New Research Finds In-Store Snack Sampling Has 'Category Expansion Effect'
MADISON, Wis. — The snack category has found its niche with in-store product sampling.
According to new research from the Wisconsin School of Business at the University of Wisconsin-Madison, in-store snack sampling events not only generate immediate sales and increase brand recognition, but can build long-term sales and are more effective than other forms of non-price promotions, like special product displays.
The study — which was conducted by Qing Liu, Wisconsin School of Business associate professor of marketing, Sandeep R. Chandukala of Singapore Management University, and Jeffrey P. Dotson of Brigham Young University — also found that in-store sampling produces what is known as a “category expansion effect,” leading to increased total category sales, not just sales for the sampled product.
"Retailers prefer sampling events to price-based promotions, such as coupons or temporary price reductions, because these events encourage consumers to try a product and build loyalty that won’t disappear once the price goes back up," Liu stated. "We were able to show in-store sampling can lead to a long-term sales lift, one that positively impacts other brands in the same category, and generates better results than simply relying on improved product display efforts.
"These findings give store managers and brand managers important new information they can use to expand brand and category sales," she added.
The study looked at data from in-store product sampling in the diet/health snacks, frozen snacks, salty snacks, and snacks from a large coffee shop chain categories. The focal products for in-store sampling included new product introduction, as well as existing products from national and private-label brands.
In addition to identifying both an short-term and long-term carryover effect for in-store sampling events, the study found that conducting the sampling event multiple times provides a sustained impact on sales that dissipates more slowly than after a single event. The findings also suggest that stores with a smaller assortment of products benefit more from holding sampling events than larger stores.
Researchers also examined optimal approaches that retailers can use to plan sampling events that take into account the frequency of the events, store selection and location.
"In-store sampling is a highly effective form of quality promotion," Liu said. "These experiential events add value to a product without altering consumer expectations of price, so sampling should be used more frequently by brand and category managers seeking to expand product penetration and sales."
An Assessment of When, Where and Under What Conditions In-Store Sampling is Most Effective is available for download here.