This article was originally published on CPGMatters.com by Linda Winick.
Determining the right merchandising strategy is a critical first step for brands and retailers to appeal to busy shoppers in store. It’s a big challenge when deciding that a reset is the best solution.
That was the task facing drug store chain Walgreens and beverage giant Coca-Cola, its brand partner. To get the job done, they turned to virtual reality testing.
“Virtual is a tool that helps you visualize and evaluate shelf sets,” explained Melissa Jurgens, GVP Customer Success for InContext Solutions, a provider of virtual reality (VR) solutions and the technology provider in the reset testing.
She spoke in a presentation in Nashville at the recent Category Management and Shopper Insights Conference hosted by the Category Management Association (CMA). Joining her were Liz Picariello, Senior Category Advisor, Coca-Cola, and Emily Miller, Senior Category Manager, All Non-Regulated Beverage & Milk, Walgreens.
The speakers divided the beverage category into immediate consumption and future consumption. The former is a quick single-serve beverage for on-the-go shoppers; the latter includes multi-packs, especially 12-packs. Miller said that shoppers in Walgreens like mini-cans of soft drinks, which need to be featured prominently in the shelf set.
They said the beverage shoppers are very valuable customers because they are a little less price sensitive. These customers shop the entire store, and often look for premium products.
Getting the reset right is critical for Walgreens and for Coca-Cola because the latter’s brands are popular with shoppers. Using In-Context technology, the trading partners deployed virtual testing as a simple addition to the reset process. They tested two distinct ways to merchandise transaction packs: vertical block and brand block.
Coke and Walgreens also sought answers to key questions: what role do beverage packages play in merchandising? What would be the shopper impact of the different merchandising sets? What is the optimal placement for transaction packs?
The indicator test provided objective sales and shopper data to compare planogram in-store potential. For sales impact, it analyzed at the category, manufacturer brand and product performance in terms of units, dollars penetration and buy-rate. For shopper impact, it analyzed satisfaction, likeability, and preference to shop.
Here were the key findings of the testing:
* A vertical block drove highest total category dollars, with a double-digit increase in dollars per shopper for transaction packs (vs. brand block).
* Transaction packs overall and mini-cans specifically performed best in terms of dollar sales in the vertical block (vs. brand block).
* “Preference to Shop” was highest within the vertical block set among all respondents, especially Millennials with most of them preferring a vertical block.
“Working with InContext, we made sure that the changes we made were what the customers wanted,” summed up Miller of Walgreens.