Is your in-store promotion giving you the best financial return?
Rajeev-sharma-1
Rajeev Sharma
June 30, 2021

Is your in-store promotion giving you the best financial return?

As a CPG manufacturer you breathe a sigh of relief or joy simply to get onto the promotional calendar of retailers for a holiday like the 4th of July. But did you know that despite the considerable efforts/expense in designing and executing promotions involving in-store displays, a vast majority of displays perform sub-optimally, giving poor returns on investment?

Consider these facts from VideoMining Display Performance Dataset (that has the path-to purchase conversions measures and detailed attributes for 100s of thousands of in-store displays):

  • Beer displays in grocery stores only close 23% shoppers who stop and engage (on average for 21 seconds)

  • Carbonated Soft Drinks (CSD) displays can close sales 40% poorer depending on relative position to main beverage aisle

  • The closure rate for a Beer display at a given location varies as much as 68% for different pack sizes on display

  • Bottled water displays performance varies by as much as 450% depending on in-store location

  • Candy display performance can be improved by 42% by better adjacency or as much as 600% by changing in-store location.

This is just the tip of iceberg in the widespread inefficiencies we see in display execution every week but especially during Holidays. There is obviously a corresponding significant opportunity loss in financial returns for the promotional dollars spent.

Simply improving the display location can have an immediate positive impact on ROI. From the retailer standpoint, data-driven allocation of the display locations (end caps, other secondary displays) to create the right combination of categories every week can lead to substantial increase in total store sales. Since displays can play a strategic role, better allocation of display space not only leads to more incremental sales but also enhances the in-store shopping experience. This was especially evident during the pandemic when the shoppers made more “stock up” trips and spent a significant proportion of their time in the perimeter areas of grocery stores, making displays even more important for incremental sales and shopper convenience.

Location is not the only parameter that has a significant impact on display performance. The brands promoted, number of products on display, pack sizes, messaging, price, etc. greatly impact the engagement rate and closure rates for displays.

A good location can override the need for a sharper price discount during promotions. We have also documented cases of significant improvement (2-3 x) by simply changing the messaging content for a given display. Clearly knowing who the primary shoppers (not consumers) are for a product and creating content that appeals to that segment goes a long way in enhancing the stopping power and performance of displays.

Further, in-store path analysis of the targeted audience, for example, shoppers on a “barbeque” mission can create opportunities for special displays, for examples for “beans” to help shoppers consider additional products not on their original shopping list.

Optimizing in-store displays and promotions is in fact, one of the lower hanging fruits for leveraging in-store behavior analytics powered by AI technology. Just using historical display path-to-purchase conversion data can help in improving the next promotional plans. Optimized displays don’t just lead to higher sales lift but can also strengthen the brand position, especially in emerging categories where a “trial” or “brand switching” can change the brand share past the promotional period.

So if you are waiting for the sales numbers after a promotional event like that for July 4th, think about the missed opportunities that fact-based shopper insights could have captured, creating a more “explosive” financial return or a better bang for your promotional buck!

You may also like this:

Hershey’s - A free case study

Learn how VM’s Study/Track Display performance helped improve conversion and cross-purchase for the candy giant.

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