Out of the Box

Point of Purchase and Impulse Buying

By Menachem Lubinsky on January 26 2007

There were at least two marketing studies recently that pointed to the importance of in-store marketing. In one study, more than 70% of consumers said that they always add at least one item to their shopping cart, an item that they had not planned on before coming to the store. A similar number in another study said that they were influenced by point-of-purchase ads and promotions.

A few years ago a major discount store calculated sales of items that are within several feet of the check-out counters and found the number to be staggering. Even after customers had stacked their carts with what they came to shop for and then some, it seemed that they still added items like candy, batteries, and magazines. In the end, the counter sales were nearly 5% of store sales.

There is nothing new in the fact that shoppers are influenced by the environment of a store. A great deal of planning goes into the layout and displays in a store, or at least it should. But what I gleamed from several of the studies is that it is possible to flag products that a store may want to push. This is particularly true for new products. Stores can, for example, put an emphasis on products by putting them in end caps, hang special posters in strategic places, and occasionally have a live person direct people to the product, which is often the case when manufacturers or distributors do in-store demos.

One store in the Southwestern US as a matter of course shifted the location of certain dry goods every two to four weeks and then tracked the sales for different products in different locations. As you may have guessed by now, the location of the goods had a direct impact on the sales results. Locations that seemed to do well were near the entrance, in the middle aisles and near check-out counters.

A successful point-of-purchase tool that we have all been exposed to is the in-store flyer, which may be the same as those distributed door-to-door. One survey indicated that nearly half of all shoppers pick up the flyers, simply looking for good deals. Most of the items that shoppers pick up are usually not the ones that they came into the store in the first place.

The modern-day challenge that has become so much a part of retail culture is to get the shopper to buy as much as possible. “Once they’re in the store, let’s maximize their cart,” is the conventional thinking here. If a customer is accustomed to buying a certain line of goods at a given store, the objective is to get that consumer to broaden his or her vision and to buy other lines as well.

Most of us often shop on impulse, falling prey to the lures of our five senses. In marketing such buying is called “impulse buying,” which can often be influenced by how the retailer positions the product. Impulse buying can make a big difference to the bottom line.

Children are even better than adults in pinpointing products on the shelf that they just must have. Retailers hope that parents will give in to the whims of the children and add to their baskets.

I am sure that you like me have shopped in stores that beg for some kind organization. One store I visited had a sign in the store, right near the entrance that read: “If you can’t find it, just ask for it.” The trouble was that the proprietor seemed very harried and not in a very friendly mood. I couldn’t help but think just how much sales is lost with a store where nothing is displayed properly, boxes lie open with merchandise, and you risk tripping on some clothes that have fallen from somewhere.

While our disorganized merchant comes from one extreme, there is the well-organized large store with plenty of stores, but with no help in sight on the other extreme. People often walk around just looking for anyone who might help them. “Do you work here?” is a common question. “No, I’m looking for the same salesperson you are.”

Nor is the salesperson any longer the appropriate term to identify the people on the floor who are supposed to be helping you. Today they are called “associates” which may not make any difference in how you feel about them, but apparently makes the “salesperson” (oops!) feel better.

The point is that there can be a perfect order in point-of-purchase marketing, including in-store advertising, properly stocked merchandise, signage, and courteous help. Why look for new business when that business is already in the store. It is a well kept secret of marketing that if you want to grow your business, simply work with your existing customer base.

Understanding a few psychological tidbits that make us all tick is important. Identify items, for example, that are ideal impulse buying items, and make sure that it is “in your face.” Position colorful merchandise in a centrally located place. Discount items that are pricey or that simply need a level of awareness. Utilize flyers, offer occasional demos, and rotate merchandise that seems to be moving slowly, are some other points of advice that some call merchandising, but is to me all part of the marketing mix.

Finally, operate under the assumption that your customer has choices rather than making the customer feel as if he or she is lucky to be shopping in your store. Remember, the best way to ward off competition is to always assume that you either have strong competitors or that you soon will have.

Menachem Lubinsky (mlubinsky@lubicom.com) is President & CEO of LUBICOM Marketing Consulting (www.lubicom.com, 718.854.4450) a firm that specializes in strategic business and not-for-profit planning and implementation. LUBICOM is also well known for its role in developing such major events as Kosherfest, Jewish Expo and Jewish Marketplace.

Out of the Box is a collection of strategic marketing articles that Lubicom has published on various topics, trends and ideas in the marketing world. The articles have been published in the Hamodia weekly newspaper circulated on three continents to a readership of well over 100,000.

The name, "Out of the Box" is a term used frequently in business nowadays to describe creative thinking that is not the norm. It is meant to help a business pull away from the pack or separate oneself from the competition. It is to some extent fraught with risk, simply because it is not the run of the mill thinking, but it is at the same time the key to reaching the next opportunity.