Evolving Toward Data-Driven Next-Gen Product Demos
Do product demos drive sales at your stores? Do they support your goal to offer a great, differentiated customer experience? Would you even be able to tell if you wanted to know?
Demos have been a grocery mainstay forever, and their value seems obvious: Brands like them because they encourage product trials, and retailers value them because they drive sales and offer engaging experiences for shoppers.
But companies on both sides of the equation question whether these often-labor-intensive promotions are worth it. Demos can be expensive to stock and staff across an entire store network. They can also be disruptive to routine store functions, pulling managers and associates away from their day jobs. For all of the cost and hassle, old-school demos just aren’t that impressive: A tabletop with cheese puffs in Dixie cups doesn’t look like an engaging retail experience; it just looks like a snack break.
A progressive approach to demos offers unique and immersive brand experiences, led by hyper-knowledgeable brand representatives with access to real-time data that helps them continuously improve and provide the ultimate experience for shoppers. In other words, to deliver a truly impactful demo, grocery stores will need the right people, presentation and real-time data visibility.
Are Demos Worth It?
Demos are traditionally trusted as a sales-driving tactic. A 2016 Progressive Grocer survey of retail deli executives found that 65 percent of respondents believe product sampling is a great tactic to encourage customers to buy new products from the department. As for customer experience, some grocery retailers, like Whole Foods Market and Costco, have successfully turned demos into a defining draw for their stores – personal-finance bloggers famously recommend hitting up Costco for a free lunch.
However, digital technology is influencing shoppers’ in-store purchasing decisions in ways that will disrupt the ongoing effectiveness of traditional demos. A study from Deloitte found that while most grocery purchases still happen in-store, shoppers are making decisions on what to buy well before they arrive, by reading recipe websites and blogs. Digital interactions influenced 51 percent of all grocery sales in 2016, on par with other retail categories like apparel (56 percent), home (58 percent) and auto (59 percent).
As a result, the careful science behind grocery store merchandising, promotions and product placement is changing, and certain tactics, like demos, will need to evolve to hold the same influence over buying decisions. Given the potential for diminishing returns, retailers will need to work smarter to ensure demos deliver enough bang for their buck.
Who’s Running Your Demo?
Without a doubt, the top challenge faced by retailers that are struggling with the effectiveness of demos – or really any retail tactic – is that they don’t have the right people interfacing with consumers. Demos are “edutainment”; they entertain and educate shoppers about the products that they’re trying, so they should be led by people who can tell consumers all about the product they’re trying.
Typically, though, demos are run by contractors who aren’t as knowledgeable as customers expect – the infamous “Mabel with a table,” who can hand out samples but can’t tell people much about what’s in the box. The result? Customers leave the demo with a free snack, but no new knowledge and limited incentive to buy or stick with that brand.
The solution is to staff demos with representatives who actually know the brand and are passionate about its products. Brand-right representatives offer interactions that normal contractors can’t, because they can answer questions based on their personal experiences using the product, and they bring a level of enthusiasm that makes the demo exciting for the customer, and more successful for the retailer.
Presentation Makes a Difference
Data also show that great presentation can improve the effectiveness of an in-store demo.
Recently, one leading national beverage brand tried three separate strategies over three weeks: a standalone sale, a normal tabletop demo and an eye-catching “smoothie cart” demo. The smoothie cart was a counter on wheels, complete with a colorful umbrella, two brand-selected representatives and plenty of samples.
Sales increased 46 percent when the vendor ran a sales promotion by itself, and 26 percent during the week it ran a normal tabletop demo. The flashy smoothie cart drove the biggest increase, however – 108 percent compared with a normal week. Combining a promotional sale with the smoothie cart provided the biggest overall sales jump, a whopping 226 percent increase. Ultimately, the more unique and engaging the demo, the bigger its impact.
Retailers are Operating Blind Without Real-Time Data
Of course, it’s hard to know just how effective demos are without data. That comes down to a fundamental problem affecting all retailers: Most physical stores lack the 360-degree data visibility that ecommerce merchants enjoy. As a result, neither vendors nor retailers can figure out how effective promotional tactics are in the real world.
That’s changing. When you have brand-right representatives running and experimenting with demos, they can collect data so that you can uncover the specific sales drivers that lead to results. Not only did that national beverage brand identify that the smoothie cart was the best way to run its demos, it also had a clear idea of outcomes and sales drivers. In 10 days, its reps engaged 1,849 shoppers, distributed 1,824 samples and converted 9.6 percent of shoppers – 72 percent of whom were first-time buyers – into purchasers.
Broadly, this type of information will form the growing universe of physical retail data. As the owners of the physical space, retailers will be able to evaluate local demographics, traffic data and even factors like local weather to determine the brands that best fit their stores. Meanwhile, brands will be able to optimize in-store promotions, inventory and merchandising to ensure that they’re creating unique experiences that make customers want to visit the store.
Demos are a good place to start applying data insights. If a product is truly differentiated by touching, feeling and tasting it, then next-generation data-driven demos are the most powerful way to engage customers and drive higher revenues from physical retail.