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    PG Web Extra: Endcaps and Center Store

    Excerpts from a shopper behavior study by the Category Management Association

    Editor’s Note: Gordon Wade, director of best practices at the Category Management Association, authored a shopper study based on in-store behavior analytics focusing on how endcaps impact sales throughout the core center store. The following are excerpts from that study; more information is at www.cpgcatnet.org.

    As the in-store shopping experience has grown in importance, so has the imperative to understand the manufacturer’s ROI on the dollars being spent within the store.

    Most manufacturers have been able to measure certain aspects of their in-store expenditure from Nielsen and IRI reports on sales lifts from features and displays. But they have lacked a more granular understanding of various merchandising options at retail. The retailers themselves have lacked a holistic understanding of the relative effectiveness of specific merchandising techniques on the overall shopping experience and, most importantly, the effect on market basket size.

    More recently, as center store sales have declined, retailers have become much more concerned about understanding how they may merchandise brands and categories to drive overall market basket value. Often this means finding ways to drive shoppers down more aisles into the center of the store.

    Analyzing behavior

    New research suppliers have arisen to address these issues; among them is State College, Pa.-based VideoMining, which captures the actions of every shopper in the store during the shopper’s entire trip by multiple digital cameras placed unobtrusively in the ceiling of the store. The activities of each shopper are analyzed by patented digital analytics enabling the system to accumulate enormous masses of behavior and reduce it to metrics.

    The data and analysis used in this report are based on VideoMining’s Grocery Shopper Insights (GSI) program, including a syndicated “MegaStudy” of over 2 million shopping trips and a variety of custom studies. In this specific report, the preponderance of the data and conclusions are from one conventional 45,000 square foot supermarket with 34 endcap display locations.

    As should be expected, manufacturers and retailers have different perspectives regarding the role of endcaps in their marketing strategies. Both envision endcaps as a way to increase profitability but here the perspectives and objectives begins to diverge.

    Manufacturers have historically looked at endcap displays as one of the most predictable and profitable ways to increase volume of a brand. Most manufacturers have repeatedly experienced dramatic volume increases from the endcap displays with or without an accompanying price reduction. Depending upon the brand, the category and the accompanying promotion, manufacturers can reliably expect volume increases from 2x to 5x versus base and control.

    These significant increases have been repeatedly reported over the years by Nielsen and IRI. Everyone believes this to be the case. Some analysts are quick to point out that these are temporary increases that merely move purchases forward in time but don’t represent real increases in long-term in-home use-up rate. A few analysts have even shown that an increase in the movement of one brand in a category does not necessarily increase total category sales but merely cannibalizes the sales of other brands or later consumption thereby leaving the retailer with little in the way of incremental volume over a two or three month post promotion period.

    It is here that one can begin to appreciate the differing objectives that a retailer has for the valuable endcap display space awarded to a specific manufacturer and brand.

    Retailers want an increase in category market share versus direct competitors and other channels; an increase in total store sales and market share during the promo period; a promotion that helps to attract incremental shoppers to the store and generates incremental sales while the shopper is in store; and long term, an improvement in the banner’s value image among target shoppers as an outgrowth of the overall impact of the categories and items featured.

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