In a sense, grocery stores are complex sales channels. Manufacturers, farmers, bottlers, brewers, and representatives, place their products on grocery shelves with the anticipation they will be chosen by shoppers, and subsequently purchased.
The store, in return, puts faith in the salability of the products they stock. Should they not sell, they have the option of moving or removing them, or offering competitive products with more consumer appeal, higher margins or added sales incentives.
The grocer’s key objectives are to maximize revenues by nudging shoppers to fill up with their carts with additional or more expensive items, and also to regularly frequent and make purchases at their store. They do this by engaging shoppers through store advertisements, coupons, and offers. They also build customer loyalty by the quality and breadth of their product offerings along with the cleanliness of their facilities, helpfulness of employees, and speed of check-out lines. Further enhancing a store’s appeal are amenities like upscale bakeries, delicatessens, and meat departments, cafés, and coffee shops, garden sections, availability of stamps, money orders, and other financial services, cooking classes, and much more.
Once in the store, shoppers are further enticed to spend more with weekly specials, signage, and sales tags on shelves and products. Displays, end caps, and product demos further elevate awareness of featured products, and drive sales.
For the most part, the store owns the relationship with the customer, encouraging shoppers to:
- Increase the number of items in their cart
- Purchase items with higher margins
- Make frequent purchases
- Prefer their store over competitors
The supplier – be it a local dairy or multi-national food manufacturer – doesn’t have many options for influencing shoppers once they’re inside a store. Most shoppers already know what they want to purchase, have preferences for specific brands and items, and know the approximate price they want to pay. If they’re in a hurry or keeping track of a child tagging along, they’re less likely to explore new products or dillydally at a display.
While signage, sales tags or coupons dangling off the ends of shelves could clue consumers into trying new or different product, for the most part, they’re on a mission to purchase what they need, and then quickly check-out.
What’s True in One Channel…
This consumer behavior also applies when it comes to shopping for commercial products. For instance, when buying a new hand-held multimeter, electricians probably already know the features and specifications they needs to do their jobs, along with the price they want to pay, and preferred brand. When they walk into a retail location, such as a Grainger, Fastenal or Home Depot, they can fairly quickly hone in on a handful of tools that meet their criteria. After evaluating them, they can make a final purchase decision.
If a sales people is consulted, they might recommend a tool, based on their understanding of competitive tools’ features, performance, and price. However, unless they’re highly persuasive or perceived as an authority figure, their recommendations could be disregarded.
The tool manufacturer, at this point, has almost no influence. Their only means to persuade buyers is to have a point-of-purchase display, signage, or highly convincing messaging on their product packaging.
When selling online, the influence of the manufacturer is further marginalized with customers browsing or using a search function to find what they need, adding products to their online cart, and then checking out.
There’s no “Field of Dreams” when it comes to placing a product in a channel, whether brick and mortar or online. Having a product on a shelf or listed online doesn’t ensure it’ll sell. Of course, there are exceptions. If a product is highly desirable or being touting by friends and associates, it could sell with minimum sales or marketing effort. For the most part, when selling through a channel, the onus is on the manufacturer to engage in activities that strengthen their brand, create demand, and provide incentives long before customers consider making a purchase.
In the food industry, coupons are the most common ways to boost awareness and sales. According to the website, I Y Coupon Month, “79.8% of consumers regularly shopped with coupons in 2012, compared to 63.6% during pre-recession 2007.” Furthermore, only 4.4% were for non-food items in 2012.
More insightful, only 21% of shoppers search for coupons while in a store, indicating the importance of promoting products and their unique features prior to customers having a need. Offering a coupon at point-of-purchase makes the shopper feel better about the purchase, but may not be enough to dissuade them from choosing a competitive product.
Keep in mind, coupons or offers can’t fuel purchases unless a product (or brand) is likeable, memorable, and the price is equal to or exceed the perceived value to a customer. Even if a product has all of these traits, the manufacturer or supplier must effectively identify target markets, create communications that convey the value of their products, and select vehicles that reach the chosen audiences. And then, as the saying goes, “rinse and repeat” multiple times until their brand or products are recognized and sought after by customers.