Failure to achieve this goal, which is a frequent result, leads to regular restructuring and – all too often – job loss.
Yet, incredibly, shopper insights company Koji sees about 70 per cent of clients needlessly spending cash in a way that does not influence the shopper one bit. This results in a colossal waste of resources at the crucial point-of-purchase moment.
There is a common lament that half the money spent on advertising is wasted, but the trouble is knowing which half. Nowhere is this more true than in the world of in-store and shopper marketing. Shoppers are bombarded with dozens, if not hundreds, of messages, offers, stands, ‘new products” and activities on the shop floor, all designed to grab their attention and all screaming “Buy me!”.
How does this happen? Simply, there is an over-abundance of point-of-sale communication and a lack of evidence as to when and where this should be used. There are wobblers, floor and fridge decals, impulse stands, pallet headers and wraps, standees, price stickers, digital screens, queue stands, aisle blades … the list goes on and on.
It is easy to get sucked in by this toy store of spending options, and to just use every available tool to promote products in store. So many shop owners do this, and later regret it when the sales numbers fail to match the outlay.
Through research, we have learned at Koji some vital steps to avoid this in-store money pit, and how to spend wisely at point of purchase to drive up the sales-to-spend ratio for a product or store.
There are seven golden rules – clear do’s and even clearer don’ts, when spending money promoting products in store…
#1 See the store through your shoppers’ eyes
People aren’t reliably observant. Fortunately, technology now allows us to see exactly what shoppers notice and what they don’t. Glasses with a tiny camera inside let us determine where shoppers tend to look, what catches their interest and what they overlook. One example is pallet headers that need the shopper to look up – save money by removing those. Our research shows that shoppers establish a line of sight with less than one-third of all activities in a store.
#2 Understand what excites your shopper
Being seen by shoppers is one thing, being promotions that compel change are quite another. Just like television advertising, some messages have the potential to bore while others have the potential to excite and delight.
Check with your shoppers first as to whether a message excites them. If wanting to shout about a new product, check first if they are excited by novelty or turned off by the unfamiliar? The answer will identify whether spending money on promoting something new is worthwhile or a waste of money.
#3 Run a trial before rolling out to market
There is no need to spend hundreds of thousands of dollars across hundreds of stores for a promotion, when you need spend just a few thousand dollars across a handful of stores as proof of concept that an activity is driving sales.
Adopt the Tesco mantra: try the idea on five stores, then on 50, and finally on 500 before committing your spend to a potentially futile, or worse, an off-putting activity.
#4 Determine the best locations in your store
All locations in a store are not created equal, as far as marketing spend is concerned. For example, when a shopper walks in the front door, they usually spend the first three metres simply figuring out how to navigate the store to find what they need. So spending money on messages in this zone is often futile.
On the other hand, having the best messages and activities in an aisle seldom visited is equally pointless. Technology can now map the pathway a shopper takes around store – where they go and in what order, how many visit each area, and which areas they dwell in. This information is important for choosing where to place your messages, rather like deciding where to buy a house that is close to amenities.
#5 Do not ignore demographics
It is often said that women are more observant than men, and it is true. Also, teenagers notice more than busy workers, and people in a “browse” environment such as a liquor warehouse store notice more than those in a “grab-and-go” environment like a drive-through bottle shop.
The reality is, you need to know who you are targeting for sales, and what that particular audience will notice specifically. Placing “two for” stickers over products may be effective with an older deal-seeking male, but actually be a turn-off to a younger, white-collar premium buyer seeking variety.
Do not ignore what your target audience looks at in store, or you risk spending money on promotions that work only for the sort of people who don’t visit your store.
#6 Do not overload the senses
The saying “less is more” is perhaps the single most obvious rule in a retail environment. Shoppers faced with lots of stimulation become, well, overstimulated. Simply filter out a substantial proportion of the activity, and focus on the few messages your shoppers will care about or that would catch their eye.
As a general rule, one communication visible from a distance of 15m. will have significantly more impact than four communications in the same space visible from only three or four metres. Having any more than one or two messages in a given visual field is simply wasting money on “noise” that competes with the core message.
#7 Do a walk-through to check installations
Many activities in store fail for the simplest reasons, such as hanging promotional signs then finding they are obscured by security cameras.
Trying to install such activities in one or two stores, then walk the floor to ensure there are no practical impediments that will just waste your money.
Observe these seven principles, and you will soon be able figure out which half of your promotional spend is being wasted on activities that have little impact. Then you can concentrate more budget on activities that do drive returns.
Mike Cassidy is co-founder of shopper insights company Koji, which works with blue-chip FMCG and retail clients on the shopper planning process, from identifying opportunities through to optimising in-store activations.
This article was first published in the April edition of Inside FMCG. Subscribe now.