2011 Wrap-Up: Five Golden Insights
We’d like to “wrap up” 2011 by sharing five shopper insight fundamentals we’ve found to make an impact over the years. In our tradition of virtual shopping research, they ring true across categories, retailers and shoppers – to impact decisions where decisions are made.
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Insight #1:
Lead With Large
Making products easier to find increases the chance for conversion. |
Most shoppers are on a mission at the store: get in and get out as quickly as possible! Grocery shopping is a chore, not a relaxing experience. So, making products easier to find increases the chance for conversion, particularly for low involvement decision categories. Placing broad interest, high margin items where the shopper enters the aisle will drive sales for them, leading to stronger profitability.
For example, a well-known manufacturer introduced a new larger-sized version of its flagship brands. The line performed extremely well in concept and home use tests. But when it was introduced in the store, it was placed in the middle of the aisle and the expected trial never materialized. After virtually testing several new aisle locations, it became apparent that leading the aisle is the strongest, with promise to dramatically increase sales. The aisles were quickly reset in the real world and sales not only rebounded, they increased by double-digits.
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Insight #2:
Promote big or don’t promote at all
Shoppers have been trained to look for a deal – retailers and manufacturers often misinterpret that notion. |
Traditional consumer research indicates a desire for smaller, less expensive product options, leading many manufacturers to introduce “value” options – with reduced package sizes and price, etc. But, while our research often confirms that shoppers do buy those smaller options when offered… it also reveals that these are not NEW shoppers buying the products. Instead, they are EXISTING buyers simply
trading down. Without bringing
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new buyers to the brand, manufacturers are losing revenue.
Conversely, consumers will often say they don’t want larger sizes. But we have seen over and over that introducing – or promoting – larger sizes increases revenue. Shoppers will see the value and stock up. |
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Insight #3:
Bigger Assortments are not Better Assortments
SKU rationalization is a good thing, to a point. But watch out: cutting 10-20% can be beneficial; more than 20% can be detrimental. |
SKU rationalization can be a cost saving for manufacturers and increase shoppability by not overburdening shoppers with too many choices. Reducing the number of SKUs can even grow the category.
But it needs to be done systematically to identify the right balance. Merely eliminating the lowest turning SKUs can be disastrous – potentially alienating current users and declining retailer loyalty for those that walk-away. Alternative assortments need to be identified and evaluated with shoppers first. In the bakery category, we tested several alternative assortments – one with quite extreme adjustment. We knew we hit the limit when both revenue and shopper satisfaction declined.
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Insight #4:
Playing with Packaging is a dangerous game
The danger… new packaging is more likely to damage sales than improve sales. |
Packaging is an important marketing vehicle. It communicates your brand message to shoppers, all day every day, at the point of purchase. While a powerful medium to capture shoppers’ attention, be careful when considering updates to freshen and enhance current package treatments. New packaging is more likely to damage sales initially, with products getting lost on the shelf or communicating the wrong messages.
A decade of package testing has demonstrated the importance of understanding the four key measures of success (sales, shelf presence, brand messaging, appeal).
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Manufacturers increase the odds of success by testing among shoppers to measure impact of the new package on the shelf in a competitive context, and optimize the offering before making the investment. |
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Insight #5:
Put new products in their place
Where you locate a product on the shelf has a huge impact on sales and –ultimately– how it is perceived by shoppers |
Many new products use the parent brand name to more quickly build awareness, credibility and trial. So, a key question is often: Should the new line be located next to the parent or placed near its most direct competitors? While placement with the parent brand can be advantageous, we want to minimize any cannibalization from the parent brand.
The answer depends on the category and its dynamics, making it important to test alternative locations prior to market introduction. For instance, we determined that better-for-you pastas should be located adjacent to their parent brands. The positive halo of the parent brand name alleviates concerns that the better-for-you products will not taste good or please the family. On the other hand, single-serve ice cream cups belong in a dedicated section to create critical mass for the sub-category, encouraging variety seeking and stocking up.
We wish you all a joyous holiday season and a prosperous 2012!
For your next RFP,
please contact Leslie Downie or call 816-221-0445 x215. |
