Under the Influence with Terry O'Reilly - Three Foot Marketing

Episode Date: October 7, 2023

This week we’re going shopping. The topic is “Three Foot Marketing.” Research shows that 75% of shopping decisions are made in the store, and they are all made within the last three feet – meaning that critical distance between your shopping cart and the shelf. We’ll examine how stores use design, technology and psychology to influence your decisions - from the moment you walk in to when you line up at the cash. We’ll also look at the interesting tug-of-war that happens between stores and brands. There’s no doubt about it, those three feet have become one of the biggest battlegrounds for your dollar. Hosted on Acast. See acast.com/privacy for more information.

Hi, it's Terry O'Reilly. As you may know, we've been producing a lot of bonus episodes while under the influences on hiatus. They're called the Beatleology Interviews, where I talk to people who knew the Beatles, work with them, love them, and the authors who write about them. Well, the Beatleology Interviews have become a hit, so we are spinning it out to be a standalone podcast series. You've already heard conversations with people like actors Mark Hamill, Malcolm McDowell, and Beatles confidant Astrid Kershaw. But coming up, I talk to May Pang, who dated John Lennon in the mid-70s. I talk to double fantasy guitarist Earl Slick, Apple Records creative director John Kosh. I'll be talking to Jan Hayworth,

who designed the Sgt. Pepper album cover. Very cool. And I'll talk to singer Dion, who is one of only five people still alive who were on the Sgt. Pepper cover. And two of those people were Beatles. The stories they tell are amazing. So thank you for making this series such a success. And please, do me a favor, follow the Beatleology interviews on your podcast app. You don't even have to be a huge Beatles fan, you just have to love storytelling.

Subscribe now, and don't miss a single beat. Due to popular demand, we've dug very, very deep into our archives and are pleased to announce the re-release of episodes from the last season of The Age of Persuasion. And we've remastered them to fit our Under the Influence format. Here is an episode from 2011. Your teeth look whiter than no nose. You're not you when you're hungry. You're a good hand with all teeth. You're under the influence with Terry O'Reilly.

Ooh, that doesn't sound good, Jeff. You know what you need? You need a cough drop. Hold on. Here you go. Thanks. You know, I bought these cough drops last week when I went to the drugstore to get some shaving lotion. Now, I hadn't planned on buying them, but I saw them by the cash while I was in line, so I reached out and bought them.

As it turns out, cough drops have a long history of tempting people at cash registers. In the mid-1800s, a man named James Smith emigrated from Quebec to New York where he opened an ice cream and candy store. One day, a peddler walked in with a recipe for cough drops. Smith bought that recipe and began brewing five-pound lots of the drops in his restaurant kitchen. He sent his sons, William and Andrew, out to sell them in the streets. Soon, the cough drops became very popular. When James Smith died, his sons decided to get into the cough drop business full time. They were selling thousands by then and wanted to brand their product. So they created a distinctive package, complete with their bearded portraits on it,

and renamed the product Smith Brothers Cough Drops. Funny thing though, under William's picture was the word trade, and under Andrew's picture was the word mark, as in trademark. But from that point on, whenever the brothers met someone for the first time, they would assume they were named Trade and Mark Smith. That small problem aside, their business took off. One of the reasons it was so successful was that the brothers were very smart marketers. The Smith brothers asked shopkeepers to stock their items near the cash. They provided bowls for the cough drops so the shopkeeper could count the drops for each sale

and slip them into the branded packages. But here's where their marketing instincts kicked in. The brothers provided a sign that said, Smith Brothers cough drops, only five cents. Then they suggested the shopkeeper make sure every customer got a nickel in their change. Very smart. Just as they suspected, hundreds of customers impulsively flipped the nickel back at the shopkeeper and bought some cough drops. In no time, the Smith brothers had two plants turning out 60 tons of cough drops a day. The psychology they employed at the cash register area

was one of the first times anyone in retail had ever exerted influence at the moment of purchase. That thinking is now applied to just about every retail store on the planet. It's called three-foot marketing, and it refers to the last three feet in a store between you and the shelf. Those last three feet where you make a decision to reach out and choose a certain brand or buy something spontaneously. Let's go shopping together and take a look at how stores

and the brands inside those stores use design, technology, and psychology to get you to reach for certain products on the shelf. You're about to see why those last three feet aren't just a battleground. It's the most fascinating piece of marketing real estate The task of advertising is really threefold. First, it should create a distinct personality for the product in the marketplace.

Second, it should highlight a unique benefit that separates the product from the competition. And lastly, it should send people to a location where that product can be purchased. But the one thing advertising can never really do is make someone buy something. Great advertising can bring potential customers to the door, but that's where advertising stops. Because when you're in the parking lot, you're a consumer. But the second you enter a store, an important transition happens. You become a shopper. That transformation is the bane of advertisers.

Because no matter how many messages they've sent your way or how creative their advertising has been, once you've stepped into a store, you're faced with two things advertisers hate, the curse of choice and the power stores exert on that choice. There's a truism in retail. All sales are made in those last three feet

between you and the shelf. As a matter of fact, research suggests that the majority of shopping decisions are made in-store. In supermarkets, for example, 75% of people arrive without a detailed shopping list. They may jot down the type of product, but not the brand. They may note the quantity, but not the size or price. That means shoppers have left the door wide open for brands and retailers to influence many decisions. How that's accomplished

is fascinating, and it's opened up a whole new substrata of merchandising called shopper marketing. Take store design. Ever wonder why the dairy case is at the back of supermarkets? Because almost all grocery trips include milk, even most quick stops. So stores want you to see lots of other tempting items on your way to the milk section, even if you're in a hurry.

Yes, it would be more convenient to have the dairy aisle at the front of the store so you can run in and out, but that's not good merchandising. It's the same reason why change rooms are always at the back of clothing stores. Retailers want you to be tempted by other things on the way to your purchase. According to a recent Wharton research study, grocery shoppers don't weave up and down all aisles, even though conventional wisdom has always maintained that they do. Instead, most shoppers rarely make it to the other end of an aisle. They make short excursions into and out of an aisle rather than walking the entire length. Knowing that, stores place their most popular brands at the center of the aisles,

influencing you to walk by as many other products as possible, no matter which end you enter from. Most shoppers prefer a counterclockwise shopping path. So, retailers have to design stores in a counterclockwise fashion. Where do you think the most traveled section of a grocery store is? Answer, the perimeter. The outside four walls of a grocery store are called the racetrack. Again, conventional wisdom stated that the perimeter of a grocery store was only incidental to the aisle visits. But research now shows that this is a shopper's home base.

So, as a result, the ends of the aisles, or end caps as they're called, are very important selling tools. Because even if you don't go down each aisle, you pass all the end caps. And here, you'll usually find four selling strategies at work. First, end caps showcase a feature price or sale on a certain kind of product to grab your attention. Second, because you can pick up almost all your staples in the perimeter of the grocery store without having to go up any aisles, the end caps may contain impulse items with high desirability, like cookies, chips, and cereal. Third, grocery stores will also stock end caps with products that give them the highest profit margins,

like pop and snack foods. And lastly, because the end caps are such a premium space, supermarkets and other retailers like big bookstores will charge a premium to brands who want to stock their products there. The same thing happens in the aisles. The premium shelf position is at eye level, or just below that at arm level. So if you keep seeing your favorite cereal there, it's not because it's the better cereal. It's probably

because that brand has paid to be there. Brands pay slotting fees to secure the best shelf location. That concept first started in the 1970s when retailers began charging brands to put their products near cash registers. Now the practice has spread to all other sections of the store. According to a Bnet article, U.S. food manufacturers pay grocery stores

$5,000 to $30,000 to stock every product per store. But the high cost is worth it because this is one of the areas where brands can take back some of the control

of where their products appear on the shelf. Of course, you know who really pays those fees. That would be me. Exactly, brother. So, here's a hint.

Remember to look to the top and bottom of shelves. You may find a great product there at a cheaper price. And just when you finally finish shopping and walk up to the checkout, another entire world opens up. Ever wonder why the perfume section is at the front of department stores? The smell of perfumes contribute to the sensory experience of entering a store, and the look of a perfume counter is attractive. But the real reason is that a high percentage of cosmetics

and perfume purchases are impulse buys. Retailers want you to make a slightly pricey impulse decision before you get too deep into the store where your destination product is. In other words, getting you to make an impulse purchase is tougher once you've mentally spent your money on the bigger purchase. Ever wonder why big box stores have skids of products placed all over the floor that you have to walk around? They want to disrupt your shopping mission. They're hoping one of the products on those skids will become an impulse purchase on your way to picking up that screwdriver you came in for.

Which brings us to another big area where impulse purchases are made. The cash register. As mentioned earlier, brands pay a premium to be in that last lucrative three feet of the store, the checkout area. Lip balm, keychains, and batteries are the perfect impulse purchases. As a matter of fact, more batteries are sold at the cash than in any other part of the store. And while not everyone visits the pet food aisle, everyone must go through the cash. You spend an average of six to seven minutes in line there, so you have ample time to be tempted to make an unplanned purchase. It's a section of inexpensive, immediate satisfaction items, and it's one of the highest profit areas for stores.

Candy, for example, has a 30% retail profit margin. And some research shows that over 80% of households buy their confectionery suites at checkout areas. People's behavior even changes when they approach the checkout. They tend to make quicker, unplanned decisions. Impulse buying, by the way, is more common in some retail categories than others. 25% of shoppers say their most recent spontaneous purchase was apparel. Next comes food, cited in 14% of the cases, followed by accessories and electronics.

Interesting to note that whether you walked or drove to the store influences your impulse buying. People who drove did much more spontaneous purchasing. Can you guess why? People who walked didn't want to make their bags heavier. Human nature is a fascinating study. Music affects how you shop. Specifically, Muzak.

Muzak is not just a generic name for elevator music. It is a brand name for a music delivery system. It was invented in 1922 by a two-star general named George O. Squire. The name Muzak was inspired by Kodak. Squire liked the sound of the word, so he took the muse from music and the ak from Kodak to coin the name Muzak. The first piece of music played by Muzak was a tune called Do You Ever Think of Me? Do You Ever Think of Me was an interesting choice for a background music service, considering shoppers rarely think about music in stores.

After Squire died, Muzak was purchased by William Bowles, founder of the advertising agency Benton & Bowles. The company began to offer what it called audio architecture by creating custom, highly programmed playlists designed to affect behavior. Up-tempo music in offices, for example, reduced absenteeism by 88% and early departures by 53%. It also increased productivity by counteracting the tendency of the human body to slow down during the late morning and mid-afternoon. And, to this day, music is carefully chosen to stimulate shopping. Slower music has the effect of making people shop for longer periods of time,

whereas fast music makes diners eat faster, resulting in more turnover of the tables. Slow music also leads to more drinks being purchased at bars. So the next time you're in a store or a bar where music is being piped in, know that it has been carefully curated to influence your buying decisions. Signage is influencing more and more sales at the store level. For example, Honda research revealed that a certain group of people, specifically teachers, like their affordable Accord model.

But research also revealed that these same teachers like to visit on Sundays when the dealerships were closed. They wanted to look at the cars in the dealer's lot, but not be harassed by salespeople. So Honda devised signs to put in the car windows telling shoppers everything a salesperson would, had one been there. The signs contained all the persuasive features and benefits, including the fact Accords require cheaper insurance than other cars. Honda didn't just post the price, as most dealerships display,

but instead posted influential information. They called the signs Silent Salesman. While TV commercials target consumers, in-store video screens target shoppers. The purpose of the content is not to build brands like TV commercials do, but to close the sale right there in the aisle, influence at the right place at just the right time. Each screen has specific content on it that pertains to the products around it. Get a load of this.

In a Media Week article, writer Katie Backman points out that while 17 million people watch network TV shows like NCIS and The Voice, those numbers pale compared to the audiences that watch screens in American retail stores. Costco, Walgreens, Safeway and Kroger boast weekly shopper counts of 20 million, 30 million, 44 million, and 68 million, respectively. Tim Horton's in-store video has bigger audiences than 60 Minutes, Law & Order SVU, and Survivor. Walmart's TV network reaches 130 million viewers every four weeks. Therefore, the potential for influencing sales with video in the last three feet is staggering. Metro grocers in Canada install screens that show short 30-second videos of meals being prepared

and offer over 3,000 recipes that can be printed out. You can also scan the barcode on a food product with your smartphone and get information on how that particular item can be used in a meal. Powerful stuff when parents are making the most dreaded decision of the day, what to make for dinner. Walmart also put touchscreens in their auto departments. Customers can input their make and model of car, then get a page of tire options sorted not just by brand, but by price. A company called Easy Face is helping department store shoppers eliminate beauty blunders with its virtual mirror augmented reality kiosk. The mirror takes a picture of the shopper and allows them to apply makeup to their image, taking into consideration such things as skin tone and facial features. Shoppers can actually drag different colors, shades, eyeliners, and lipsticks

onto their face image to see how it would look without having to sample them all or buy them and end up throwing them out. They can even choose to share their final makeup image with friends Mobile apps have become an important tool in the last three feet. American superstore Meijer launched an app that not only helps shoppers navigate the shelves of its huge stores, direct them to promotional offers and sales, and map out service desks and washrooms, but it can also show them where they park their cars. Best Buy is one of the most innovative retailers when it comes to smartphones. Every price tag has a QR or quick response code on it. If you scan the QR using the Best Buy app,

you're given product details, specs, and the most up-to-date pricing. Everything you need to buy a certain brand. Or to change your mind to buy a different one. This is no small innovation. Most tags are reprinted twice a month. And that means Best Buy is constantly reprinting millions of tags across its 1,100 stores. It costs millions to change all those tags, but it drives even more millions in revenue. Customers happy, Best Buy even happier. While technology continues to change the way we

shop and begins to exert incredible influence on the last three feet of shopping space, another old-school tactic is almost unbeatable. In-store sampling. Here's a retailing truism that grocery stores have long known. People eat with their eyes first. Brands also love in-store sampling because it puts some control back in their hands. They know in-store giveaways appeal to customers on several levels. First, there is the hunger level that it satisfies.

Mmm, donuts. Second, there is the free factor that everybody loves. And third, there is the incredible willingness of people to taste an unfamiliar product if it's free. For a brand, it's a great way to launch new products or give customers new ways to use existing ones. Take Super Bowl Sunday. This is Frito-Lay's biggest day of the year. So in Canada, they often dispatch 120 game day gurus to supermarkets across the country to see if they could influence more purchases in the last three feet of grocery stores. They handed out playlists to shoppers to plan a game party.

Topping the list was Tostitos chips and salsa. That meant Frito-Lay was able to steer purchases at the store level, something they normally can't do. It resulted in huge revenue gains. Does sampling really work, you ask? Well, a recent Arbitron survey showed that 64% of shoppers bought the product after tasting the sample, 24% bought the sampled product in place of another brand, and 58% who sampled the product planned to buy it in the future. In-store sampling out-influences all other in-store marketing,

followed by product packaging, loyalty cards, and everything else. And there you have it. Just when you thought store design ruled, or technology had the upper hand, or shelf positioning dominated those last three precious feet, isn't it interesting that when the... Sir? Yes?

Have you tried these new wieners in a blanket? Um, why, no, I haven't. Thank you. Isn't it interesting that when it's all said and done, a wiener in a blanket beats them all. Marketing is a funny thing. A brand can do 10 years of great advertising, can send you messages that are smart and respectful, but once you enter the store,

all bets are off. Because at that moment, you instantly transform from a consumer into a shopper. That means you can be influenced in the last three feet. And it's a scary moment for advertisers. They have to hope the imagery and messaging they've sent you has not only settled in your mind, but also in your heart. That loyalty will kick in at the moment of truth. And when you look at the amount of influence that has exerted your way in a store, it's astounding. Everything from the direction you walk, to where you have to go to find certain products, to shelf position, to skids placed in your path hoping to disrupt your shopping mission to those tempting little treats at the checkout.

Then there's the tug-of-war between stores and brands, each with their own agenda. And then there's you, standing there with your shopping cart, deciding what to reach for on the shelf while the entire marketing industry holds its collective breath. And that's why the last three feet are so critical. So, the next time you reach for that can of beans

or that tube of lipstick or those handy cough drops at the cash, remember, you're not just in a store, you're in a battleground. When you're under the influence. I'm Terry O'Reilly. This episode was recorded in the Terrastream Airstream Mobile Recording Studio. Producer, Debbie O'Reilly.

Sound Engineer, Jeff Devine. Under the influence theme composed by Ari Posner and Ian Lefevre. Tunes provided by APM Music. Follow me on social at Terry O'Influence. And hey, if you liked this episode, you might also like our sister podcast titled We Regret to Inform You, the rejection podcast. It tells inspiring stories of people who overcome massive career rejection. And we analyze how they overcame those obstacles and succeeded.

And wait till you hear the story of Haley Wickenheiser. Truly inspiring. You'll find it wherever you listen to podcasts. You can also find our podcasts on the new Apostrophe YouTube channel. And if you think there are too many ads in a show about advertising, good news, you're less than three feet away from listening without ads, as you can now listen to our podcasts ad-free on Amazon Music. See you next week.

Fun fact! The first product ever to be scanned at a grocery store checkout counter was a package of Wrigley's Chewing Gum. Way back in 1974. Wow, time flies.