Increasing Sales Is a Gift

Imagine being in the food and beverage industry and developing a new product. Your product would be one of approximately 19,000 new products launched annually in the food and beverage sector in the USA alone. Or, imagine you were introducing a new plant to the gardening community and competing with over 250 other new plants being introduced in the same year. It is easy for me to tell you that you need to grab the attention of the consumer, but the consumer is mesmerized by all these products being offered. The chances are your new product will be lost on the retail shelf or bench in the confusion.

If this is a new product, a lot of consumers will be suspicious of it, especially if it is a product you expect them to put in their mouth and taste. The result is most customers prefer to deal with what they are familiar with, and this makes new products even more difficult to launch successfully.

The flip side of this is “new” catches the attention and many shoppers love going to stores that consistently offer new items. They may not purchase them, but the new item can be a traffic driver.

Over recent months, there have been various researchers looking at the influx of new items that appear on the retail shelf and how, as a retailer or supplier, you encourage the consumer to take them off the shelf.

According to Professor Richard George at the University of Philadelphia, one of the easiest ways of gaining the customers’ confidence and getting them to part with their money is to incorporate a free sample strategy into your marketing and retailing. According to George, there are two important criteria to success. One is that the product must be of a superior quality; and secondly, sampling is more effective when a verbal description of a new product is provided by a demonstrator who can communicate the story in a short period of time.

In my research when writing “Just About Everything a Retail Manager Needs to Know,” I discovered that sample tables and demonstrators should be located around 3 meters (9 feet) from where the product is located on the shelf to be most effective, as this gives the customer “thinking time.”

I also discovered that 70 percent of consumers are prepared to get involved in the sampling, and 30 percent of these consumers were prepared to purchase the product. Research carried out by Garson Farm near London on cheese sampling found that the sales of the sample cheese went up around 300 percent.

“Pop Up” Sampling

Sampling allows for cost-effective market penetration; the sampling can be done in store, at events or as a “Pop Up” activity in the community. “Pop Up” sampling was carried out by the Australian Nursery Industry to launch Office Pets, plants for the office. Gift plants were presented to office workers in the major cities of Australia.

According to Snack Factory (Reported in NRF Stores “Something for Nothing” by Karen Kroll), the company invested 15 percent of its marketing budget on sampling in store and has a conversion rate of 25 to 30 percent compared to an industry average, without sampling, of around 5 percent.

One of the keys to sampling is to ensure the demonstrator has the knowledge to educate the consumer. The consumer can then touch, smell, and if necessary, taste the product and then rely on the demonstrator for education, to be told the story. This is critically important if you are hoping to get customers to change their purchasing decision and buy this product rather than their planned buy.

It’s Still Theater

Gifting the consumer is still part of the theater of retailing. The position and theater surrounding the gifting area is still critically important. My advice is to position the sampling station at least one third through the shopping experience, as the customer is more likely to linger longer. Have a dress code for the demonstrator so he or she looks the part, and invest a small amount of money to make the sample station look exciting. The investment may be shared between the retailer and the supplier, as this is a win-win situation.

The proviso is that this system works for “new,” and a product only has a short period in a customer’s mind as to what is ”new.” As a retailer or supplier you may believe a product can be “new” for at least twelve months, while the consumer’s perception of new is a month or less.

The challenge is you need consistency in providing a gift strategy, while at the same time you have to keep coming up with new products to entertain the customer. But, that is show business. And the influx of new products on the shelf indicates this should not be a problem.

John Stanley of John Stanley Associates provides conference presentations, workshops and consultancy to the retail industry in 30 countries. He can be contacted at john@johnstanley.com.au.

 


Author:  John Stanley

John Stanley is a coach, consultant, author, speaker and trainer. He has been described as the 'Retail Guru' and he has also been described as the leading horticultural consultant in the world today. That is because his skills in perishable retailing : food, plants, flowers and pets, anything that cannot be put on a shelf and ignored , in fact, apply equally to all fields of retailing . That specialist skill translates easily across all retail industries including library and tourism.


One response to “Increasing Sales Is a Gift”

  1. Very good article and advice on increasing retail sales and how retailers can improve sales of new products with free samples and knowledgeable demonstrators who can explain the product to consumers at retail stores. Read an informative commentary on the retail industry with related information you may find useful @ http://bit.ly/HKJ0q0

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