In this article, I read a quote I don’t entirely agree with.

“Sampling mitigates risks for brands,” says VP and gm Brian Pear. “It’s less risky for mom because she’s able to sample it for free.”

Having reviewed and analyzed the sales data for 100+ retail brands over the past four years I have to say that this simply is not true for all brands.  There is a lot that needs to be in place for an in-store sampling experience to directly create incremental sales.

Check Your In-Store Inventory

It may sound basic, but the first thing you need to assure is that you have the inventory to support any up-take in off-the-shelf sales.  It’s not uncommon for an in-store demo/ sampling program to stock the event set with inventory from the shelf, leaving the shelf itself bare.

More than once I’ve looked at sales volume data, subtracted what the demo staff bought, and found nothing left.  If the brand and store buyer are not organized before hand, there won’t be extra inventory and the whole thing will be a flop.

Don’t Ignore Product Use Cycles

Next, the consumer use cycle needs to be considered.  Household products tend to have a longer purchase cycle than food items.  A consumer is less likely to buy paper towels after a demo than frozen peas.  This doesn’t mean that there won’t be an up-tick, it just tends to be recognized after the demo has been completed.  Often on the next regular stocking-up trip for the consumer.

The tendency for a brand is to analyze the data immediately after a demo.  Sometimes you have to wait 30 or even 45 days to get a true measure of the impact.

Use cycle is also impacted by the volume of units typically sold and demonstrated.  If the demo is for a product that typically contains 30 items and average use is one item per day, sales may not increase for 15 to 30 days.

Watch For Product Hoarding

Finally, even if you do find an up-tick in sales, it’s not always a good thing.  There are three possible sources of incremental sales.  You either attracted new consumers to the category, won over customers from a competitor, or your current customers are hoarding.  The first two are what you want.  Bringing new customers to the category or winning over a competitor’s customers is great.  Hoarding can be a problem, but not always.

Hoarding is when a customer buys more of a product on sale yet avoids buying down the road because they’ve already “stocked-up”.  This is obviously more common for products that keep well (e.g., cleaners, dry food items, etc.) and less common for products that are bulky (e.g., diapers, paper products, etc.).

Juice is a great example of a product that is subject to increased use.  While someone isn’t likely to increase their use of butter (unless educated about new uses), many drink products like juice, milk, and even alcohol can look in the data as hoarding but really may represent an increase in short-term usage.  The consumer will return to normal (or slightly increased) consumption patterns once the discounted or sampled supply has been consumed.

So, yes.  Sampling and in-store demonstrations can be a great marketing tool for CPG brands.  However, if you don’t have the right analysis strategy in place you will never fully understand if what you did worked and why.

When compared to December (the previous month) we’d expect to see January retail sales down around 16.2%. Not as bad as you’d expect but driven by due giftcard spending. (It usually gets steadily worse and bottoms out in May then takes a U-turn in June with “Dads and Grads”).

The latest from MarketingDaily (http://bit.ly/5hst2W) reports on JD Power’s comments on January sales in the Auto industry. Things look down. We’ll see how much this is a bellwether for other sales sectors.