Research Shows Product Placement, Pricing Key to Sales

New York — Marketers who analyze how supermarket shoppers navigate a category and make the necessary pricing and merchandising changes could see increased conversion rates. That message was delivered in March at a Shopper Marketing Summit seminar titled “Measuring and Managing Category and Brand Shoppability.”

Store shoppability is the ability of the retail environment to translate consumer demand into a purchase, said presenter Raymond Burke, professor of business administration at Indiana University’s Kelley School of Business. This means the store provides a convenient and enjoyable shopping experience, and satisfies a consumer’s needs.

Shoppable categories clearly communicate the benefits and value of a brand. Sometimes this requires a new planogram. “The question is, ‘How can we rearrange shelves to make it easier for shoppers to find what they want?’” Burke said.

Analyzing shopping behavior is important at a time when product proliferation and duplication has created confusion at the shelf. A typical supermarket carries about 42,000 products, and many brands have multiple SKUs. Procter & Gamble’s Head & Shoulders hair-care line, for instance, has about 25 varieties, Burke said. “Consumers are overwhelmed in the supermarket with too many product choices and varieties.”

Ineffective signage, excessive clutter and out-of-stocks are other reasons for shopper confusion. It is estimated that 10% of sales are lost because products are out of stock, Burke said. This can lead to high levels of consumer stress, reduced shopper frequency and duration, and low purchase conversion.

It’s also causing “purchase procrastination,” as it can take nine months from the time consumers recognize they have a need for a product to the time they make a purchase, Burke said.

Marketers can measure a category’s shoppability by analyzing how long shoppers spend in the category and how they interact with products. This can be determined through attitudinal and behavioral research, eye tracking and shelf interaction analysis, among other tools.

This means recording every product shoppers pick up, the order in which they examine the product, and for how long they examine it, Burke said. That information needs to be considered in relation to in-store marketing activity.

Making the necessary planogram changes to improve a store’s shoppability is worth the effort, said co-presenter Oyvind Christensen, founding partner of shopper research company Flow Insights. “It’s a lot easier to increase the conversion rate than to attract new shoppers to a store.”

Christensen discussed results of research Flow Insights conducted to measure and manage the hair care category’s shelf dynamic at retail. In one study, Flow Insights installed a sensor system above the hair-care shelf to capture all shopper activity, including how long they held a product and looked at the label, and if they returned it without purchasing it.

Shoppers were classified in one of four categories:

• Grab and Go – those who made a quick purchase with limited search.
• Considered Purchase – those who spent a longer time at shelf.
• Product Rejectors – those who picked up a product but then put it back.
• Lost Shoppers – those who looked at the shelf but left without buying anything.

The research analyzed the average time it took shoppers to interact with the product, how many made a purchase, and how many left without making a purchase. “So if they look at a product and put it back on the shelf and buy something else, we look at why,” Christensen said.

One of the studies showed that, due to the vast number of products on the shelf, shoppers were confused about which products were shampoo and which were conditioner. As a result, conditioners were moved to one shelf; shampoos, another.