CPGmatters: Heinz Measures Shopper Behavior To Spur Traffic Flow and Sales
Through a special arrangement, presented here for discussion is a summary of a current article from the monthly e-zine, CPGmatters.
By deploying sophisticated video analysis, Heinz uncovered some key insights around maximizing category adjacencies and end caps in the frozen food aisle.
Its "Frozen Aisle Benchmarking" study analyzed the top ten most-shopped categories in the frozen food aisle to compare traffic flow and sales conversion. Chris Shaw, Group Leader, Category Business Planning, Heinz, outlined his testing and results at the Shopper Insights in Action conference recently in Chicago. His co-presenter was Priya Baboo, president of shopper insights for VideoMining Corp., whose technology powered the research.
"If you think about traffic for premium ice cream or breakfast," said Mr. Shaw, "it brings up the question: If we could drive more traffic, would that actually drive conversion within the store? We were actually able to measure this. We were able to look at which categories actually were more responsive to more traffic. What we found out was when breakfast, premium ice cream, and frozen potatoes were exposed to more traffic, it drove higher conversion in the store."
The research found that grocers have a better chance to increase sales from shoppers already going down the aisle versus trying to get people who aren’t shopping the category to go there. More importantly, the research found that two of three shoppers in the frozen food aisle only buy one category – even though there is a wide range of products for breakfast, lunch, dinner and desserts.
So the challenge, said Mr. Shaw, is to determine what to do in the aisle or on end caps to drive conversion by better understanding the dynamics of cross purchase.
He pointed out that single-serve meals for lunch and dinner are typically stocked in one frozen food aisle, while single-serve breakfasts are in another aisle. "People come into the store trying to fill a bucket of meal occasions. But retailers are trying to make it difficult for them to shop by sticking these meals in different aisles."
The research showed that single-serve meals and breakfasts are key categories for end caps. That’s because they generate the most traffic exposure and also have the highest cross purchase. Two is the optimal number of categories to drive conversion within the store.
"As you add more categories to the end caps, conversion actually decreases," Mr. Shaw cautioned. "We don’t know why. Is it too confusing? It doesn’t stand out so they don’t stop? Â But clearly, it gives us some direction on leveraging some of this cross purchase information as well as understanding what’s the optimal amount of categories to have on an end cap. This kind of data gives us some ammunition to go out and really think a little bit differently about how to merchandise a category."
Discussion Questions
What lessons does the Heinz “Frozen Aisle Benchmarking” offer around driving cross-purchases at supermarkets? How should grocers be rethinking the way they maximize end caps and category adjacencies?
This isn’t too much of a mystery. Too many categories on an end cap mean too many choices for the shopper. In the “Paradox of Choice,” Barry Schwartz describes the negative impact of choice overload. Or — put another way — too many choices slow the shopper down too much…so she won’t stop to expend more time (one of her 3 resources in store, to paraphrase Sorensen). It is “too expensive” in terms of her time budget to figure out what’s on offer there.
Supermarkets, and others, are experimenting with “man aisles.” Perhaps the time is right to test a “singles” frozen food section.
One of the issues with conversion may be if too many categories are displayed, the less variety of each that can be featured. This could create the perception that the item selection is limited and the shopper does not seek out the main display of the selected categories.
Sorry, but I for one need to see more of this study.
“The research found that grocers have a better chance to increase sales from shoppers already going down the aisle versus trying to get people who aren’t shopping the category to go there.”
WOW!!!
So if I don’t shop for frozen foods at all, it’s hard to sell me any individual frozen SKU or mix of SKUs. Hmmm … stop the presses.
I guess I’m tired of one-dimensional behavioral studies. Who are these shoppers? Why are they in the store? What’s the rest of the cart look like?
Give me some more context and then … maybe … I’ll pay more attention to the results. Otherwise it sounds like another attempt to place complex analysis on sub-standard empirical observation.
Think the Hawthorne Effect or the Heisenberg Principle here. There’s always more than meets the eye.
I agree with Ryan.
I’d like to understand more too; especially around the test-control approach and scale of the study. It’s very hard to comment on the findings otherwise.
With the scale of shopper card data, it is easier for retailers that have this to establish effective adjacencies and end cap solutions through a rigorous test-and-learn approach. This data can also help see whether incremental sales are coming from loyal customers or cherry-pickers to establish how important they are for the business.
CPGs can drive these studies too or collaborate on them with retailers to gain their category and brand specific insights.
Interesting study. I just met with the CEO of Spirenow.com. Their consumer essence study impressed me because it helps manufacturers and retailers point the right deal to the right person at the right time. The offers at this point are outside the store (email, coupons, etc.). The next step is helping a retailer determine the best cross promotional end caps to run during which weeks. Using consumer essence data they could find items that index really high as a pair and promote them together.
Understanding what items index high when cross merchandised is extremely powerful. I like what the study explained. What would now be interesting are intercept interviews to ask consumers specifically why they bought 1 or both items displayed. This would help answer Mr. Shaw’s question of why 2 items do better than 3 or more on an end cap. Also helps tweak cross merchandised promotions in the future.
I agree with Mr. Mathews — give me more to chew on (pun intended).
What is the context of the study?
Oh – and of course adding categories hurts conversion.
Help me understand — more traffic results in more sales, right? That is, if “conversion” means “sales.” Every effective study states its objectives in the first few pages. I’d like to see the Statement Of Objectives for this study.
When it’s easier to shop, it’s easier to buy.
THE AISLE is cold. It is a destination, not a pathway. Its case doors get foggy. It’s difficult to see ALL my choices. It’s difficult to compare prices. I want to get in, get what I know and get out.
THE ENDCAP is convenient — it is my pathway. It’s (relatively) comfortable to shop. Its selection has already been edited. It’s likely on price promotion. I am delighted to get something I wanted and enticed to consider something I didn’t know I wanted.