Survey Says: Retailers Give a Little, Get a Lot

Discussion
Nov 16, 2012

Sampling works. That bit of news won’t come as a total surprise to retailers or brands, but new research conducted by Harris Interactive suggests that giving away freebies is an investment that pays big dividends, particularly for online merchants.

According to the research commissioned by IDR Marketing Partners, roughly 90 percent of consumers said they are somewhat likely to buy more from a retailer that adds a free gift with a purchase.

"We find great value in adding free gifts in our customer packages," said an unnamed Bluefly.com spokesperson in a statement. "Extra gifts give our customers an incentive to make additional purchases. It’s a strategy we’ve seen work."

Nearly two-thirds of respondents who made a purchase online said they are somewhat likely to share the experience of receiving a free gift with others. Roughly half of those getting a free gift in a store will share the news. Women, the research found, are much more likely to share their experience than men.

"Customers are more loyal to online retailers that make an authentic effort to connect with them," said Doug Guyer, co-founder and president of IDR Marketing Partners. "Receiving a free product that is relevant to the customer creates a ‘surprise and delight moment’ that they not only remember, but share their positive experience with friends and reward the online retailer with additional purchases."

How would you explain why free samples from online retailers appear to be more effective than those given away in stores? Which retailers, either online or brick and mortar, do you think are the most effective in using sampling to drive sales?

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9 Comments on "Survey Says: Retailers Give a Little, Get a Lot"

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Tony Orlando
BrainTrust

Some consumers understand that any free gift is inherently built into the cost of the purchase, but there are still many out there who regardless of the true cost, still value the freebie. Brick and mortar stores also carry many like items, and consumers can see the best deal, so it makes it real difficult to add some extra money to the purchase, plus give away something free as well.

Marketing is an interesting double edge sword, and online can conceal the deal better than the B&M stores can, and it does give them the advantage. The rest of us out in the retail world have a hard time just making a profit on the initial sale, let alone give something free away, unless you are selling makeup or cologne, which has 80% margins, and then give them something. It goes back to the supermarkets using BOGO prices in their ads, which leads to higher retails to start with. No easy answer to this, in my opinion.

Max Goldberg
BrainTrust

Giving away a free gift is different from sampling. Free gifts can be advertised or included as a surprise. If the free gift has enough perceived value, it can cause consumers to make purchases. If the gift is a gesture of thanks, and is unexpected, it can build loyalty and generate positive word of mouth.

Sampling drives sales by allowing customers to consume the product. If they like what they try, they will buy. Costco does an excellent job in this area.

Both tactics can be effective in driving sales, but are very different in approach.

Ken Lonyai
BrainTrust

There are lots of variables to the situation and without dissecting the study there’s no way to fully know what data was gleaned, but generally, there’s a consumer/product disconnect in b&m sampling practices. That’s exactly the situation that drove us to develop iSample, an interactive sampling system for b&m retailers.

Think of food sampling in a supermarket: there’s a bunch of little taste bites or sips on a table with some product displayed nearby. An associate tries to entice customers to hear about the product while tasting. At least half the people respond to free food because it’s free. The associates selling abilities/interests vary wildly. Short of some impulse buys, there’s total randomness in the process. The store has no idea who tried the samples, what their interests are, what motivates them, what they’d really like to sample, etc., etc., etc.

Executed well online, lots of those issues are resolved through careful data analysis and intelligent sampling offers. Until retailers take a structured, logical, measured approach to sampling or bonus gifts, it will continue to be a hit or miss proposition.

Phil Rubin
BrainTrust
4 years 7 months ago

Sampling is a proven strategy to drive trial and earn trust. Given the challenges inherent for online merchants relative to brick and mortar retailers, sampling provides a way to demonstrate value as a differentiator.

In the loyalty space, this is well illustrated in the fragrance and beauty world to programmatically sample (e.g., Sephora).

Warren Thayer
BrainTrust

When samples are given out in stores, a certain percent of people steer clear because they just don’t to interrupt what they’re doing, or don’t want to deal with a sales pitch. And as someone pointed out, you really can’t track whether these handouts produce incremental sales from specific customers. Finally, some retailers use demos as a profit center, charging vendors such high prices that only those willing to pay will ever get a demo. The deepest pockets, rather than the most unique products, get demoed more as a result. But when it comes to brick and mortar demos, the best I’ve seen are Costco and HEB. When I buy from CVS online, however, sample product arrives in my home when I can give it more attention because I’m not busy shopping. My wife will generally be there, and we’ll talk about the new products. And if I buy one of the sampled products, CVS knows from my loyalty card data. Seems a lot more efficient and measurable to me.

Ralph Jacobson
BrainTrust

I still hesitate to agree that sampling for online may be more effective than sampling in stores. Now in my 35th year in the biz, I can remember many great examples of why sampling has a great ROI when done effectively. I recommend it highly.

Craig Sundstrom
Guest

I think “appear” is the key word here: “nearly two thirds” and “roughly half” aren’t all that far apart — i.e. 60% vs. 50% — and given the different demographics (age, income, etc.) between BM and online sales, I’m reluctant embrace the premise.

As for bribes…er, “gifts” in general, I don’t, in the long run, see this as a positive trend: once everyone does it, it ceases to be a surprise. Instead it becomes just another complication in buying something…just concentrate on making a good sale, please.

Jerry Gelsomino
BrainTrust

It is one of the few ways online retailer can ‘touch’ or connect with the customer. Makes perfect sense to me that if would have a greater affect than with the traditional store which has other connecting avenues.

Dan Frechtling
BrainTrust

While it’s tempting to believe that everyone loves “free” gifts, even sampling may be received as spam if distributed wantonly.

Marketers are well served to sample products when they are consistent with the retailer’s identity and are relevant to the initial purchase they are paired with.

Usually it takes two to sample: retailer and manufacturer. Consumers may feel goodwill to one and/or the other depending on how the sample is presented.

Presenting the sample as a gift from the retailer and the manufacturer–such as a “what’s new” pitch for new products–is a great way to attract repurchase for both parties.

Tony is right that gross margins fund sampling programs. Since manufacturers tend to have higher margins, it only follows that they be invited to participate in sampling or gift-with-purchase programs.

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