Putting the Pieces Together at the Point of Sale

It is well documented that over two-thirds of shopping decisions are made at the point-of-sale. It follows that for virtually all brands, from candy to computers, the difference between success and failure is tied closely to retail presentation. Given the importance of point-of-sale marketing – and the unique challenges facing brands at the point-of-purchase – this is an area in which research insights can make a direct contribution to the bottom line. However, few companies take a comprehensive approach to point-of-sale research, or apply the same discipline to understanding the shopping experience as they devote to advertising or brand tracking research.In this article, I'll discuss the key challenges facing marketers at retail, offer several observations regarding point-of-sale research and outline a process for using research to guide retail strategy. The Challenge at Retail – and a Framework for POS StrategyAt retail, a brand must first break through enormous clutter to even gain the shopper's attention and be considered for purchase. This challenge should not be underestimated: In our PRS Eye-Tracking studies of shopping behavior, we regularly find that when a person actively considers a product category, she is likely to completely ignore at least one-third (one-third) of the brands on shelf. Of course, entering the shopper's consideration set is only half of the battle, since the brand will nearly always be positioned directly next to competitors. Therefore, the brand must differentiate from competitors – and address shoppers' primary concerns (i.e. low fat, proper flavor, compatibility, etc.) in order to enter the shopping cart. Moreover, it must do so in the 5-10 seconds that shoppers typically spend making grocery decisions, or the 30-60 seconds that they spend considering a more complex, higher-ticket item, such as a computer accessory. To be successful in this environment, marketers need more than attractive packaging. They need a strategy that specifically addresses the challenges of visibility, differentiation and support. A successful point-of-sale strategy, in turn, rests on an understanding of three critical elements: The retail environment, the customer and the package. Three Forms of InsightTo build and execute a retail strategy, marketers need three forms of insight: An Understanding of the Retail Environment An Understanding of Customers An Understanding of their Current Marketing Efforts ("The Package") Here are some suggestions for better understanding these areas: The Store It seems obvious that retail strategy should start at the store. However, many marketers fail to systematically document and address retail "realities" such as merchandising constraints. In addition, companies rarely look beyond their own product categories to see how other brands address retail challenges and take "ownership" of certain colors, shapes and icons. Often, break-through ideas come from brands facing comparable challenges in other categories. To better understand their brand's retail environment, marketers should start by developing more formal processes for sharing information with their sales force. In addition, we recommend that companies schedule annual retail audits (including store visits and retailer interviews), conducted by a "third party" such as a research firm or a design agency. This "outsider" perspective helps the company look beyond their category and develop new merchandising concepts.The Customer In attempting to understand consumers at retail, it is helpful to think of two distinct issues and forms of insight: Decision Making at Point-of-SaleVisual Language & VocabularyAs mentioned earlier, consumers make the majority of their purchase decisions while standing at the shelf. However, the nature of their decisions varies greatly by category – and "converting" buyers of a competitive brand is rarely the most promising opportunity at retail. For example, Campbell's recently conducted research on retail decision-making and found that many people approach the soup category certain of their brand decision, yet undecided as to how many cans they would buy. This learning led to packaging with enhanced appetite appeal, which was critical in driving additional impulse purchases. In technology products, the primary opportunity often lies in "up-selling" customers to more expensive and profitable products. However, nearly all companies focus instead on their competitors – and therefore package their products in a consistent "family look" that often fails to adequately differentiate among their offerings. The second fundamental challenge is to understand how people sort through a given product category. Since people make over a dozen purchases in a typical supermarket shopping trip, it is not surprising that most of their decisions are more emotional than rational – and that people rarely take the time to read back labels or to actively compare products and prices. Instead, shoppers use visual symbols to sort through the vast array of options and make quick decisions. Therefore, marketers need to understand the visual "language" of their category and use visual imagery to connect with customers immediately and intuitively. To do so, research must uncover the key differentiating benefits associated with a given category (i.e. reliability, ease-of-use, taste, etc.) – and identify the visual symbols that people use to classify different brands, product forms and features. This knowledge is critical, because it allows marketers and designers to prioritize messages and communicate visually. Companies that have not "done their homework" do not know which messages to highlight and usually end up with cluttered packaging. This is nearly always a mistake, because PRS Eye-Tracking research has repeatedly shown that people will not take the time to read more than 2-3 messages on a label. Many companies try to understand customers by observing people as they shop. This approach is clearly valuable in documenting shopping patterns (i.e. price checking, label reading) and uncovering confusion at retail. In addition, you often find that what people do is far different from what they say. For example, when we asked people about shopping for photo film, very few admitted any difficulty or confusion in selecting the right product. However, when we videotaped them at the display, it revealed that many customers spent a minute or more struggling to find or decide among different product forms. While observational research is valuable in documenting what people do, it is limited in helping marketers understand why people make their decisions. Therefore, we recommend supplementing observational research with focus groups, which provide the time necessary to allow shoppers to speak in greater depth about their shopping mindset, their priorities and their perceptions of different brands. These group discussion often include "visual equity exercises" (such as drawing a package from memory), to better understanding the visual language people use to sort a particular category – and to understand which shapes and colors are "owned" by different brands. The Package Finally, marketers need to regularly measure the communication of their brand's retail presentation (i.e. packaging and/or merchandising). Quantitative measurement is particularly important, because it provides a numerical basis for assessing a brand's retail presentation relative to that of competition – and for gauging the opportunities and risks associated with design changes. In conducting this research, three fundamental principles should be kept in mind: Monadic Research Design: The most realistic and effective studies are those in which each respondent sees only one retail presentation for a given brand. Once people are shown different packages for the same product (i.e. current vs. proposed), they begin to lose their perspective as customers and to focus primarily on aesthetics, rather than communication. In short, they are no longer customers considering products, but "art directors" comparing designs. Competitive Context: Packaging and merchandising studies should present the product in the context of its retail environment – and gather data regarding the test brand and primary competitors. Because products appear side-by-side with competitors, retail presentation is all about differentiation: An effective design helps a brand to "own" one essential dimension relative to competitors (taste, value, efficacy, etc.). Assessing a brand's packaging or merchandising in isolation misses this critical element -- and thus sacrifices much of the realism and value of the study. Measures of Shelf Impact: As noted earlier, a brand must break through retail clutter before it can even be considered for purchase. Therefore, a comprehensive study must measure shelf visibility, in addition to gauging appeal, communication of product benefits, and ultimately impact on product perceptions, brand imagery and purchase interest. At PRS, we use PRS Eye-Tracking to document exactly how people view product categories and to uncover exactly which brands each person sees or ignores.For these reasons, focus groups are a poor forum for assessing packaging and merchandising, although they can be useful in identifying misguided ideas and "siphoning down" a broad range of new concepts. Web-based surveys represent a promising alternative approach to evaluating new concepts, in that they offer quantitative data and the possibility of a monadic study design. However, they are limited in their ability to present a competitive context – and offer no measurement of shelf visibility. Therefore, face-to-face personal interviews remain the strongest alternative for comprehensive assessments of design systems.A Proactive ApproachAs we pull these critical pieces together (store, customer and package), we can envision the research needed to properly inform point-of-sale marketing decisions. However, the major problem is that nearly all point-of-sale research is project-driven, tied to proposed changes in packaging or the introduction of new products and/or merchandising systems. This nearly always leads to a "piecemeal" approach to research, dictated primarily by tight deadlines and limited budgets. More importantly, project–driven research results in wasted money and lost opportunity, because critical decisions (most notably when to change packaging or merchandising) are nearly always based on judgment. Often, they are belated reactions to market share declines – and come several years too late. Occasionally, they are unnecessary changes that waste resources, confuse customers and risk the brand franchise. Retail research can be made more productive if it is made more pro-active. Specifically, it should be grounded in an annual review of their brand's retail presentation. This quantitative measurement will determine whether or not changes are advisable, by documenting the brand's visibility, differentiation and communication relative to that of primary competitors. If changes are needed, research can guide the development process at three stages, via "upfront" consumer research, "midstream" research to narrow down and refine a range of preliminary options – and "post-design" survey research to comprehensively assess new materials prior to their introduction. The Critical Difference While all marketers acknowledge the importance of point-of-sale, few companies have developed explicit strategies for differentiating their brands at retail – or a process for gathering the insights needed to execute these strategies. In our experience, we have found that the critical difference is planning. The exceptional companies take a pro-active approach to point-of-sale research, while others always scramble to find time and resources at the last minute -- and inevitably compromise the value of the research. Given each brand's need to win at retail, marketers that take a comprehensive, pro-active approach to point-of-sale research are sure to be rewarded. Scott Young is Vice President of Perception Research Services (www.prsresearch.com), a company that conducts over 500 consumer research programs each year to help companies develop, measure and improve their point-of-sale marketing efforts. He can be reached at syoung@prsresearch.com or 201-346-1600.

Putting the Pieces Together at the Point of Sale

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