RETAIL VIEW: Sampling gaining favor but cost is limiting factor
- April 19, 2005
The grocery industry and consumer press seem to be inundated with stories about the advantages of in-store sampling lately.
One Florida newspaper article recently sang its praises, outlining efforts by stores with pepper jelly and cream cheese on pretzels, French bread with a dipping sauce, and a pre-mixed meatloaf.
The article quoted a staff member of the Food Marketing Institute stating that in-store food demonstrations are on the rise as surveys show that 70 percent of consumers would shop at a specific store if they knew it would offer samples. Another 86 percent said they were more likely to purchase a new brand if they were able to try a sample first.
Across the country, a press release from Mass Connections detailed similar sampling efforts in California. That release discussed a year-and-a-half-long retail industry study that examined the effectiveness of in-store events " through sampling, demonstrations and retail entertainment " and their effect on the retail marketplace.
The study revealed that:
- About 90 percent of retail executives believe in-store sampling influences consumer spending and satisfaction.
- By a ratio of 10 to 1, Consumer Product Group management prefers in-store sampling to traditional advertising.
James Madden, the public relations representative for Mass Connections, admitted that the firm is biased, as it is in the business of offering in-store sampling to both retailers and consumer product groups.
"We work with both [consumer product groups] and retailers on sampling events, and they are definitely a very effective method of introducing new products," he said.
But Mr. Madden also believes that sampling is an effective way to increase sales on any product as a majority of samplers in a store do buy the product after sampling. "We are biased, but we find it to be much more effective than regular advertising. In advertising, you do not know if your message is reaching the consumer. With sampling, you know that you are immediately reaching your customer."
While some of the club stores, most notably Costco, have their own in-house sampling departments, Mr. Madden said that almost every other retailer uses a third-party company such as Mass Connections for sampling programs. "In fact, I can?t think of any other retailer, other than Costco, that does it themselves."
The Mass Connections representative said that a key to an effective promotion is the person running the sampling booth in each store. "It is why we pay the top rate in the industry. Our samplers are paid $11 to $14 per hour, and so we attract the best people."
The Northwest Pear Bureau uses sampling as much as probably any group in the produce industry. Kevin Moffitt, president and chief executive officer of that commodity organization, has been involved in extensive research on the subject, and he said it is a tricky proposition.
Its effectiveness is not the issue. Virtually everyone agrees that any product can benefit by having in-store samples. "Sampling can enhance a shopper?s experience in the store. Many people find shopping a bit of a drudgery, and sampling can help spice it up," Mr. Moffitt said.
Offer any free product on a table in a grocery store and it is going to draw a crowd. Sampling has become part of the Costco experience and it is obviously very popular among its shoppers, as the three- and four-deep lines in front of every sampling table prove.
The question remains: Is it cost-effective? The Produce News
explored this issue three years ago in a front-page story, and frankly not much has changed since then except that the cost of sampling continues to rise.
Mr. Moffitt said that it typically costs $120 to $180 per store for a six-hour day of sampling. He said that this all-inclusive price factors in the cost of the product, the cost of the sampling, the rebate to the store if that is involved and the cost of setting up and supervising the effort, which the pear bureau executive said is critical. "We hire independent people in each area to make sure the sampling is being done correctly and that the samplers have ripe fruit. It [the sampling event] doesn?t do any good if the samplers don?t have ripe fruit."
The pear bureau uses sampling for the specific purpose of educating consumers as to when a pear is ripe and introducing these consumers to the sweet taste of a ripe pear. Mr. Moffitt admitted that a percentage of consumers do not like the texture of a pear and never will. But for the vast majority of consumers, he believes that the difference between a non-user and a frequent user is the knowledge of what a truly good pear tastes like. "Our research shows that 30 percent of pear purchasers buy 90 percent of all pears."
That research indicates that many people are buying pears only once or twice a year. It is not much of a leap to guess that those people are not having a good experience.
The area auditors that the pear bureau hires on a part-time basis to oversee the sampling events often pick up the fruit a week early, ripen it and deliver it to the store for the sampler. They then check on the samplers during the day to make sure they are educating the consumers properly.
For pears, Mr. Moffitt said that the most crucial information the samplers need to pass on is that the soft shoulder is what indicates that a pear is ripe. "Many consumers do not know when a pear is ripe," he said. "It doesn?t necessarily change colors? and there are no other universal outward signs for all pear varieties.
For this reason, Mr. Moffitt likes to use the same sampling companies over and over again when they are in a specific market so that there is an opportunity to use the same individual samplers. That is also an advantage, he said, in working with a retailer such as Costco, which has its own staff. "It is great when we get a sampler that has had experience with pears."
Mr. Madden said that Mass Connections takes great care in "pre-educating? its samplers before a sampling event. "We send them information ahead of time about the product. If we have a video [such as the ripening information that Northwest pears offers], that?s great."
Heather Magnussen is the Wal-Mart sales manager of Promo Works, a sampling outfit headquartered in the Chicago area. While it might be advantageous for a sampler to have produce industry knowledge, she said that the number-one trait her firm looks for is "good sales ability and a good relationship with the retailer. We like to hire samplers that can sell the product [to the consumer] and know the store managers and works well with the retailer."
Ms. Magnussen said that the location of the sampler within the store is very important, and a sampler who has been in that store before and knows the manager can provide a better job for the product.
In his experience, Mr. Moffitt believes that it is not a good expenditure of money to use sampling for a well-established product. Not surprisingly, both of the sampling firms would not make that comment. "It depends upon what you would like to accomplish," said Ms. Magnussen. "Sampling is very effective in taking a product and putting it in the hands of the consumer. But that doesn?t mean it has to be a new product. You might have an established product but have a new recipe."
In a six-hour sampling day, the Promo Works representative said that a product is usually put in the hands of 300 to 400 consumers, "and we also usually hand out a couple of hundred [point-of-sale] pieces."
At an average cost of $150 per store, it costs the consumer product group around 40-50 cents per customer if it is the only product being sampled. Mr. Moffitt said that one way to cut the cost is to partner the sampling effort with other items. In the case of pears, the bureau have partnered with bagged salad, dressing and cheese companies. Whether the cost is worth it depends on the objective, which is probably repeat sales.
The Northwest Pear Bureau has participated in follow-up studies to quantify its results. During the day of sampling, comparing store sales with the previous year, the stores saw a 78 percent increase compared to the control stores, which had a 12 percent increase in sales. For the following few weeks, the stores that had been hosting the sampling events showed a 9 percent increase in sales compared to 5 percent for the control.
?I?d say a 5 percent overall increase in sales would be worth it," said Mr. Moffitt.
But he cautioned others in the produce industry to go into the business of sampling with their eyes wide open. The pear bureau efforts have been refined over the years, which is why Mr. Moffitt believes it is a successful program. "We have refined and honed our program to go after only the highest volume and highest traffic stores. We gave trimmed the number of days of sampling that we do. But it does work for us."
The proof is definitely in the numbers.