Scanner Data Corroborates P-O-P's Power

Need proof of the importance of P-O-P in developing market leadership? Look no further than the checkout area of your nearest supermarket. According to new scanner-level data provided exclusively to P-O-P Times by Information Resources Inc., the sales leader in a consumer product category invariably is the most effective user of P-O-P displays as well. This conclusion, first reported by P-O-P Times in 1994, is confirmed and expanded upon by this year's IRI data.Multiple ChannelsDuring the summer of 1995, the editors of P-O-P Times asked IRI, a Chicago-based research company, to conduct several customized searches of the company's retail sales tracking service. The central focus of the research was IRI's InfoScan Supermarket Review. It encompasses nearly 250 supermarket product categories grouped into eight departments. IRI collects scanner-level sales data (tracking price, price changes and product distribution) from 2,700 supermarkets with annual sales of $2 million or more. These 2,700 stores comprise a projectable sample representing 87 percent of chain All Commodity Value (ACV) in the United States. This year, P-O-P Times added data from two other retail channels. IRI's sales data from a sample of 500 drugstores represents 100 percent of that channel's ACV. IRI also collects sales data from a sample of 250 mass merchants, representing 100 percent of that channel's ACV. (The product categories IRI tracks in these two retail channels are limited to the categories included in IRI's InfoScan Supermarket Review.)IRI also tracks how much a category's sales are generated by display activity and feature ad support. In IRI's parlance, displays are defined as secondary locations that are separate from a product's normal shelf space. Feature ads are defined by IRI as advertisements for single products in advertising sections that are either distributed to homes or are available to shoppers in the store.The first custom search reported the total sales generated in supermarkets, mass merchants and drugstores for a one-year period ending June 18, 1995. P-O-P Times editors focus on two data breakouts: (1) the percentage of total dollar sales attributable to display only, and (2) the percentage of total dollar sales attributable to feature ad & display activity. Combining these two figures produces a new index, percent of sales generated via displays.Dollar for DollarThe "Sales Generators" charts list, in descending order, the 40 product categories that derive the most dollars from display activity. These lists were compiled by multiplying a product category's total sales by the new index, percent of sales generated via displays. At or near the top of all three "Sales Generators" lists are two categories: Carbonated Beverages and Candy/Mints. More than $5.4 billion in carbonated beverage sales in supermarkets are produced via displays. Similarly, displays produce more than $529 million in candy/mint sales in drugstores and $655 million in candy/mint sales in mass merchant stores. In a cutthroat competitive battle -- Coke vs. Pepsi, for example -- displays are one of the most critical weapons in the arsenal.Take a look at the other product categories topping the three "Sales Generators" lists, and you'll see a pattern. Most of these products are "leisure-time" foods:Chips & Snacks ($1.7 billion in supermarket sales via display, with another $189 million generated via display in mass merchant stores);Beer & Ale ($1.17 billion in supermarket sales via display, $269 million in drugstores);Cookies ($833 million in supermarket sales);and Crackers ($601 million in supermarket sales).The high dollar volume generated via display in these categories reinforces a basic message: P-O-P is essential for capturing a shopper's discretionary sales dollar.Play the PercentagesThe "Display Driven" charts list, in descending order, the 40 product categories which are the most reliant on display for generating sales. Studying these charts reveals that seasonality is a big factor in the decision to use displays. For example, more than half -- 53.5 percent -- of all suntan product sales in supermarkets are generated from secondary display, according to IRI data. The marketers of suntan lotion must scramble against competitors for prominent positions in-store during the product's peak season. Other heavily displayed categories in this list also feature a high degree of seasonally. These include:Stuffing (27.4 percent of all supermarket sales are generated via display);Firelogs (27.3 percent of sales are via display in supermarkets, 42.5 percent of sales in mass merchants, and 42.2 percent of sales in drugstores);Pest Control (24.4 percent of sales in supermarkets);Instant Tea (19.8 percent of sales in supermarkets);and Cold/Allergy/Sinus Liquids (18.9 percent of sales in supermarkets).Leisure-time foods, which consumers must purchase after household necessities are taken care of, also dominate the "Display Driven" lists:Carbonated Beverages (52.4 percent of supermarket sales are produced via displays);Chips & Snacks (30.8 percent of supermarket sales are produced via displays);Candy/Mints (26 percent of supermarket sales are produced via displays);Beer & Ale (22.3 percent of supermarket sales and 35.5 percent of mass merchant sales are produced via displays);Ice Cream Cones (61.3 percent of mass merchant sales are produced via displays);Marshmallows (23.4 percent of supermarket sales and 54.6 percent of mass merchant sales are produced via displays);and Cookies (40 percent of mass merchant sales are produced via displays).Top VendorsAfter reviewing this first wave of data, P-O-P Times editors selected 13 categories (from the supermarket list only) for more rigorous analysis. A new computer search was begun, covering a 52-week period ending August 13, 1995. (Because different reporting periods -- June to June and August to August -- were used in different charts in this story, category total sales figures differ slightly.)The report included total category sales, sales data on the top five or six vendors in the category and a sales figure for all private label product.To see this analysis in action, look at the Beer & Ale chart. Total supermarket sales in the Beer & Ale category was $5,037,000,000. IRI reports that 15.6 percent of sales in the category are generated by display only, and another 6.6 percent are generated by feature ads & display. Thus, display-related activity category-wide is 22.2 percent. Multiplying that percentage against the total sales figure produced "Total Sales From Display: $1,118,214,000."Anheuser-Busch, the leader in the Beer & Ale category, generated $2.008 billion in total supermarket sales during the reporting period. Anheuser-Busch's $2 billion total sales against the category's $5 billion total sales is 40 percent, which is represented graphically in the total sales pie.According to IRI data, 26.3 percent of Anheuser-Busch's supermarket sales in the beer category are display related, meaning that $528,104,000 of those supermarket sales can be attributed to display activity. Anheuser-Busch's $528 million (from display) against the category's $1.118 billion (from display) is 47 percent. In other words, when you just look at the category's dollars generated by displays, Anheuser-Busch is even more dominant -- the company accounts for nearly half of those sales.This trend was seen in all 13 charts. The company that is the category's overall sales leader is the most active user of display as well -- in most cases, by a wide margin:Nabisco has 40 percent of all Cookie sales, and 52 percent of the Cookie category's sales derived from display.Kraft USA has 36 percent of all salad dressing sales, and 39 percent of the Salad Dressing category's sales derived from display.Heinz has about 36 percent of mustard/ketchup sales overall, and 55 percent of the mustard/ketchup category's sales derived from display.Kellogg has 36 percent of all Cold Cereal sales, and 39 percent of the cereal category's sales derived from display.Star-Kist has 31 percent of all Seafood sales, and 35 percent of the seafood category's sales derived from display.Thomas J. Lipton Inc. has 32 percent of all Ready-to-Drink Tea sales, and 38 percent of the category's sales derived from display.Kraft Jacobs Suchard has 81 percent of all Drink Mix sales, and 86 percent of the Drink Mix category's sales derived from display.Nabisco has 44 percent of all Cracker sales, and 49 percent of the Cracker category's sales derived from display.Ocean Spray has 24 percent of all Bottled Juice sales, and is the leader with 20 percent of the category's sales derived from display.Planters/Lifesavers has 33 percent of all Snack Nuts sales, and is the leader with 21 percent of the category's sales derived from display.Kraft Jacobs Suchard has 32 percent of all Coffee sales, and is the leader with 26 percent of the category's sales derived from display.Kraft Jacobs Suchard has 58 percent of all Stuffing Mix sales, and is the leader with 43 percent of the category's sales derived from display.There's no doubt that the leadership in the use of P-O-P and overall market leadership go hand-in-hand. But can P-O-P help vault a second-place company into command of the category? Quite possibly.

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