CPGmatters: Nestlé Deploys Virtual Shelf Tests to Revitalize Ice Cream Category
Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
Sometimes the biggest ideas come in small packages. A few years ago, Nestlé decided to jumpstart the slow-growth U.S. ice cream category. So it turned to ice cream cups. The consumer benefits were obvious: convenience/portability, portion control, and the ability to buy a variety of flavors to please all family members.
Soon
after Nestlé expanded its offering in early 2008, sales of single-serve
cups grew briskly. Last summer, Nestlé was making plans to introduce
fifteen SKUs of ice cream cups across their Edy's/Dreyer's, Haagen-Dazs
and Skinny Cow brands for 2010. The marketer needed to address two key questions:
- How should the cups be deal priced – $10 for 10 or 99¢ each?
- Should the ice cream cups be merchandised with their parent full-size offerings
to create a brand-blocked family or together in dedicated doors as a cup
destination?
"We couldn't get into a store for testing because we didn't have the offering or the time," said Russ Onish, director of category leadership & shopper insights at Dreyer's Grand Ice Cream, at the recent Shopper Insights in Action conference in Chicago. "So we set up a virtual store environment to let shoppers decide. Let them shop a full 20-door aisle of ice cream set different ways, measured their response in purchasing online, and then made our decision."
Kansas City-based Decision Insight and Nestlé conducted the study in multiple virtual supermarkets and regions: Safeway in Southern California and Kroger in Michigan and Ohio. To create awareness and simulate promotion, single-serve cups were initially advertised in the store circular.
Here are the results
of the virtual testing:
- More revenue results from grouping all of the cups behind dedicated doors (but Skinny Cow cups fared better when it remained with its brand family).
- Dedicated doors (sans Skinny Cow) drive multiple cup purchasing and incremental variety seeking.
- Shoppers buy more cups in a transaction when priced at 10 for $10 than
when the price is 99 cents per cup.
Within six months of completing the virtual shopping study, Nestlé implemented the recommended solution in nearly every one of its retail customers. Ninety percent of stores now stock cups together. Sales of all cups increased 53 percent for the 12-weeks ending June 19, 2010 (excluding Walmart and HEB), according to statistics from The Nielsen Company.
Eighty-five percent followed the recommendation to keep Skinny Cow as a separate brand block, as a result Skinny Cow sales have more than doubled in those stores.
Discussion Questions: What are the advantages and disadvantages of virtual shopping testing of a product versus in-store testing? What steps should brands take to make up for any shortcomings from virtual testing?