Are demos just not worth it?
Through a special arrangement, presented here for discussion is a summary of a current article from Frozen & Refrigerated Buyer magazine.
While in-store demos are known for building trial and a sense of theater at Costco, Trader Joe’s and other outlets, not everyone is happy with them. Respondents to an extensive phone and e-mail survey of frozen and refrigerated food vendors say demos are costly and inefficient compared with other — especially newer — forms of promotion. Most retail respondents agree that there is room for improvement.
Our annual survey about industry issues didn’t even ask about demos, but lots of people volunteered opinions anyway, which surprised me. Retailers seem to understand vendor frustration with demos but say that demos need to be improved rather than discontinued.
"The current programs that the vendor community uses are ‘Mabel with a table.’ They lack pizzazz sufficient to justify the spend and/or deliver the anticipated results," says one chain executive. "We are looking at sourcing these out and taking them to a new level. Eliminating them totally is a bad move because it can drive trial. Companies need to invest in solutions that offer excitement."
Photo: RetailWire
Another chain executive says, "There is always a need for balance of trade and demo monies. There’s no doubt that a strong ad with display will normally get more trial for a new item than demos. But there is need for some theater in the store and I have seen some brands fail because they did not allocate at least some funding to demo. Again, it’s balance."
But like I said, vendors are generally less than thrilled about demos. Here are some typical comments:
- "We control the demos by contracting certain days that they have to do them and give each demo person packets on the execution, etc. With that, we also understand that some demo people aren’t very good no matter what you do. Bottom line, our biggest issue with demos is you’re hitting only those consumers who are in the store during those hours on that day — a pretty small audience in most cases."
- "Demos are very expensive and are done for the retailer’s benefit. You have one day, four to six hours, inexperienced demo people, and the demo could be scheduled during the week — not a heavily shopped day. We have for 30 years given them our best shot and it is a losing way to promote. A TPR (Temporary Price Reduction) or electronic coupon which can be good from two to four weeks is far more effective and the way the shopper buys today. We refuse to do demos and just turned down an account because the buyer wanted $6,000 worth of demos and a demo plan in place."
Aside from all that, vendors think demos are a dandy idea.
Discussion Questions
Which is closer to the truth? Do retailers impose high fees and controls, thereby making demos a profit center rather than productive promotional opportunities, or do vendors just hate spending on promos?
Poll
BrainTrust
Dave Wendland
Vice President, Strategic RelationsHamacher Resource Group
Tony Orlando
Owner, Tony O's Supermarket and Catering
Experiential marketing remains a viable path to success. Are in-store demos the only way to achieve this? No. But if you look at the success of Costco and its successful demonstrations and in-store sampling, you cannot dismiss this as a path to consider. Sure there will be limited opportunities to reach the masses, but the halo effect of such efforts has proven successful in building shopper loyalty, creating in-store theater and driving brand familiarity.
Although it may not be for all, I’m a fan of in-store demos and feel this creates in-store excitement and differentiation. For now, I’d say keep in part of the mix until a new method emerges that puts samples in customers’ hands more effectively while keeping the spotlight on the brand. Can’t wait to see what is “in store” for our future!
I think it’s the latter — while effective, demos reach only a small subset of potential buyers and so cost-per-conversion must be relatively high. I wonder, though, how much goodwill a vendor buys when they are part of a store’s demo program. Does it get that extra product in the store? More consideration for something the vendor wants to do down the road?
Demos are among the easiest thing for vendors to test and measure since they can naturally happen in some stores and not others. That makes this an answerable question, brand-by-brand, rather than a theoretical question.
I love this subject, as the vendor frustration in my opinion is justified. Most demos are handled quite poorly, and the folks running these for the most part are drones. If you want to partner with a vendor then you need to hire someone who actually knows how to sample, with results measured to exceed at least 50 percent success or more, which is not pie in the sky. I think if the stores actually used their well-trained employees, rather than someone who shows up with zero enthusiasm and has no clue how to engage a customer, you would see more vendors agreeing to demos.
I train my employees personally how to sell and demo in our deli, and we have measured success. It is an art, and yet quite simple, but it isn’t done very well from what I have experienced in most stores. I could probably write a blog on this, so in short, cooperation is needed to make this work as the current system highly favors the stores, since the expense for everything falls on the vendor.
Now if I get motivated I will try to write something up here to give you a how-to on this topic, as it can be a win-win for both parties. Stay tuned.
For most retailers demos are a profit center, but that is not the problem. Some products will never demo well no matter what. For others it is the people who are poorly trained, lack knowledge and have no idea what their objectives are. What is wrong is when a vendor is just going through the motion to feed another retailer profit center. Answer some simple questions. Is this a product that should be demoed? How many cases must a demo sell to break even? Have you gotten the best person for the task? Does the product target market match the store’s actual customers?
I agree that “Mabel with a table” demos are not very efficient and sometimes even a waste of money. However, TPRs and coupons aren’t a good substitute.
What’s good about sampling:
The question is, what else could we use to replicate these benefits? How else can we simulate these deliverables?
Surely unmanned sampling is one option. Perhaps there could be a kind of sampling machine to dole out fresh product and shut down after so many hours.
The store is an extremely attractive touch point with customers: in-store demos represent an effective promotional tool for both vendors and retailer.
When done well, with Costco being exemplary, in-store demos are a powerful mechanism to stimulate trial and create awareness for the vendor. For the retailer, they emphasize a multi-sensory and differentiated shopping experience that influences the in-store purchase decision.
As to the truth, reality here depends on operations of the specific retail chain and the vendors’ marketing budget. Each one defines and measures success differently, but maybe if both take the longer view with the shopper as the starting point, they may find more commonalities than not.
The existing demo methodologies are poorly conceived and I have to agree with Tony on how important correctly trained, enthusiastic people are to the existing process.
Without turning into a commercial for our interactive sampling technology, there are other smarter, more measurable, more engaging ways to go about sampling, especially for Millennials, than “Mabel with a table.” Stores and brands simply have to decide to rethink what isn’t working and open their minds.
Demos at Trader Joe’s and Costco are sure better than those at Amazon.com … If brick-and-mortar retailing is “at risk,” demos offer an important point of differentiation. And not just food — cosmetics, fashion ideas, speaker systems, etc. So if this is the case, retailers are foolish if they don’t promote promos, even as a break-even.
Selling price and free samples just don’t add up to a lot of profit for the provider side of the business. Packaging, as in trial sizes and coupons, works well when properly managed.
Perhaps a better starting point is to ask “How does the consumer perceive demos?”
If we all can agree that in-store promotion has become an ongoing marketing expense item over the past 20 years. It is growing, because in-store promotions WORK.
The Prosper Media Behaviors & Influence (MBI) Study asks over 15,000+ respondents to offer there view on which of 21 different in-store promotional programs influence their purchase decision. Those 21 promotional methods include shelf coupons, sidewalk sales, coupons, in-store flyers, in-store television, etc.
The highest rated in-store promotion is coupons. They are followed by product sample demos, shelf coupons, in-store flyers, product samples delivered to home. In the case of Costco members and Trader Joe’s shoppers, the only shift is that product sample demos is # 1, surpassing shelf coupons.
Going to the Store is a trip to the bazaar. By making it an event, as opposed to a chore, Retailers and Vendors create an engagement between product and customer, be it for trial or for loyalty. Not every consumer is going to purchase the chocolate nugget. However, they may come back on another occasion. Both the Retail and the Vendor provided a reason for a smile, as they offered a bit of lagniappe.
If you have the right product, bring on the demo. They work in Home Depot on Saturday mornings, as well as at Costco and numerous other Grocery retailers across the country. Make shopping exciting.
Retailers have created high barriers to doing the demos—fees, exclusive providers, etc. I believe quality of demos has dropped—again, neither retailers nor manufacturers want to pay for high-quality personnel. It’s a case of you get what you pay for.
I believe “demos” can be effective. However, not everyone is cut out to be a promotional sales specialist. I agree the “Mable with a Table” is less effective and possibly a waist of money. However, the professional sales specialist with the correct training on customer engagement, knowledge of product, and the ability to execute a demo is well worth the money and will see a increase in sales. The issue lies within the retailer having a working relationship not only with the Demo Team but, also within it own Corporate office. Lack of communication caused “Demo” being executed on product the store does not currently have in stock and therefore is ineffective.
Bottom line is that upper management, whether at the retailer level or vendor level, needs to ensure the person assigned to the demo have what they need because if they don’t, they can not execute a successful event and then it was a waist of everyone’s time and money.
I would say this is the reason for most failed demos.
The answer is both. Retailers are guilty of turning every facet of marketing promotion into profit centers, and vendors have not spent the time or thinking space to see if they can transform the demo into something more. With the right thinking, demos can be transformed into events in the store, rather than just a person sampling. Of course, many grocers will not permit such activity, seeking just to “take the money and run,” but some will. And if manufacturers can document the success of such events in growing trial of a category, not just brand shifting, then other retailers may jump on board.
The quote in this discussion article that struck me was “Retailers seem to understand vendor frustration with demos, but say that demos need to be improved rather than discontinued.” This really rings true for me.
For most vendors, there is very little insight into demo execution and results. As the CEO of a mobile data collection platform, we have customers that use our app to eliminate these blind spots. By setting specific goals for each demo and then tracking those metrics in-store, vendors can get a better understanding as to whether each demo was successful or not.
On the execution side, mobile data collection can help management to see how a demo went. Geo-tagging, time-stamping and actual photos of the demo area, signage, and marketing collateral can also give insight as to why one in-store demo was successful while another was not.
By getting better insight into demo execution and setting specific goals for each demo and tracking those metrics, vendors’ in-store demos can be greatly improved.
I find it telling that “Retailers seem to understand vendor frustration with demos, but say that demos need to be improved rather than discontinued.” Explaining this is really simple: Retailers see nothing but upside from demos, and vendors have to pay for them.
With the benefit of a few years’ experience offering a cloud-based platform specifically designed to manage and optimize demo programs, I can report that the retailer position that demos should be improved is right on the money (literally). The onus is on vendors to run a program that focuses on performance and accountability, like with any salesperson. Most current demo programs are open-loop and virtually un-managed. Many vendors quit simply because this kind of close management isn’t in their wheelhouse.
The good news is that today it’s easier and more cost-effective than ever to gain control of a demo program. We’ve seen clients increase the sales productivity of their demos by a factor of 5-10x (i.e., several hundred percent) with very straightforward tweaks to their approach, and achieve a positive ROI with a very short payback.