Optimizing in-store displays to boost traffic and purchases

Abstract

As digital sales continue to thrive, in-store purchases decrease. To improve in-store retail, displays should be transformed to improve their effectiveness.

Creating effective center displays

Editor’s note: Rajeev Sharma is the Founder and CEO of VideoMining. This is an edited version of an article that originally appeared under the title “Responding to Shrinking Center Store (Part 2): Rethink Displays.”

With the accelerating migration to online sales, there is an opportunity for retailers and manufacturers to collaborate and reinvent the physical store. In this article, we explore how secondary displays could serve as a strategic tool to make up for the inevitable erosion in center store traffic.

Today, secondary displays are largely used by brands as a tactical tool to gain category share, especially in combination with price promotions. Retailers see displays as a way to bring in incremental sales and trade marketing dollars. Significant inefficiencies exist in both display practices and execution without precise in-store measurement and analytics. With changing in-store shopping patterns and evolving store formats, there is an urgent need to reimagine display strategies and to optimize display performance using shopper insights.

Two key considerations for optimizing displays

1. Increase center store traffic

Our data has shown that displays can have a significant impact in influencing shoppers to visit the center store aisle – sometimes adding more value by driving traffic than from direct sales off displays. This signpost effect can be valuable as it invites shoppers to re-experience shelf interactions when making decisions. With potential innovations in center store merchandising, displays can become a valuable partner in attracting consumers to reconsider the experience of in-store shopping.

2. Impulse decisions still exist in slow traffic

Impulse sales from secondary displays – end caps, in-aisle shippers and perimeter displays – can be quite significant; with displays contributing as much as 70% of total sales for some categories in a given promotional week. With the evolution of store formats, there are a lot more opportunities for secondary displays, especially in new service areas where waiting and lingering is now part of the store dynamic. These under-displayed areas include the deli, the pharmacy and online pick-up areas. There is an opportunity to evolve display strategies in these areas to drive impulse sales. While there are new display possibilities, the changing traffic patterns and in-store dynamics mean that both retailers and manufacturers must adapt their display/promotion strategies, otherwise they risk losing a valuable source of incremental revenues or sub-optimal promotions.

Creating effective displays

A big part of optimizing displays is getting the location/proximity right. Location plays a huge role in display performance with as much as 600% variance for some categories based just on location (Display Deep Dive). With the shifts in traffic patterns and shopping behaviors, old display placement rules are very likely to be outdated for optimizing impulse.

Facts to consider:

Grocery store beer displays only close 23% shoppers who stop and engage (on average for 21 seconds).
Carbonated soft drink displays can close sales 40% less depending on the relative position to main beverage aisle.
The closure rate for a beer display at a given location varies as much as 68% for different pack sizes on display.
Bottled water displays performance varies by as much as 450% depending on in-store location.

This is just the tip of iceberg in the widespread inefficiencies we see in display execution. There is obviously a corresponding opportunity loss in financial returns for the promotional dollars spent. Simply improving the display location can have an immediate positive impact on ROI. Using data-driven display locations can lead to a substantial increase of total in-store sales.

Since displays can play a strategic role, better allocation of display space not only leads to more incremental sales but also enhances the in-store shopping experience. This was especially evident during the pandemic when shoppers made more “stock-up” trips and spent a significant proportion of their time in the perimeter areas of grocery stores, making displays even more important for incremental sales and shopper convenience.

Location isn't the only factor impacting display performance. The brands promoted, number of products on display, pack sizes, messaging, price, etc. also impact the engagement and closure rates for displays.

A good location can override the need for sharper price discounts during promotions. We have also documented cases of significant improvement by simply changing the messaging content for a display. Knowing who the primary shoppers are for a product and creating content that appeals to them goes a long way in enhancing the stopping power and performance of displays.

Improving displays through behavioral data

Optimal display strategies can be evolved by following a principled approach, driven by data and analytics, based on measurement of actual in-store shopper behaviors. This allows for quantitative behavioral feedback on the impact of displays.

Fortunately, AI technologies have now made it possible to precisely measure display performance under different conditions, providing a formal fact-based approach for developing display strategies that are optimized for the current shopper and retail dynamics. Below are some key metrics that are relevant for measuring and optimizing impulse performance.

Exposure rate measures the volume of traffic for a given location relative to total store traffic. This metric is key to quantifying the value of a location for driving impulse.
Engagement rate measures the rate at which shoppers take interest in the product displayed at a given location. This metric represents the “stopping power” and depends both on the location and the category/product displayed. For the same display, shoppers may engage differently at two different locations, so all exposure is not equally valuable.
Closure rate measures the percentage of engaged shoppers who buy a product from the display. This metric is largely influenced by product, packaging and pricing. It is also inherently impacted by the impulsivity of the category and is a useful metric for benchmarking across all categories that are competing for a given space.
Relative directional traffic flow measures how much a location’s traffic is moving toward another specific location. This metric can be used to determine the traffic dynamics in relation to the promoted item’s primary stocking location or even a complementary product or category. For example, a salsa display could be used to encourage shoppers to make a trip to salty snacks (for complementary tortilla chips) as well as condiments or international foods (primary stocking locations for salsa, as well as complementary products). This is a metric that helps in leveraging proximity for driving impulse purchases across multiple locations/categories.

Applying the metrics above to in-store displays with different attributes (category, product, brand, price, signage, display type, display size, etc.) allows a systematic analytical framework for developing a fact-based playbook for optimizing displays in a given category or brand using the latest in-store behavior data for a given store format.

Display opportunities

Displays can serve as a strategic tool for both driving traffic to center store and for valuable incremental revenues from impulse purchases. Displays also help in enhancing the overall in-store shopping experience. A data-driven display strategy combined with rapid testing is critical to keep up with the changing in-store dynamics in the increasing omnichannel and competitive retail landscape.