• by Matt Draper , Valla Roth , May 8, 2008

With grocery, discount, club and convenience stores, the retail options for today's consumer abound. Nevertheless, a recent study by MarketTools found that 75% of consumers favor shopping at just one or two stores on a regular basis. Furthermore, while promotions drive some to shop at alternative retailers or choose different products, they tend to have little effect on shoppers' overall behavior. In fact, the average shopper is well-organized and often knows what they're going to buy before entering the store--the study found that 85% shop with a written or mental list, or check with others before a grocery trip.

However, it's also well known that brand loyalty only goes so far, and in-store marketing tactics have a role in what consumers ultimately purchase. For example, a MarketTools study revealed that consumers are willing to veer from the brand they originally intended to buy--among those buying packaged cookies the last time they shopped, only 52% bought the brand they planned to buy. Reasons for this change ranged from a desire to try something new to the other brand was on sale, the other brand looked more appealing, the other brand was healthier and the original brand choice was unavailable. So what does this all mean? Marketing activities at the point-of-purchase--such as packaging design, display timing and location, in-aisle messaging, self talkers and shelf layout--all have a profound effect on what ends up in consumers' shopping carts.

Since consumers can be swayed at the point-of-purchase, it is critical for manufacturers and retailers to determine which tactics drive purchasing decisions for their specific category, their stores, their customers and their brand in order to maximize sales and capture additional market share. So the questions now are: can in-store sampling, promotions, and shelf talkers--well-known for driving incremental volume--be used more effectively? And can manufacturers and retailers be more innovative with in-store marketing?

Out With The Old, In With The Virtual
Manufacturers and researchers want to employ optimal marketing strategies, but the classic research method of in-store testing is costly, logistically complicated and highly disruptive to store operations, making many organizations hesitant to take this approach. From a research perspective, the lack of control over environmental factors can influence consumer behavior and interfere with the results of in-store research. For example, a test store may have been the subject of a local retail promotion or discount advertisement in local press--all that noise can interfere with results. Sometimes competitors can take the environmental effects a step further by purposely dropping high-value coupons or buying test products off the shelves to make the data more difficult to read.

Recognizing the difficulty of accurately testing marketing activities in-store, MarketTools integrated sophisticated 3D graphics into its survey engine to create a virtual shopping experience that survey panelists can use on their personal computers. The virtual shopping experience first shows panelists a "fly through" of the front of the store and then takes them down the aisle(s) being tested. Respondents are then able to "shop" using a realistic depiction of the aisles complete with high-resolution package graphics, shelf talkers, coupon machines, signage and other marketing tactics. Tests show that the virtual method provides a very "real" experience with results that accurately predict the results from in-store testing. In all four experiments undertaken, virtual research supported the same business decisions as controlled in-store tests, but at a fraction of the cost, in much less time and with total environmental control over testing conditions.

As an example, one study sought to determine the most effective pricing strategy for a display brand: two for $4 or two for $5. The results from MarketTools' test groups demonstrated a marginal difference between the two offers, meaning that the decision to go with "two for $5" made sense from an additional revenue standpoint. The data from the parallel in-store test supported exactly the same business decision, validating the virtual research.

In addition, the online shopping study provided valuable insight that a controlled in-store test could not: that "two for $4" attracted loyal shoppers to stock up, whereas "two for $5" appealed to occasional shoppers, making it more incremental. This is another significant advantage of the virtual shopping experience--it is not simply a replication of store scanner data, but rather allows retailers and manufacturers to mine purchase results and better understand consumer decisions, in turn enabling them to make better marketing decisions.

Other tests conducted in the virtual shopping validation process have included adding fixtures to shelves, assessing whether in-aisle marketing materials enhance sales, and how end-aisle displays impact the purchasing of new products. In each case, the virtual tests supported the same business decisions that would have been made on the basis of the actual in-store tests.

Virtual testing for a variety of point-of-purchase decisions is a valid alternative to controlled in-store tests at a speed, price and practicality level that previously rendered them occasional luxuries. As more organizations leverage the power of virtual testing, manufacturers and retailers will be able to better hone in-store marketing strategies and more effectively compete in the market and on the shelves.