Cap Off Profits with Endcap Impetus

Few among successful retailers ignore the selling appeal of endcaps—displays of products at the end of an aisle on a shelf or rack perpendicular to the aisle. In studies at University of South Australia, endcaps at the front of a store, facing the entrance or the checkout counters, uplifted sales by an average of 346%. Endcaps at the back of the store, facing the storage area or the building’s rear wall, uplifted sales by 416% on average. One explanation is that it’s easier to see products on endcaps than on aisle shelving.
     Tripling or quadrupling sales certainly enhances profitability, even considering that retailers commonly feature discounts on end-capped items. Actually, another explanation for the sales lift achieved from endcaps is that shoppers come to associate endcaps with good discounts and so pick out end-capped products because of subconscious habit. In other studies, the sales lift ranged from 23% to 1200%. Further, because only a small percentage of items can be displayed on endcaps in a typical store layout, a retailer can negotiate with suppliers to get slotting fee payments for endcap placement of products. This adds to the profitability.
     But those University of South Australia researchers were interested in the substantial difference between 346% and 416%. Why did rear endcaps lift sales more than did front endcaps? One reason is that the rear of a store is generally less crowded than is the front, so shoppers are more likely to linger at the back. But a more intriguing reason revealed itself when the researchers tracked down what led to the sales lift. For the front endcaps, it came mostly from increased purchases of the specific items that were on the endcaps. But for the rear endcaps, the sales uplift came largely from increased purchases of items on the aisle shelves adjacent to the endcaps. The rear endcaps were attention magnets, drawing people into the aisles.
     University of Minnesota studies indicate that you can increase this sales lift by featuring in the adjacent aisles items which are companions to those on the endcap and carry the same brand name. When a customer purchases an item carrying a specific brand name, the customer becomes more likely to prefer the same brand name when going on to select an accompanying item. Matching brand labels suggest to shoppers that the two products were specifically designed and tested to work well together.

For your success: Retailer’s Edge: Boost Profits Using Shopper Psychology

Click below for more: 
Space Out for the Hoity-Toity
Consider Matching Brand Effects