CPGmatters: Philips Breaks Wares Out of the Box to Communicate with 'Product-Demos'
Through a special arrangement, presented here for discussion is an excerpt of a current article from the monthly e-zine, CPGmatters.
One of the reigning assumptions in retailing these days is that consumers increasingly are driven by price alone -- that all other discerning features of products, packaging and merchandise fall into distant places behind the importance of discounting and availability of the stuff on the shelves.
But even amid today's global economic downturn, Netherlands-based Philips is offering dramatic proof that shoppers still crave relevant information, delivered to them in the store, and that if it's done intelligently, "product-demo" communications on the shelves can drive purchase decisions to the brand.
Based on powerful shopper insights such as these, the Domestic Appliances and Personal Care unit (DAP) of Netherlands-based Philips is intensifying a strategy that has boosted sales significantly during the four years since it was launched.
Some of "the learnings were so well-received by our retail partners, we have, in each case, moved on (at the retailer's request) to developing in-store executions including revised shelves and upgraded in-store communications," John Carter, Philips' director of strategic consumer intelligence for the DAP unit, told CPGmatters.
"In several cases," Mr. Carter said, "we are now in the initial rollout phase of the new shelf executions and templates, which will be honed in their execution and ability to consistently deliver against the impact learnings from [recent] studies."
Consider a new demonstration with one retailer.
"In [this] particular account, across several countries, the retailer was so impressed by the strength of the results that they immediately reversed their recent decision to overstock shelves and return to demo shelves - with product outside of the package," Mr. Carter said.
Among Philips' proven successes already in this arena, for example, has been its practice of creating separate and distinct in-store presentations for Norelco shavers and incorporating aligned communications for each target. In part, this has involved simplifying displays for Christmas-holiday gift givers, identifying three shaver options: "Good," "Better" and "Best" models.
Of course, before Philips and its retailer-partners can get to the point of such executions, they first are learning what "drivers" are working in shoppers' minds and leading them to their in-store purchase - or no-purchase - decisions. Among the product lines and markets to which Philips DAP is applying its learnings about drivers are shavers and accessories in two countries, Philips Avent baby-feeding systems in the United States and two other countries, and Philips kitchen appliances in several countries.
In any event, Mr. Carter underscored why Philips considers it so important to dig deep for new and true insights into shopper behavior. "Shoppers are rarely random," he said. "They exhibit pattern behavior that commonly makes simple sense - once you understand it."
Discussion Questions: What are the pros and cons of using "product-demo" communications to drive purchasing decisions at retail? How would you rate "product demos" versus other ways of reaching consumers in-store at the shelf level?