Customer experience insight Supermarkets are part of our everyday lives and we generally take them for granted.
BOGOF’s appeal to our Nucleus Accumbens
Other promotional techniques also use subtle psychology to prompt more shoppers to buy products. For instance the commonly used Buy One Get One Free (BOGOF) promotion makes us feel that there is more to gain and less to lose if we select the product. In
some cases this is a fair deal so long as we don’t end up throwing away the excess because we don’t need it.
However, it isn’t simply a case of the retailer giving away products. By employing a BOGOF effectively, and retailers have a lot of experience and data that they can analyze associated with this practice, not only do BOGOF’s result in shifting twice the number of items but they also prompt more people to buy them. This uplift in the volumes of items sold has two benefits, firstly, for items that can be stored in the kitchen cupboard the promotion ensures that the retailer will capture a larger volume of the overall market for that product over a longer time period since people are less likely to subsequently buy more of that product on another occasion at another competing store. Secondly, the promotion enables both the retailer and product manufacturer to take advantage of economies of scale both in terms of production and distribution since with an increased volume of the product being sold through any one store the unit cost of supplying the product is reduced and as such although the unit price of an item to the shopper is reduced the profit margins associated with it if managed effectively can be inflated.
But promotions aren’t the only way to get us to buy things, so now let’s take a step backwards in the process of shopping. Before retailers can close a sale they need to get us to stop and look at the products on the shelf. To achieve this there is a need to attract our attention. Considering the supermarket is one of the most complex environments that most of us encounter on a day to day basis (30,000 products spread across a similar amount of square footage of floor space) and shoppers are moving through the environment at a rate of about 1m / sec, this is no mean feat. We tend to block out the visual noise of most of the products in a supermarket and our walking speed means that anything we pass has a very limited opportunity to attract our attention.
At most we can read and comprehend between three and six words per second, so word based signs are of limited value in attracting attention and retailers and manufacturers need to rely on more basic approaches such as the use of shapes and colors.
Compiled in Editorial Board of Retailiran