When you walk into a supermarket, you probably want to spend as little money as possible. The supermarket wants you to spend as much money as possible. Let battle commence.
Picture: monkeyc.net
As you enter the store your senses come under assault. You will often find that fresh produce (fruit, vegetables, flowers) is the first thing you see. The vibrant colours put you in a good mood, and the happier you are the more you are likely to spend.
Your sense of smell is also targeted. Freshly baked bread or roasting chickens reinforce how fresh the produce is and makes you feel hungry. You might even buy a chicken “to save you the bother of cooking one yourself”. Even your sense of hearing may come under attack. Music with a slow rhythm tends to make you move slower, meaning you spend more time in the store.
Supermarkets exploit human nature to increase their profits. Have you ever wondered why items are sold in packs of 225g, rather than 250g? Cynics might argue that this is to make it more difficult to compare prices as we are working with unfamiliar weights. Supermarkets also rely on you not really checking what you are buying. You might assume that buying in bulk is more economic. This is not always the case. Besides, given that almost half of our food is believed to be thrown away, your savings might end up in the bin anyway.
Strategies such as those above get reported in the media on a regular basis. Mark Armstrong analysed retail discounting strategies for The Conversation last year, for example, and the Daily Mail recently published a feature on making “rip offs look like bargains”.
You might think that awareness of these strategies would negate their effectiveness, but that doesn’t appear to be the case. It would be a strong person that does not give way to an impulse buy occasionally and, for the supermarkets, the profits keep flowing.
Product placement
There are marketing strategies which you may not be aware of that also have an effect on our buying habits. Have you ever considered how supermarkets decide where to place items on the shelves and, more importantly, why they place them where they do?
[related title=”Supermarkethacker” tag=”supermarkethacker” items=”6″]When you see items on a supermarket shelf, you are actually looking at a planogram. A planogram is defined as a “diagram or model that indicates the placement of retail products on shelves in order to maximise sales”.
Within these planograms, one phrase commonly used is “eye level is buy level”, indicating that products positioned at eye level are likely to sell better. You may find that the more expensive options are at eye level or just below, while the store’s own brands are placed higher or lower on the shelves. Next time you are in a supermarket, just keep note of how many times you need to bend down, or stretch, to reach something you need. You might be surprised.
The “number of facings”, that is how many items of a product you can see, also has an effect on sales. The more visible a product, the higher the sales are likely to be. The location of goods in an aisle is also important. There is a school of thought that goods placed at the start of an aisle do not sell as well. A customer needs time to adjust to being in the aisle, so it takes a little time before they can decide what to buy.
You might think that designing a good planogram is about putting similar goods together; cereals, toiletries, baking goods and so on. However, supermarkets have found it makes sense to place some goods together even though they are not in the same category. Beer and crisps is an obvious example. If you are buying beer, crisps seem like a good idea, and convenience makes a purchase more likely. You may also find that they are the high quality brands, but “that’s okay, why not treat ourselves?”
This idea of placing complementary goods together is a difficult problem. Beer and crisps might seem an easy choice but this could have an effect on the overall sales of crisps, especially if the space given to crisps in other parts of the store is reduced. And what do you do with peanuts, have them near the beer as well?
Supermarkets will also want customers to buy more expensive products — a process known as “upselling”. If you want to persuade the customer to buy the more expensive brand of lager, how should you arrange the store? You still need to stock the cheaper options, for those that are really are on a budget. But for the customers that can afford it, you want them to choose the premium product. Getting that balance right is not easy. My colleagues and I are among the researchers striving to develop the perfect algorithm taking into account size, height and depth of shelves, to direct customers to the right product, at the right time.
Shoppers won’t always obey the science, but these techniques are retailers’ most effective tools in the fight for our weekly budget. The battle between supermarkets and their customers continues.
Graham Kendall is Professor of Operations Research and Vice-Provost at the University of Nottingham. In 2001 Graham Kendall has received funding from EPSRC (Engineering and Physical Siences Research Council) for research that is related to this work.
This article was originally published on The Conversation. Read the original article.
Comments
16 responses to “How Supermarkets Make Us Spend More”
HAs been happening for years! plangrams change constantly and the big 2 muscle the companies for prime shelf position or “Down down” pricing ,etc. Some companies refuse and this can lead the the store not stocking their products. Happend with john west and coles a few years ago.
Eye level and within reach are 2 big factors also. It’s clear to see on sales stats that products at eye height sellthrough is much higher than those say on the bottom or top shelves
Also supermarkets spend HUGE amounts of dollars on this kind of research. There is a fake store (not revealing location) but it is literally a fake store with fake cardboard products and bread rolls and everything! There’s heaps of good articles on here about shopping. Best ones are.
-Don’t go in hungry
-Have a list
-Don’t just go down every aisle (only go down an aisle if you need to!)
-Learn the layout of your local store (Most will have a leaflet showing which product categories are in which aisles.
-Just because it has a “special” ticket doesn’t mean it’s good value! (saving 10c when you can buy the homebrand for $2 cheaper)
-To score some discounts go in when full timers are finishing 5-6 as they will markdown all the stock that needs to go that day before they go. Strike up a deal with them. How about I buy 2 of them if you take another 10% off? most will because they are under pressure to clear it, otherwise it’s waste
One last thing. ALOT and I mean a crap load of the homebrand products are actually made by the same companies that do the branded ones, so on that note buy cheapo 🙂
I agree with all of it and I can see what the research is getting at.. But at the same time, it’s like, if I want doritos, I go and get doritos.. They might be eyelevel or not.. Id have no idea..
Such research can be dangerous because as you say it costs millions every year, and there’s no real metric to know if its working, because they just constantly do it.. So performance could be identical without it or with just logical ordering.
I know a lot of them also break common ingredients up by abstract ways to try and get people to walk around the shop more.. This is transparently obvious and very annoying. Any time you find yourself wondering ‘Why the hell is that over there…’ or struggling to find your way around, that’s why.
like have you ever seen chips and dip in the same isle! Nope.
At our local Woolies, corn chips and salsa are next to each other.
Crackers are not in the same aisle as dip but the dip is kept in a chilled display cabinet facing the end of the aisle where crackers live.
One well known and common tactic is to put basics like milk at the back of the store so you have to walk past everything else to reach them. To reach the milk at the local Woolies, you need to walk past about 80% of the aisles. In the frozen food section, frozen veggies are at the back and desserts are in a set of freezer cabinets that face down the entire length of the non-dessert frozen foods.
At our local store, salsa is in the chip aisle and also the Mexican section. They have different size/style containers in the different sections. We always buy it from the chip aisle as it’s cheaper in that container.
Same with advertising, how worth while is it, which forms/campaigns are best? No company has a 100% clear idea because it is seasonal, subjective, impacted by what competitors are doing, impacted by what celebrities are wearing, impacted by what life style shows are on tv and what they are cooking. Not many companies pull all their advertising for any real length of time to give real statistics to back up or avoid future advertising.
Coles had some real interesting stats about a huge increase in sales for certain lines after that ingredient was featured in Masterchef.
I’m sure a bit of googling would find it.
Secret is already out!
http://www.reuters.com/article/2014/03/04/us-fashion-chanel-idUSBREA231MG20140304
ompster – Many thanks for this. As the original author of the piece in TheConversation this is valuable information. I’d love to do a full scale academic article on this topic, but data (and hard facts) are hard to come by as, as you say, a lot of research is done in-house and they don’t (understandably) make it public.
Thanks again.
micheal_debyl: Thanks, I agree with your comments. As I say above (assuming moderation is done in the order I posted!) there is a lot of research but we are not ware of it.
Interesting topic though.
Damn supermarkets must hate me, I enter knowing exactly what I need, fast paced walking, dodging people and trollies, grab my items, pay through self service and bail.
You’re a man.
I work for one of the big 2, I always say to family and friends, look above and below the eye level for the products you want, you can find some pretty good brands and deals if you are prepared to look away from the magic eye level. Always check the unit pricing, sometimes the special is not so special when you look at the unit pricing, sometimes the bigger or smaller pack may be a better deal even though its not on sale. And keep an eye out for stuff you use all the time, even if you dont need it now if you see it on sale at a good price grab it and put it aside, I do that with things like paper towels, soap, cleaners etc.
Supermarkets are not the only markets where you find fake stores set up to produce the utmost best layout and or ingredients stacked in the right order for taste etc; either!
I always see my mates saying “advertising does not work on me”, their just in denial. I was playing burnout paradise a couple years back which has ingame adverts on billboards that update. saw an add for a subway $5 footlong meatball and drove my car up to it to read the fine print. was shocked to see it was an actual Australian add and it was still valid. paused my game on the spot and drove to subway. If someone denies advertising works on them just point out their douchebag beats by dre.
I hate this kind of thing, because it makes me feel like nothing more than a monkey who responds exactly how the scientists said they would, so when I go into a supermarket, I know exactly what I’m going to buy, what brand and where it is so I’m less likely to feel patronized. But with that said, if I’m in unfamiliar territory, I get confused, because one supermarket will place bread at one end, others at the other. Some even put frozen foods at both ends of the supermarket, so you have to walk past everything to get to cheese, then back again for butter.
What I also hate, is when they put those saving tags over the original price tag, or add terms and conditions to the sale tag. Last night I went to Woolworths to buy stuff we didn’t have for dinner, and I also bought a Yogo mix for dessert. Sticker said it was on sale for $2, but looking at the fine print (which you had to lean in to read), it said the price was for Everyday Rewards card holders only. The non-reward price was listed under in a much smaller font.
The sale tag over the original tag is annoying too, because at one point, sales tags didn’t have the original price, so you had to shove the sale tag aside to see the original (and it was a bitch to move too, often taking the original tag with it) and you then found out the saving was only a few cents that would probably get rounded off anyway. It’s changed now (you can see both prices) but I still check to see if they’re using two types of unit pricing to throw people off or if the prices are different.