Challenger brands often miss out on leveraging one of their most potent assets.
At the First Moment of Truth (FMOT), the key performance indicator that takes precedence is Shelf Impact. As the age-old adage goes, “Not seen, not bought,” and there’s a clear and direct correlation between visibility and purchase.
INSEAD Associate Marketing Professor Pierre Chandon conducted an extensive study in collaboration with Wharton Professors Wes Hutchinson and Eric Bradlow in 2009. This research delved into the impact of in-store marketing on both capturing attention and driving choice. The resounding conclusion drawn was that “visual equity,” or the impact of being prominently visible within a store, where a significant majority of purchases still occur, holds more weight than brand awareness or “memory equity.” This observation holds particularly true for challenger brands and those with a lower market share.
Visibility emerges as the critical precursor to consumer choice. Surprisingly, more than 65%
of the products on store shelves typically go unnoticed by shoppers during a typical shopping trip*. Furthermore, our research indicates that the placement of your product on the shelf significantly I influences both its visibility and its likelihood of being purchased. Have you ever wondered why your brand performs substantially better in one retail banner compared to another?
We frequently observe considerable disparities in sales, often exceeding 20% for the same brand, even when the competitive sets are very similar. The primary variables at play in such cases tend to be store brands and the planogram, while the Purchase Conversion Index for the brand in question remains relatively consistent across both banners.
Shelf placement not only influences purchasing decisions but also impacts people’s perception of your brand. Our studies, along with independent research by Otterbring, Wastlund, Gustaffson, Shams (2014) and Lang, Kelley, and Moore (2016), reveal that shoppers tend to focus more on the upper part of the shelf, with a preference exceeding the lower part by an average of 20%. Additionally, research suggests that consumers associate products located at the top of the shelf with higher quality (Chandon et al), though this may not directly relate to visibility; it’s an interesting point to note.
When designing a challenger brand, you can’t underestimate the importance of standing out and breaking through the clutter. In our experience, brand owners of low-market-share brands tend to opt for designs that visually conform to the category. They often prioritize “fitting in” rather than “breaking out.” As a result, they become part of the background and are less noticed. For 85% of all brands out there, mass advertising to create consumer awareness isn’t an option. For these challenger brands, visibility on the shelf becomes absolutely critical to their success.