Impulsive Displays of Consumer Buying Behavior

Discussion
Nov 25, 2008

By
George Anderson

Retailers
may be engaged in markdown mania but research from OgilvyAction concludes
that if they really want to move product they need to get it out on secondary
displays.

The
agency’s research that included interviews with 6,000 shoppers across multiple
retail channels in February and March found that 29 percent of consumers
made unplanned purchases when going to a store. Of those, 24 percent were
influenced by displays to purchase while 18 percent cited in-store sampling
and 17 percent mentioned a price promotion.

Thirty-nine
percent of shoppers said they entered a store with plans to purchase from
a category but not a specific product. Thirty-one percent of those consumers
were influenced to buy by sampling, 28 percent by price promotion and 27
percent by some other form of promotion.

Impulse
purchases using displays were most likely to occur in convenience stores
where just below 50 percent acknowledged buying a product they had not
intended to when entering the store.

While
the research points to the power of displays, the reality is that secondary
displays are often stocked with discounted products.

"We
know price promotion will always be in the picture for any shopper," Jeff Froud,
senior strategic planner with OgilvyAction, told AdAge.com. "They
will always say they don’t want to feel like they’re getting ripped off."

Discussion Questions:
Do retailers need to change display strategies in light of the economy
and mood of consumers? Where do you see challenges and opportunities
for retailers in the use of in-store displays?

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15 Comments on "Impulsive Displays of Consumer Buying Behavior"


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Charlie Moro
Guest
Charlie Moro
13 years 6 months ago

Clutter may be back in style as a merchandising tool. Consumers may need to be visually communicated to with value messages at every turn, so that while products may be marked down, the message of value is shouted from every angle. Kohl’s historically has always done a great job shouting the message across the store with 30%-40% and 50%-off on racks which has reinforced their image as a value merchant.

This season is not only going to be critical and life threatening for many retailers in the short term, but is also an opportunity to keep consumers for 2009 and beyond with how they handle this merchandising strategy.

Cody Begg
Guest
Cody Begg
13 years 6 months ago

Product displays are by far the most prominent way to promote items, especially in a c-store environment. The problem is that often times the displays and promotions are driven by the vendors and not necessarily chosen with bottom-line impact in mind.

When designing product displays, retailers should always be considering the contribution margins on each product being promoted. To a point, we are able to influence a consumer to buy products that have the highest margins. Once we find our “stars” of a given category, we can influence the consumer choices through placement and promotion to increase volume.

Product displays are important to the bottom line and should be organized and designed with profit in mind.

Cathy Hotka
Guest
13 years 6 months ago

Let’s think about this from the customer’s point of view.

Columnist Robert Samuelson says that in 1982 the personal savings rate was 11% of disposable income. By 2006, that number was almost zero. Consumers who have indulged in a spending frenzy are now avoiding stores because they don’t want to be tempted. When they do enter, it’s for items they need, and they’ll want those items to be investment quality. Cluttering up the aisles and creating a sidewalk sale atmosphere is going to be counter-productive.

Ron Larson
Guest
13 years 6 months ago

Don’t underestimate consumer willingness to hunt for bargains. Foraging for food is part of our psychology. If stores cut down on the shelf signage clutter, more consumers probably will travel more aisles to see what in-store specials are available.

Displays are still great, but there is only so much good display space. Stores can improve the productivity of their displays and shelves by using consumer behavior principles and eye-movement analysis.

Dick Seesel
Guest
13 years 6 months ago

Using added locations like endcaps, checkouts and in-aisle fixtures needs to be planned–just like the rest of the business. Locating distressed or clearance goods in these prime spots isn’t the best use of the in-store real estate; it adds to a store’s cluttered appearance and impression as “a bunch of stuff.” Rather, these secondary locations are best used to communicate newness, value and “must-have” status on key items.

Doron Levy
Guest
Doron Levy
13 years 6 months ago

So the economy is bad and customers are in value mode, so we have to kill margins to make customers happy. When building displays with high velocity, low margin products, we need to strategize the layout to protect margins. This is known in the field as shielding. A typical example would be having a front page loss leading name brand toothpaste on an endcap. A logical shield would be a bin in the middle of the display with private label toothbrushes. A high margin accessory associative product that would complement the loss leader. As merchants, we need to examine the margin ROI on all of our promo displays and to optimize them accordingly.

David Biernbaum
Guest
13 years 6 months ago

Displays are high-octane impulse-sales movers and create excitement for the consumer throughout the store. However, every retailer, on an individual basis, needs to examine its own image, points of differentiation, target market, etc., to be sure that displays it takes in are the right fit for the store’s image and environment. Overall, I encourage retailers to choose the right displays and to use them!

Anne Howe
Guest
13 years 6 months ago

While I agree that for many retailers, displays will move product, I lean more in favor of better organized and shopper-relevant categories in the stores. Herb Sorensen presented a concept at the ISMI Expo in Las Vegas a few weeks ago that is very intriguing. In a nutshell, the concept is that many retailers could see more by keeping shoppers in the store for less time rather than more time. A well organized store that doesn’t make a shopper have to spend 50% of her time “searching” the shelves might be more valid.

John Crossman
Guest
John Crossman
13 years 6 months ago

The key here is to be proactive and treat this holiday season like no previous one. Be sensitive to customers’ current condition, stay true to the company culture, and then have displays that leverage both.

Herb Sorensen, Ph.D.
Guest
13 years 6 months ago

The facts are that across America, 40% of everything sold in supermarkets comes off endcaps and promotional displays, even though those account for around 1% of the SKUs in the store. What ends up on those displays is way too driven by the brands willingness to pay to be there, and way too little on what shoppers really want.

Shoppers vote billions of times every day in stores across the country on what they want, and where they want to go to get it. It’s really not that complicated. But if you think you can eke out a few more sales by pushing lots of stuff they are not interested in, in front of them (hold them in the store a little longer, hide what they want in a sea of irrelevant–to them–offers) you are cutting your own throat, and richly deserve to have a growing body of savvy competitors eat your lunch.

Li McClelland
Guest
Li McClelland
13 years 6 months ago
I side with those who urge retailers to stick as closely as possible to their own culture and their known customers’ shopping psychology in these tough times. If a store is already known for racks of discounted merchandise and tables piled high with seasonal sale merchandise, then have at it and give customers even more! Their customers will especially enjoy the foraging this season. There are many shoppers, however, who although they are economizing this year and seriously looking for value, will react negatively to clutter or extra displays which they may view as “cheap” looking. These customers are used to a store’s particular aesthetic and have chosen to go there. They will not want to do their holiday shopping in an environment that reminds them of a sidewalk sale or a rummage sale. Retailers are stressed but need to remember than shoppers are also quite stressed. Calm and steady will save the day. The retailers who survive will have to live for many years afterward with the decisions they made and marketing strategies they… Read more »
Carlos Arámbula
Guest
13 years 6 months ago

I feel like the question should be on display tactics and not strategies. The display strategy should be based on the retailer’s overall strategy, there should be synergy and continuity in the communications to the consumer–especially in light of the economy and mood of consumers.

Display tactics should be customized to address seasonal needs. Impulse buys are the results of multiple factors (many outside of the store) where the compelling reason to buy is present in the consumer regardless of his desire to save money or keep to a budget.

For manufacturers the opportunities to communicate brand benefits and attributes in displays–by themselves or coupled with additional promos or discounts–are a promotional necessity and should be part of the media mix.

The biggest challenge for any brand is to avoid becoming a “display-brand” where under any other circumstances the brand gets lost in the retailer shelves.

Tim Henderson
Guest
Tim Henderson
13 years 6 months ago

What these results tell me is that merchants and manufacturers need to really partner to determine which promos (discounting, sampling, cardboard displays, etc.) work best for the target consumer, the retail format and the product. Displays can obviously be effective, but they’re only one weapon in the arsenal.

As for opportunities, the unique product value highlighted by the Kellogg’s/Walmart and Sara Lee/Disney promos lays down a path for others to follow. It’s an effective way of redefining value for a consumer who is now price focused. Value has to mean more than price or plenty of merchants and manufacturers are in serious trouble.

Lee Peterson
Guest
13 years 6 months ago

Just got back from a trip to mall retail; our team had some quick observations:

• very few Holiday displays; some in the mall, but few in stores–very subtle, if any

• lackluster sales staff; asleep at the wheel

• major discounts, in some cases, 50% off EVERYTHING

• poor fashion at apparel stores

The only store that even looked remotely ready for the first big shopping day was Pottery Barn; 12 gift ideas, front window.

So, with all the fundamental errors mentioned above, impulse buying seems a very, very distant concern at this time, especially considering the poor fashion on display. Are there any merchants out there anymore? Where’s the style? Why, why, why should I buy that awful stuff?

Mark Eichenbaum
Guest
Mark Eichenbaum
13 years 5 months ago

These are very difficult times and there is a lot less disposable income available to be spent. Competition is much tougher. Everyone seeking a share of the market will have to raise the quality of their merchandising.

However, there isn’t going to be one answer. It will be a combination of focused advertising, intelligent merchandising and the presentation of great values.

It is usually a fine line that is traveled. Too much clutter and the stores are too difficult to navigate and potential customers loose desire to shop. If there is not enough inventory and it looks like the retailer is going out of business, not to forget the loss of incremental sales.

Consumers are definitely going to being more discriminating, spending more time to spend less money. My advice is, be ready to offer quality and value and be willing to exceed their expectations to earn their business.

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