Endcaps in the Supermarket
Endcaps are promotional locations in supermarkets. 86% of products on endcaps are on a promotion of some type: 70% on a price promotion and 16% on an everyday-low-price promotion (Caruso 2016). Several studies have documented the positive increase in sales by placing products outside the aisle on endcap displays. Studies have claimed that endcaps are able to increase sales levels from just 24% to an overwhelming 1,197% (Table 1).
Table 1: Endcap Sales Estimates
Several factors account for the great disparity in sales uplifts: the depth of price discounts, the product categories being investigated, pack sizes, accompanying advertising support, and the fact that not all endcaps have the same foot-traffic and visual reach. Little is known about the effect of these factors. We examined foot-traffic and visual reach while holding other factors constant.
Endcap Traffic and Visual Reach
We recorded the field of vision and shopper paths of 169 shoppers across five supermarkets in the United States, Australia and New Zealand. Shoppers were asked to wear eye-tracking glasses while shopping. By replaying the eye tracking videos, we documented:
• when shoppers walked into a category looking for products,
• when shoppers walked past an endcap
• and when shoppers looked at an endcap
We used two key metrics to establish which endcaps have the most traffic and visual reach:
- Traffic measures the number of shoppers who walk past an endcap, within one metre, as a ratio of the total number of shoppers who enter the store;
- Visual reach measures the number of shoppers who walk past an endcap, within one metre and look at the endcap, as a ratio of the total number of shoppers who enter the store.
Endcaps at the back of the store have on average 88% foot-traffic, which is 24% more foot-traffic than those at the front (64%). In addition, endcaps at the back of the store have an average of 54% visual reach, which is twice the amount for front endcaps (24%).
A heat map showing visual reach by location in one of the five stores where data was collected can be seen in Figure 1. This pattern is consistent across all five stores.
Figure 1: Endcap Visual Reach (n=25)
Our results are not surprising given the path shoppers take in store is either U-shaped (Figure 2) or follows the racetrack around the outside of the store (Figure 3). According to Larsen et al. (2005) and Sorensen (2010) shoppers navigate their path through supermarkets in a predictable way; mostly going around the perimeter of the store only making excursions into the aisles as required. These paths depend on the shopper’s needs and the time available.
These two paths suggest the back of the store should have more foot-traffic and visual reach than the front.
We also compared the visual reach of endcaps against the visual reach of the category found in the aisle. This helped determine the extra visual reach endcaps could give to brands in store. On average, in-aisle category visual reach is approximately 3%, ranging from 0.1% to 39%. This difference is due to category, i.e. categories with a higher household penetration such as biscuits have higher visual reach. Most shoppers are not going to enter an aisle (and look at a category) unless they need to purchase something from it. However, endcaps do not have this same issue. No active choice has to be made to walk past (and look at) an endcap as they are placed on the perimeter of the store. As a result, endcaps have a vastly higher average visual reach of 39%, ranging from 3% to as high as 100%, depending on the location of the endcap in the store. As a result, endcaps increase both mental and physical availability, reaching shoppers who were not planning on buying that category (that day), something particularly valuable for new brands or brands on a promotion.
We also divided the shopping trip into 10 percentiles, to determine when in the trip shoppers were looking at endcaps. We found endcap visual reach was constantly higher at the back of the store in comparison to the front. The only exception was in the last 10 percentile of the shopping trip. This is most likely because shoppers are exiting the store at this time.
ENDCAPS SALES UPLIFT
BUT, do differing levels of foot traffic and visual reach between front and back aisles actually result in differences in sales? Unsurprisingly, the answer is yes. But there are more learnings to be gained about where sales come from (the endcap itself vs main aisle) depending on endcap location (front or back).
We conducted an in-store experiment over 16 weeks for three brands in high penetration categories (chips, soft drinks, biscuits) in a large Australian supermarket (~35,000 SKUs) to determine how sales might differ by location. We systematically manipulated the product category and its endcap location. The chosen product was displayed on the same or different aisle endcap in a weekly rotation schedule. The product was rotated between front and back endcaps, with a weekly break period. This allowed us to calculate the sales level for the front vs. back endcaps.
Store staff recorded the daily stocktake figures, including any refills. We then calculated the differences from the total daily sales, which was the sales figure for the endcap shelf (i.e. endcap-only sales). We controlled for discount depth (33% on average and typical for these categories). The promotion schedule and discount depth were done according to the supplier’s natural schedule.
The sales level, in quantity sold, for the potato chip category can be seen in Figure 4.
Figure 4: Sales level, in quantity sold, for potato chips
All three product categories showed the same pattern:
- when products were displayed on a back endcap and in-aisle, there was higher overall sales and higher in-aisle sales;
- when products were displayed on a front endcap and in-aisle, there was comparatively higher endcap-only sales.
On average, we found endcaps created a sales uplift of 381% (note this is from a small base of sales). We discovered that back endcaps generated higher total brand sales compared to front endcaps (416% cf 346%).
From the daily stocktake figure, we established what was being sold from the endcaps vs in the aisle. The sales composition between in the aisle vs on endcap in Table 2 shows most sales still come from within the aisle in the supermarket. Front endcaps generated higher endcap-only sales than back endcaps (34% cf 24%).
Table 2: Sales Composition from Endcaps
This finding may be partly due to a few shoppers not believing the best category special will be on an endcap, as they know manufacturers pay for this space (Moreau et al. 2002) so they still enter the category aisles to make comparisons. We also found endcaps at the front of the store are most likely to visually reach shoppers at the end of their shopping trip. This could mean shoppers are either picking up an item on their way out of the store as an impulse purchase or not willing to enter the aisle to make comparisons (as they are more focused on leaving or entering the store).
SUMMARY
Visual reach in a crowded environment such as a supermarket is critical because not all in-store ‘real estate’ is equal. If a product does not fall into the shoppers’ field of vision in the store it is impossible to create a sale or remind shoppers you are on sale.
In this report we have shown strong evidence for endcaps increasing visibility and sales. Endcap locations have a different number of shoppers walking past and looking at them. Due to the differences in sales by location, understanding where to visually reach more shoppers in store is beneficial to both retailers and brand managers.
On average, a product placed on an endcap visually reaches 36% more shoppers compared to when it is placed only in the aisle. This additional visual reach differs by the location of the endcap within the store. Endcaps at the back of the supermarket receive 25% more foot traffic and twice the visual reach than those at the front, because shoppers naturally follow the perimeter of the store (the ‘racetrack’) along the back corridor, where back endcaps fall within their line of sight. Front endcaps have less visual reach, as most shoppers face the checkouts (not endcaps) when at the front of the store, meaning the front endcaps are not within their field of vision.
Interestingly, while back endcaps drive greater overall sales (due to higher foot traffic and visual reach), fewer of these sales are made from consumers picking up product from the endcap. It seems that back endcaps act as advertising billboards that either drive shoppers into the aisles or heighten the brand’s mental availability among shoppers who enter the aisle.
Further testing regarding the different factors affecting sales on endcaps is required, but for now we conclude that endcaps at the back of the store outperform those at the front.
Research into the fundamentals of shopper behaviour is continuing at the Ehrenberg-Bass Institute. To suggest new research sites, contribute data or discuss the findings, contact retail@marketingscience.info
