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.
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.
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.