This Upfront, P&G May Want to Boost Spend on Piggly Wiggly

Research Study Finds That the Store Trumps TV for Making Consumers Aware of Package Goods

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BATAVIA, Ohio ( -- Think TV is the best channel for building awareness? Think again.

Over the past decade, the store has become the single leading driver of awareness of new package-goods products, significantly surpassing TV.

Credit: Source: Nielsen Bases
More than half of consumers in six developed markets cite stores as their source of new-product awareness in data compiled across multiple products and categories, according to Nielsen Bases, which vets the vast majority of package-goods product launches that get tested in the concept stage.

While store shelves have traditionally been the place where marketers seal the deal -- hitting consumers close to the purchase -- their role in driving awareness has been growing, relative to other media. The store beat TV as an awareness driver by a 50% to 36% margin across the six countries -- U.S., Canada, U.K., Germany, France and Italy -- in 2008, the latest year for which Bases has released figures. That compares to a near tie only four years earlier, when the store barely edged out TV, 52% to 48%.

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Heavy category buyers (defined as those three times more likely than average to buy a product) were even more likely to cite the store as their source of awareness (55%) and less likely to cite TV (35%). And in the U.S. both the store and TV were bigger awareness drivers than in the six countries overall, with the store cited as a source of product awareness by 53% and TV by 39% of consumers.

Growing sophistication
In the two years since those findings have made the rounds of package-goods marketers, more companies have started to pay attention to what is going on in the aisles, with estimates now pegging in-store marketing spending at $542 billion.

The growing sophistication of retailers and marketers at marketing and merchandising in-store probably has played a role, said Mike Hess, Carat's exec VP-research, marketing science and consumer insights.

While competition from a wider array of media clearly is a factor in the decline of TV relative to the store over time, Mr. Hess notes the store remains one place almost everyone is exposed to new products, regardless of how fragmented the rest of the media world becomes.

The Bases research is among factors that have made marketers aware of the importance of the store and shopper marketing for new products, said Mike Twitty, director-shopper insights at Unilever Americas, but the recession really showed how important in-store marketing has become.

Numerous surveys have shown consumers are more value-conscious and have spent more time making lists, and vowing to stick to them, since the recession began. But along with all that planning, shoppers also have become more aware of what they're doing in the store, Mr. Twitty said.

"For the longest time, [consumer package goods] shopping has been pretty habitual," he said. "People buy the same 300 [items] over the course of the year, so there was a lot of repeat purchasing, and not a lot of engagement at the shelf. What we saw in the last year contradicted that." And while standing there in front of the shelf, Mr. Twitty said, "One thing they did was check the prices of things they used to buy routinely without giving it a thought. ... So in-store became even more important than it had been in the past for new products or all products."

Value messages
With the economy improving in recent months, he said the in-store environment has changed in ways that help marketers compete on more than just price.

"Shoppers are still focused on value, but they're a little less focused on lowest price," he said, so marketers are better able to focus on performance, taste and the other elements in the numerator of the value equation rather than just price.

Credit: Source: Nielsen Bases
But what works in store is still remarkably simple, he said. Anything that simplifies a value message, such as the recent trend by some retailers of grouping multiple items at the same price point, often rounded to a dollar rather than at the once-favorite 99-cent level, appears to work better.

In the Bases research, the biggest driver of new-product awareness in store was simply seeing the product on the shelf -- accounting for product awareness in 71% of cases where people cited the store. All the other tools marketers and retailers use to drive in-store awareness -- including off-shelf displays, retailer circulars, product demos, in-store media and samples, accounted for awareness in only 2% to 18% of those cases. In-store media and product demos both scored in the low single digits. That helps drive home the importance of packaging and signage, Mr. Twitty said.

But because marketers get so little time to make their point with consumers at the shelf, Carat's Mr. Hess cautioned that marketers also need to take the quality of awareness into account, not just the quantity.

"My concern as a media person is that I'm not sure in-store awareness is the same as the awareness you get from TV in terms of strategic attributes and benefits," he said. "A 30-second spot gives you that ... the unique selling proposition."

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