Hershey’s has long been a sales leader of bagged candy in the
main aisles of grocery stores. However, the candy giant’s
success has not translated into the more profitable sales of
individual candy bars at checkout lanes.

Kirk Ward, Hershey’s VP Integrated Business Intelligence
explains, “You make more dollar sales in the back end of the
store from packaged candy priced at $2 to $3 per bag. But the
product margin of the individual candy bars is much higher, so
you can make a very large profit margin by increasing your trades
at the checkout.”

“We knew retailers are typically more interested in selling
manufacturers space on the front end than in managing their
business and sales up there,” he adds.

So Hershey’s decided to raise sales by taking matters into their
own hands -- conducting a three-pronged research campaign.

“We wanted to figure out for ourselves what people were buying
and not buying, and try to manipulate the retail environment so
we could better maximize sales.” Ward shared these details...

-> Hershey’s Four-Pronged Research Approach:

1. First Hershey’s looked at all their existing research.

“We did some deep digging into the past, sort of like an
archaeologist would do, to look at what was published or already
collected to see if we hadn’t analyzed it in a certain way.”
Hershey’s also compiled sales information from retailers to
develop a hypothesis for shopping behavior at the checkouts.

2. Next, Hershey’s conducted a series of ethnographic interviews.
They recruited 42 people to be accompanied by a professional
interviewer on their next shopping trip at their usual store.
Consumers were told to narrate what they were doing and feeling,
while Hershey’s took note of three things:

--Shopper decisions
--Where shoppers went
--Shopper feelings in different locations of the store.

“We wanted to get the shoppers voice to identify what was
motivating people in their whole shopping experience,” says Ward.
“They gave a sort of stream of consciousness explanation and we
asked pointed questions so we could compare the main part of the
store to the register aisles.”

“Although the ethnographic research is more of a subjective
analysis, given the ways people talk about things, it’s vital to
hear the consumer’s voice. It’s better than a focus group
because patterns of behavior aren’t just being described, you’re
witnessing them, and hearing the ‘why’ behind each purchase.”

3. Then, Hershey’s did observational research near the checkout.
Interviewers were stationed opposite the registers toward the
front of the store with a clipboard. They recorded:

-- Purchases off the front cap
-- Types of motions each shopper made—specifically recording
which way they looked; right or left, high or low.
-- Whether shoppers touched something or put it in the cart

“It’s hard in a sense because you have to watch for where they
are looking and you can’t always see where their eyes go. But
you can definitely see if they touch something and if they’re
looking at magazines or candy,” says Ward.

4. Finally, a subset of shoppers was interviewed after they
finished paying. Hershey’s asked them about what they bought at
the checkout, why, and whether it was an impulse buy. Each
participant was given a $5 coupon for his or her next shopping
trip.


-> Why Hershey’s Used More Than One Type of Research:

While the consumer’s voice is invaluable, talk alone has its
drawbacks.

Ward explains, “A lot of consumers will say what they think is
the “right” thing to say, or something that doesn’t reflect their
true behavior. They will tell you what they perceive they ought
to tell you—like to take the candy off the front aisles because
they don’t want to eat it, it’s too fattening, not good for them.

“Or, they might not want to be seen as impulsive or different, or
they want to be seen as saying something smart. No one ever
admits to reading the National Enquirer, but we sure observed a
great deal of people looking to see which baby was captured by an
alien that week. The only way to know for sure is to watch
people.”

“If you want to leverage your customers you have to know what
turns them on or off to really understand what they’re doing.”

Therefore, Ward says you must approach your research project from
fundamentally different ways to reconfirm data. Observational
research is instrumental in verifying the subjective.

“The observational was basically tabulation and cross tabulation—
how many shoppers we saw and how many shoppers looked a certain
way, touched, bought.”

“In the end, we not only hypothesized based on previous research,
and had customers telling us why they shopped the way they did.
We could verify what was going on with front-end purchasing by
actually watching it.”


-> Hershey’s Six Critical In-Store Discoveries:

#1. Consumers said their shopping trips end with the last item
they buy off the shelf.

“Shoppers revert to a sort of check-out mode when they get to the
front end. Some said they were practically immune to shopping at
the registers.”

#2. There are too many other distractions near the register
aisle.

“The variety of choice creates such a clutter that shoppers don’t
really even see things. Or, people are concentrating on checking
out, paying and leaving the store.”

#3. Consumers said they want wider checkout aisles. Shoppers
said more space might promote a greater appreciation of what was
around them, or make them stay longer.

#4. In the 1000 trips Hershey’s observed, only ten percent of
shoppers bought anything off the register aisle.

In fact, 75% of people who go through the checkout don’t even
look at anything on the aisle there. “They basically just take
the stuff out of the front cart and put it on the belt, or
they’re getting their money out and paying their bill,” says
Ward.

#5. Consumers don’t bother to look lower than waist-level. The
hottest selling spot was waist to shoulder level, and they never
bend down to buy.

#6. Shoppers look equally to the left and right side, but buy
more on the right. They tended to buy familiar things not new
things, despite what CPG’s think about the ability to raise sales
by putting the word “New” on a label.


-> How Hershey’s Intends to Use the Research:

Ward says he hopes feedback and data will help guide a redesign.
But, he knows that changes that appeal to customers may not be
the best thing in terms of retailer’s sales. In the end, it’s up
to the stores to adopt the suggestions.

“A part of our category management efforts will be to share what
we learned with retailers to let them know how to enhance their
sales. It’s basically a retail environment tactic to help sales
people rearrange to sell more high-margin items. Hopefully it
will help stores make more money and help us sell more product.”

Some of the things Hershey’s may recommend are fewer varieties
near the register, a roomier aisle, more facings of items, better
signage, or something to entertain customers.

“There are a variety of different layouts we’ve designed,” says
Ward. “The next step is to actually test it out.”


-> The Cost of This Combination of In-Store Research:

Ward says, “It’s very cheap, regardless of your situation. No
matter the cost it’s very valuable because everyone has to shop.
It’s worth investing in any research that will teach you ways to
manipulate a store environment to your advantage.”


-> Ward's Biggest Tip for Other In-Store Researchers:

Never tell the participants why you’re doing the study.
“It’s hard to do a double blind test, but you can do quality
control checks like calling back a some of the shoppers
interviewed to ask if there was any interviewer bias.”

Interviewers knew researchers were working for Hershey’s. If
interviewees asked what the research was for, they were told it
was a part of a general grocery store survey on shopping
behavior.

Want to meet Kirk Ward in person? He will be speaking at IIR &
PDMA's “Voice of the Consumer” Conference, December 9th-11th
at the Fairmont Hotel in San Francisco. You can find more
about it at http://www.iirusa.com/voc/