Back when supermarkets first came into existence, marketing to shoppers was so easy. You’d take out an ad in the local paper, or perhaps send some coupons in the mail, and let the shoppers run wild (with their shopping carts) throughout the store.
Then it got a little more complex, as stores began using new pitching methods, such as electronic mail, and new tactics, such as having a person on aisle 7 with samples of Name Brand Tasty Expensive Crackers.
But we haven’t seen anything yet, as supermarkets look for more and more ways to increase their pencil-thin profit margins.
Forbes’ Tom Van Riper reported on some research conducted by the University of Pittsburgh’s Joseph M. Katz Graduate School of Business. Faculty member J. Jeffrey Inman and others wanted to look at supermarket buying habits. The first part of their research was fairly intuitive, when you think about it.
[O]n average, shoppers cover half the territory in a grocery store, about 1,400 feet. Every additional 55 feet traveled triggers an additional dollar in unplanned spending, which occurs because shoppers end up seeing more items they want to buy.
Considering all of the effort that supermarkets devote to product placement, it isn’t surprising that we shoppers end up buying a lot of things that we didn’t intend to buy. So for supermarkets, the secret is to keep us wandering around in the store, like rats in a maze, so that we see more and more stuff that we want to buy.
But how can we be encouraged to wander around the store? Inman and his colleagues conducted some additional research with smartphone-using shoppers, as Forbes’ Van Riper explains.
Inman took one sample of people and divided them into two groups: 1) those getting a coupon [via smartphone] for a product located close to the path they would normally travel, 2) those getting a coupon for a product further off that path, forcing them to cover more ground in the store.
Result: those forced off the beaten path spent $21 more than they had planned to, while those sticking closer to their routine spent $13 more than planned, a 61% difference.
Provided that the shopper opts-in to smartphone use and purchase and location tracking, this provides powerful potential revenue for stores.
And it’s certainly a better incentive plan than having attack dogs chase shoppers through the store.