Research in the Shelf Space and Beyond
Unlocking the Power of Research
Erwin Chang, Novamex
January 2015
Introduction
• This presentation will explain various types of instore research (not only shelf space research)
that are currently in use at Novamex and can be
useful for various CPG studies
• Some of the techniques were custom-designed to
be conducted in the Hispanic market, but can be
adapted to the general market
2
Agenda
• Shelf Test
• Beyond Shelf, Quant
• Beyond Shelf, Qual
3
SHELF RESEARCH
4
Shelf Tests
Novamex Goals:
• What package to use within the shelf
• What changes to make to packages to improve
visibility, impact, recognition, desirability and
purchase
• Where to place the product
5
Shelf Test Quant
Currently two-three shelf tests are being used by most CPG
companies:
• Online tests
• Physical shelf tests – CLT
• At stores: test markets, etc.
Pros
Cons
Online
Cheap, fast, different tasks
Representation (Hispanic
market)
CLT
Closer to real world, use of
eye tracker
Expensive, lengthy
At Stores
Better representation
Very expensive, too late
6
Research in the Hispanic Market
Some key insights:
• Although improving, internet penetration is not
extensive among first generation Hispanics (63%,
Pew Hispanic Center, 2012)
• Moreover, many of them are also afraid of using a
computer
• Many of their purchases are made by “team”
decisions as various family members are involved
• Children have a strong influence in the purchase of
many products
7
Shelf Test Solution – Quant
$0.99
0.99
$1.19
$1.10
$0.99
0.99
$1.19
$1.10
$0.99
0.99
$1.19
$1.10
• A virtual shelf made of real-size printouts is shown on a large board
• Easy to configure product positioning on the board shelves and change
prices in seconds
• Affordable, easy to deploy, more representative and reliable
8
Shelf Research, Qual
Objectives:
• Understand the relationship between brands that share the
same shelf
• Understand the relationship between advertising and our
product on the shelf
Process:
• As a follow-up to the quantitative shelf test, IDI’s are conducted
• Sometimes extra information is given to participants to learn if
they may change their minds if other variables change
• The extra information may include advertising pieces that can be
shown prior to the shelf test or after, depending on the research
design
9
ITEM PLACEMENT
10
Shelf vs. Item Placement Research
Shelf Research
Includes:
• Shelf
(In-Store) Item Placement
Research
Includes:
• Shelf
• Refrigerated shelf
• Endcaps
• Displays
• Side stacks
• Pallets
• Cash register displays
Floor Activity
11
Floor Activity
Key characteristics about floor activity:
• Different from placing the items within the shelf,
products on pallets, stacks or displays do not
share space with other brands
• Increase visibility in a natural way
• There are extra costs associated with the use of
floor activity
• Promotions and sales are also associated to the
use of floor activity
12
Item Placement Research
Key questions:
• What would we want to know about the use of floor
activity?
–
–
–
–
Does it work?
Is it worth the extra costs?
Which type of floor activity should we use?
Are all types of floor activity the same?
• How to answer these questions?
– Next slides
13
Item Placement Quant
Does floor activity work? Is it worth it?...
Process
• We obtain information about weekly sales and floor
activity (pallets, side stacks, displays, etc.)
• Using multivariate analysis, the relationship between
sales and the use of different places to exhibit products is
found
Data Collection:
• Information provided by the store, plus
• Information collected by a store-check team
14
Store-Check Team
• All audits are conducted weekly from Wednesday to
Friday, as prices and floor activity changes on
Wednesdays at main grocery stores
• Team uses an online survey to conduct the audits on
handhelds
• They check each store for:
– Product availability
– Product placement: shelf, pallets, side stacks, displays, etc.
– Prices, including promotions/specials
• The audit software sends automatic emails to the
Novamex store account and brand managers in real time
if something is not aligned with the current plan
15
Store-Check Benefits
• It collects key data to run multivariate analysis in order to
develop models that can predict sales
– Adjusted R2 of one of our predictive models:
0.89
– Having floor activity can boost our sales:
2X
3X
• It helps correct wrong prices, promotions, item placement,
etc.
– Percentage of stores that were NOT in compliance with our marketing
plans:
42%
16
Item Placement Qual
• The qualitative research on item placement is key
to marketing management
• Here are some qualitative insights:
– Items placed on pallets are viewed as non-upscale
items, but on promotion
– Displays can alter image and brand positioning
– Floor activity works well for either customers who
want a deal or non-planned purchases
17
Item Placement Qual
• Exercise:
– launch of a new drink
• Background:
– Research was conducted to develop the “perfect”
product, which had to be attractive and different
• Strategy:
– Line extension of a successful Hispanic brand
• In Store Placement
– On pallets within grocery store hallways only
18
Q&A
19