Survey Says Fewer Brand Decisions Made at the Shelf

By George Anderson, RetailWire

Editor’s Note: This article is an excerpt from one of RetailWire’s recent online discussions. Each business morning on RetailWire.com, retail industry executives get plugged in to the latest news and issues with key insights from a “BrainTrust” of retail industry experts.

As an AdAge.com article points out, it has become common for those in consumer products to state that 70% of all decisions on what brand to buy are made at the shelf. A new study from OgilvyAction contends that it's time to throw out the old number and go with a new and lower one.

According to the study, 39.4% number is the real number of consumers who wait until they're in a store before deciding what brand to buy. About 10% change their minds while in the store and 20% leave a product on the shelf that they intended to buy. Nearly 30% of consumers wind up making a purchase from a category that they didn't intend to buy from before walking into a store.

"That 70% figure we've all heard over the years always sounded a little high, and we all know it's a little high," said Peter Hoyt, executive director of the In-Store Marketing Institute. "Some think it's a lot high. I think what the Ogilvy study does effectively is help decompose [the data]. I think it's closer to what we can accept as statistics having some validity. ... But it's not that 70% of every shopping cart is made up of something people didn't [originally] intend to buy. That's just not real."

The original 70% study was conducted in 1995 by Meyers Research Center for the Point of Purchase Advertising Institute (POPAI). In a statement, POPAI continued to support the 1995 findings. "There have been various studies that have arrived at different in-store decision rates over the years, based on unique methodologies, trade channels, and the context and location of consumer interviews. POPAI welcomes any research that helps brands, retailers and agencies understand the strategic importance of marketing at retail."

The OgilvyAction study was based on interviews with 6,800 consumers in the U.S. (14,000 total across the globe) and covered shopping behavior in 13 categories including beverages, confectionary, hair care, and household cleaning products.

While the new research failed to answer just how much advertising outside the store environment influences purchases, it did determine important factors that drive impulse purchases. Sampling and product displays ranked one and two.

"The good news for marketers is that a product display and sampling can build brand equity," Jeff Froud, senior strategic planner for OgilvyAction, told AdAge.com. "No matter what rulebook you studied when you were studying marketing, price promotions don't build any brand equity and in some cases can be equity destroyers."

"More and more of our communication is moving to store," A.G. Lafley, chairman and chief executive at Procter & Gamble, said last month at the International Advertising Festival in Cannes. "And the reason it's moving to store is that more and more consumers are... making their purchase decisions in store. And in a period where you have a fair amount of food price inflation, we think more of that shopping list, whether it's just in [a shopper's] head or actually written down, is being decided in the store."

Pursue at the Point of Purchase
“Getting through to the consumer with your product message and features is easier and more effective at the point of purchase,” says Dan Nelson, CEO of Leadership Resources. “The amount of clutter in more traditional media and the options of what consumers watch, read and view on the internet and cable has made effective use of advertising dollars much more difficult.”

One analyst acknowledges the impact of sampling and product displays on sales. “Whether it's 70% or 40%, the key point here is the immense opportunity that retailers and their suppliers have to dramatically influence consumer buying behaviors,” says Kevin Graff, president of Graff Retail. “Now, imagine if you can the impact you could make on performance if you could engage the workforce in the stores to the point that they become brand ambassadors, both for the store itself and for key products.”

The power of reviews and targeted offers are the way to go, says one analyst. “Impulse shopping is alive and well. But the shelf is now digital,” according to Liz Crawford, president of Crawford Consulting. “Increasing dwell time at the shelf, whether 3D or virtual, is still the name of the game. The field has moved, but the game is still afoot.”

Will The Logo Mean A Kinder, Cooler Wal-Mart? Can The Retail Giant Live Up to the Logo Change

By Andrew, Bogucki, Principal & Creative

Retail monolith Wal-Mart has taken the plunge and changed its identity. While I’m referring specifically to the logo and all the design elements that support it, a new aesthetic identity can also indicate a shift in a company’s corporate identity in a more universal sense.

Changing a corporate or brand identity is a big undertaking. When done right, it sends a powerful signal to the outside world. It makes you sit up and take notice, ready to hear the rest of the story. But if there is no story… well, it can do more harm than good.

Changing a logo, to use a personal analogy, is a little like changing your “look”: new wardrobe, new hairstyle, new glasses, etc. It sends a signal that something about you is new or has changed. When the loveable but slightly scruffy and lazy mailroom guy suddenly shows up to work clean-shaven and wearing a bespoke suit, people will notice. The message he’s sending is: “I’m not lazy anymore! Give me the chance and I’ll prove it to you!” And if, in fact, he changes his lackadaisical ways and becomes more disciplined and pro-active, then management may truly see him in a new light, and potentially offer him new opportunities.

But if the new suit is simply a cover-up for the same old lazy habits, the message he is sending is hollow, and will quite likely bring even more scrutiny. The same principle is true for companies and brands.

Truth be told, perceptions of the highly profitable Wal-Mart have started to suffer from decades of aggressive business practices and dubious employment policies. Now the bulk of the revenue-generating customer base might not be paying much attention to those issues. But on top of that, the world’s richest company has always had a decidedly un-cool, low-end, bargain-basement image. There’s no question that a re-positioning on some level is in order. So what’s Wal-Mart’s new story? Well, based on cryptic postings like this (sourced from identityworks.com), it sounds like a touch-up:

“This update to the logo is simply a reflection of the refresh taking place inside our stores and our renewed sense of purpose to help people save money so they can live better. The updated logo won’t begin to appear on storefronts until the fall."

In contradiction, the logo seems to be signaling a bigger personality shift than that. The former bold, all-caps, industrial strength typography has been replaced with a lighter, friendlier, upper- and lower-case treatment. This makes the name feel more approachable, as though being used in a conversation instead of an institutional pronouncement. The deep, monopolistic blue has been traded for brighter, less ominous cyan. This adds a certain freshness and energy to the mark. The military-style star has turned into a bright yellow spark. While not the most own-able symbol one could choose, it certainly feels more contemporary, optimistic, and yes, lively. And the hyphenated WAL-MART has become the single word Walmart, making it feel like a proper name, instead of a coined reminder of the mega-retailer’s somewhat humble roots. All-in-all, the logo change sets expectations for a pretty different version of the Wal-Mart experience.

The store environments themselves need to play a big role in that experience. The obvious competitor in the mega-retail space is Target, which has always understood the value of good design in all aspects of the brand experience; and its favorability scores overtook Wal-Mart’s last year in CoreBrand’s Brand Power Analysis. Shopping at a Target (while not exactly like browsing specialty shops and boutiques in, say, Paris) is certainly a different experience than shopping at a Wal-Mart. Much of the merchandise at Target tends to be better designed; the graphics and packaging are more sophisticated; the overall environment feels downright warm and inviting compared to Wal-Mart’s stark, fluorescent, Five-and-Dime glare. Revamping the in-store experience for Wal-Mart should be a large part of signaling change. What those changes are remain to be seen.

So what’s the rest of the story? At a cursory glance, certain changes are noticeable. Wal-Mart is stocking and promoting many “green” products, demonstrating not only environmental-consciousness, but purportedly allowing families to save money in energy usage. Their new high-production-value commercials feature lifestyle and benefit messaging, a shift from the pure price-slashing message from before. And new licensing deals are being sought out, such as an exclusive clothing line from rapper Master P, to add a hip, contemporary edge to the image.

It’s certainly a start. Wal-Mart is a mighty big ship to turn around, with a fair amount of brand baggage to purge before perceptions can really begin to change. Sheer scale, longevity, aggressiveness and ubiquity have woven Wal-Mart quite firmly into a very specific part of American, and increasingly world, culture. The new logo signals a pretty big change. Can they back it up? We’ll just have to wait and see.

With over 15 years of experience in developing world-class brands, Andrew
directs all creative activities at CoreBrand. Before joining CoreBrand,
Andrew was Design Director at Interbrand where he was integral in creating
corporate identity systems for clients such as MCI, 3M, and BankBoston.
Since joining CoreBrand, Andrew has developed a full range of design and
identity systems for numerous global brands including AT&T, American Century
Investments, BearingPoint, Catalent, MasterCard Worldwide, Tektronix, and
Thomson.