CPGmatters: Philips Breaks Wares Out of the Box to Communicate with ‘Product-Demos’

By Dale Buss

Through a special arrangement,
presented here for discussion is an excerpt of a current article from the
monthly e-zine, CPGmatters.

One of the reigning assumptions in retailing
these days is that consumers increasingly are driven by price alone —
that all other discerning features of products, packaging and merchandise
fall into distant places behind the importance of discounting and availability
of the stuff on the shelves.

But even amid today’s global economic downturn, Netherlands-based
Philips is offering dramatic proof that shoppers still crave
relevant information, delivered to them in the store, and that if it’s
done intelligently, “product-demo”
communications on the shelves can drive purchase decisions to the brand.

Based on powerful shopper insights such as
these, the Domestic Appliances and Personal Care unit (DAP) of Netherlands-based
Philips is intensifying a strategy that has boosted sales significantly
during the four years since it was launched.

Some of “the learnings were so well-received by our retail partners, we
have, in each case, moved on (at the retailer’s request) to developing
in-store executions including revised shelves and upgraded in-store communications,” John
Carter, Philips’ director of strategic consumer intelligence for the DAP
unit, told CPGmatters.

“In several cases,”
Mr. Carter said, “we are now in the initial rollout phase of the new
shelf executions and templates, which will be honed in their execution and
ability to consistently deliver against the impact learnings from
[recent] studies.”

Consider a new demonstration with one retailer.

“In [this] particular account, across
several countries, the retailer was so impressed by the strength of the
results that they immediately reversed their recent decision to overstock
shelves and return to demo shelves – with product outside of the
package,” Mr. Carter said.

Among Philips’ proven successes already in
this arena, for example, has been its practice of creating separate and
distinct in-store presentations for Norelco shavers and incorporating aligned
communications for each target. In part, this has involved simplifying
displays for Christmas-holiday gift givers, identifying three shaver options: “Good,” “Better” and “Best”
models.

Of course, before Philips and its retailer-partners
can get to the point of such executions, they first are learning what “drivers” are
working in shoppers’ minds and leading them to their in-store purchase – or
no-purchase – decisions. Among the product lines and markets to which
Philips DAP is applying its learnings about drivers are shavers and accessories in two
countries, Philips Avent baby-feeding systems
in the United States and two other countries, and Philips kitchen appliances
in several countries.

In any event, Mr. Carter underscored why
Philips considers it so important to dig deep for new and true insights
into shopper behavior. “Shoppers are rarely random,” he said. “They
exhibit pattern behavior that commonly makes simple sense
– once you understand it.”

Discussion Questions: What are the pros and
cons of using “product-demo” communications to drive purchasing
decisions at retail? How would you rate “product demos” versus
other ways of reaching consumers in-store at the shelf level?

• Philips Breaks Wares Out of the Box To Communicate with
  ‘Product-Demos – CPGmatters