By George Anderson, RetailWire
Editor’s Note: This article is an excerpt from one of RetailWire’s recent online discussions. Each business morning on RetailWire.com, retail industry executives get plugged in to the latest news and issues with key insights from a “BrainTrust” of retail industry experts.
As an AdAge.com article points out, it has become common for those in consumer products to state that 70% of all decisions on what brand to buy are made at the shelf. A new study from OgilvyAction contends that it’s time to throw out the old number and go with a new and lower one.
According to the study, 39.4% number is the real number of consumers who wait until they’re in a store before deciding what brand to buy. About 10% change their minds while in the store and 20% leave a product on the shelf that they intended to buy. Nearly 30% of consumers wind up making a purchase from a category that they didn’t intend to buy from before walking into a store.
“That 70% figure we’ve all heard over the years always sounded a little high, and we all know it’s a little high,” said Peter Hoyt, executive director of the In-Store Marketing Institute. “Some think it’s a lot high. I think what the Ogilvy study does effectively is help decompose [the data]. I think it’s closer to what we can accept as statistics having some validity. … But it’s not that 70% of every shopping cart is made up of something people didn’t [originally] intend to buy. That’s just not real.”
The original 70% study was conducted in 1995 by Meyers Research Center for the Point of Purchase Advertising Institute (POPAI). In a statement, POPAI continued to support the 1995 findings. “There have been various studies that have arrived at different in-store decision rates over the years, based on unique methodologies, trade channels, and the context and location of consumer interviews. POPAI welcomes any research that helps brands, retailers and agencies understand the strategic importance of marketing at retail.”
The OgilvyAction study was based on interviews with 6,800 consumers in the U.S. (14,000 total across the globe) and covered shopping behavior in 13 categories including beverages, confectionary, hair care, and household cleaning products.
While the new research failed to answer just how much advertising outside the store environment influences purchases, it did determine important factors that drive impulse purchases. Sampling and product displays ranked one and two.
“The good news for marketers is that a product display and sampling can build brand equity,” Jeff Froud, senior strategic planner for OgilvyAction, told AdAge.com. “No matter what rulebook you studied when you were studying marketing, price promotions don’t build any brand equity and in some cases can be equity destroyers.”
“More and more of our communication is moving to store,” A.G. Lafley, chairman and chief executive at Procter & Gamble, said last month at the International Advertising Festival in Cannes. “And the reason it’s moving to store is that more and more consumers are… making their purchase decisions in store. And in a period where you have a fair amount of food price inflation, we think more of that shopping list, whether it’s just in [a shopper’s] head or actually written down, is being decided in the store.”
Pursue at the Point of Purchase
“Getting through to the consumer with your product message and features is easier and more effective at the point of purchase,” says Dan Nelson, CEO of Leadership Resources. “The amount of clutter in more traditional media and the options of what consumers watch, read and view on the internet and cable has made effective use of advertising dollars much more difficult.”
One analyst acknowledges the impact of sampling and product displays on sales. “Whether it’s 70% or 40%, the key point here is the immense opportunity that retailers and their suppliers have to dramatically influence consumer buying behaviors,” says Kevin Graff, president of Graff Retail. “Now, imagine if you can the impact you could make on performance if you could engage the workforce in the stores to the point that they become brand ambassadors, both for the store itself and for key products.”
The power of reviews and targeted offers are the way to go, says one analyst. “Impulse shopping is alive and well. But the shelf is now digital,” according to Liz Crawford, president of Crawford Consulting. “Increasing dwell time at the shelf, whether 3D or virtual, is still the name of the game. The field has moved, but the game is still afoot.”