Knowing which products sell more with displays and promotions can allow retailers to use in-store promotions most effectively, according to a blog on Nielsen Wire. David Kellen, director, price and promotion practice, and Kurt Kaiser, senior manager, product leadership, at Nielsen said impulse food buys less than $5 that come in multiple servings are the best sellers when put on display.
Stockable “must have” products or “easy-to-eat” meals are the best sellers for displays and deals, they said. In a survey, toilet paper sold the best when on display (82 percent higher sales), where as yogurt (28 percent), beer (15 percent) and toothbrushes (14 percent) did not sell as well.
Consumers don’t generally go for expensive items on display or with a temporary price reduction, they said, noting products under $5 experience much more lift (43 percent from display; 44 percent for price reduction) compared to items greater than $5 (23 percent from display; 32 percent for price reduction). They recommend large discounts of more than 20 percent or more to promote expensive items.
When retailers offer multiple items in one promotion, the items should be able to be consumed in different servings, easily stored, and in numbers that make sense (e.g. a five-pack lunch item that corresponds to a five-day work week). Also, they noted, the total price should be less than $10, with each item being less than $1.
Shoppers like deals and promotions for food items, but are more interested in convenience over price when it comes to drugs and medications. Kellen and Kaiser said this is due to shoppers buying food on impulse and medications only after planning.
However, brand loyalty trumps display promotions, they wrote.
Using this information can help manufactures and retailers increase promotion sales. They noted a situation where “Manufacturer X” saw declines in sales, but a private label brand saw increases. Instead of the typical option of lowering prices for eight weeks, and using feature advertising for four weeks, Manufacturer X ran predictive analytics to determine eliminating two weeks of feature activity and replace them with two three-week periods of lower prices, would increase sales. Doing this grew unit and category sales by 0.9 percent, increasing profit margins by 2.4 percent, boosted retailer profits by 0.8 percent and decreased spending by 3.1 percent.