower shelf positions, but shelf position does not reinforce brand evaluation.
HOW THEY RESEARCHED IT:
Marketing researchers, with assistance from Perception Research Services Inc., created an eye-tracking study to observe the impact of both in-store and out-of-store factors on consumer purchasing behavior. The study divided purchasing behavior into five primary categories, including noting, reexamination, recall, consideration, and choice. Participants included 384 adults, resulting in a total of 8,304 observations. Shoppers were asked to review images of traditional supermarket shelves filled with twelve different products. The product placement, prices, and shelf facings varied so as to discover their effects on consumer attention and evaluation. The two sets of product categories used were soaps and pain relievers and the shoppers were divided into two groups – choice versus consideration oriented. During the initial part of the survey eye-tracking technology monitored and recorded the time each shopper spent looking at specific products and during the later customers answered questions regarding previous brand usage, shopping habits, and individual characteristics.

WHAT HAPPENED?
Increased shelf facings significantly influence consumer attention, and through attention, effect brand evaluation. For the average brand and consumer, doubling the number of shelf facings raised noting by 28%, reexamination by 35%, and both choice and consideration by 10%. Brands with low-market share are more responsive to shelf facing increases because the public is less saturated with outside information about the brand, and thus more likely to be affected by in-store advertising and promotion.
Position of shelf facings influences consumer attention but does not necessarily lead to a specific result in consumer evaluation. Horizontal placement has an effect on customer attention with a raised awareness only of products placed in the center of a shelf. This increase is partially attributable to the fact that customers are likely to look over the center of the aisle more often while viewing products on both the left and right sides. Additionally, products in the center of the shelf are viewed more often but for less time. Products placed in the center increased noting by 22% and choice by 17%, however all evaluation gains came from attention and direct effects on evaluation were negative. Vertical placement has a more substantial effect on brand evaluation; brands placed on the top shelf versus the bottom increased noting by 17% and choice by 20%, with 36% of gains from brand evaluation coming from attention. The results support the findings of earlier studies that items with more value and prestige are placed on higher shelves. The takeaway is the significant distinction between attention and brand evaluation, especially in the case of vertical placement where higher or lower placement helps influence the ensuing brand evaluation either positively or negatively
In-Store marketing has a noticeable effect on visual attention but a significantly smaller impact on higher-order stages of the decision-making process such as recall, consideration, and ultimately choice. However the positive impact in-store marketing has on evaluation is highly reliable. Out-of-store factors such as consumer brand usage, shopping traits, and market share have a much higher effect on evaluation.
Price did not play a significant role amongst most consumers; discounted and standard prices were viewed and recalled approximately the same amount of times. Price had a small affect on the two foreign products, in that without being discounted they were never recalled by consumers.
Who to target: In-store marketing is much more effective on younger, better educated, and “opportunistic” shoppers. Past studies concur that these shoppers are more prone to impulse buys and so have a greater susceptibility to in-store advertising. The shoppers were also divided based on questions at the end of the survey into the categories “brand shopper”, “value shopper”, and “price shopper”. “Value shoppers”, or rather those most willing to exchange brand names for price, are the most easily influenced by in-store marketing.
WHY MANAGERS SHOULD CARE?
The research findings suggest that in-store sampling is not the most effective way for businesses to blow the competition out of the water, however over time it can play an important role in marginal increases. Paying attention to product placement, especially in terms of shelf-height, and increasing the number shelf facings will eventually lead to gains. Products with low market share especially should focus on increasing shelf facings and premier placement as those are the products likely to gain the most from added in-store exposure.
On the other hand, managers should increase emphasis on out-of-store factors such as consumer brand usage, shopping habits, and market share as much as possible knowing that those are what really affect purchase decision making.
CAN YOU HELP?
Comment back on your REAL experiences. Is your actual sales consistent with these results?
This research is based on “Does In-Store Marketing Work? Effects of the Number and Position of Shelf Facings on Brand Attention and Evaluation at the Point of Purchase” by Pierre Chandon, J. Wesley Hutchinson, Eric T. Bradlow, and Scott H. Young in Journal of Marketing. Nov 2009. Vol. 73, Iss. 6; p. 1

Can In-Store Sampling Benefit Long-Term Sales Growth?

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