More actionable insights for manufacturers and their retail partners will now be posted at APT’s Insight Aisle. Please visit us at www.theinsightaisle.com.

Manufacturers often rely on innovative shelving and displays to promote new products and set themselves apart from the competition. While POS displays may be a great way to introduce or feature a particular product, there are often unintended consequences (both positive and negative) on other products in the portfolio. By learning about how non-promoted products are affected, top manufacturers are able to create innovative displays that beat the competition.

In most cases, by featuring a product on an in-store display, the manufacturer and retailer are going to drive sales of that product. However, often overlooked in judging the effectiveness of a display are the two secondary impacts:

• Consumers are drawn toward nearby products (halo effect) or
• Consumers are less likely to purchase similar products (cannibalization)

Acknowledging these impacts – and measuring them – is crucial to successful merchandising. (more…)

Data from the 2012 Shopper Engagement Study showed that three out of four shoppers wait until they get to the store to make a purchase decision. Given the investments in product-specific advertisements outside of the store by consumer goods marketers, this may be a surprising statistic to some. However, for your pricing and merchandising teams, this means a big group of persuadable consumers. From POP displays, to the color and messaging of packaging, to relative pricing of different same-brand SKUs on a shelf, there are countless avenues to try to convince consumers to choose your product over the competitor’s.

But as numerous studies (and probably personal experience) has demonstrated, consumer behavior is not only unpredictable, decisions are often illogical. One familiar example of the irrational consumer is the idea that having a lot of choices actually results in less sales because the consumer gets overwhelmed (this is one of the many reasons for Trader Joes enormous success). Daniel Ariely’s book, Predictably Irrational is, as the title suggests, full of examples like this. Based on these irrational truths, it is clear that the only real way to confirm or disprove your intuition is to try out your ideas in the real world before rolling out to your whole distribution channel.

In a recent interview on Bloomberg TV’s “Taking Stock with Pimm Fox,” APT CEO Anthony Bruce comments on how consumer-facing companies can measure the return on Facebook advertising dollars.

In 2007, Swedish professor Hans Rosling gave a Ted Talk about global development that changed the way many people look at data. His talks, which have now garnered millions of YouTube hits, provide a key lesson for corporate executives: decisions not supported by data can often be wrong.

Rosling starts his talk by presenting the results of a survey that he gave to top Swedish graduate students. The survey asked students to choose the country in a given pairing with the highest child mortality rate. The pairings were Sri Lanka or Turkey, Poland or South Korea, Malaysia or Russia, Pakistan or Vietnam, and Thailand or South Africa. If you are like the top Swedish students, you would have incorrectly answered Sri Lanka, South Korea, Malaysia, Vietnam, and Thailand.

It is easy to make business decisions based on intuition alone; but as the above survey exemplifies, sometimes intuition fails even the smartest and most successful people. Obviously, there were no repercussions for answering Rosling’s questionnaire incorrectly. But what if you were using this same kind of judgment to make a $5 million advertising decision or a $100 million capital expenditure investment? Rosling explains that the problem many people face is not ignorance, but preconceived ideas. (more…)

Value Added: Ballston firm APT battles tech giants Microsoft, Google and Facebook for workers — and wins

http://www.washingtonpost.com/business/economy/value-added-ballston-firm-apt-battles-tech-giants-microsoft-google-and-facebook-for-workers–and-wins/2012/04/01/gIQAo0VfpS_story.html

Daily coupon deals may not work for buyers, deals – check it out:

http://www.usatoday.com/money/industries/retail/story/2012-03-15/restaurants-using-daily-deal-sites/53553794/1

Retail and consumer companies are rife with stories about highly fastidious founders.  A colleague recounted how he witnessed the head of a major chain of hotels getting on his hands and knees to personally check if the drip pans under the refrigerators were clean.  Similarly, Sam Walton was famous for flying a prop-plane from store to store, and along the way, touching down wherever he saw a promising empty lot for a new store.

Today, leaders need to look beyond physical sites, store managers, and DCs and apply that same discipline to other aspects of their business.  The foundation for good decision-making is data.

In today’s volatile environment, managers are adjusting their business in near real-time, and most initiatives require the cooperation of multiple groups and departments.  Operating a retail business without consistent, up-to-date, integrated data is challenging and error-prone.  Here are the details to focus on: (more…)

APT VP Marek Polonski discusses how testing can help grocers enhance their loss prevention efforts in “Caught in the Act,” an article for Grocery Headquarters.

http://www.groceryheadquarters.com/2012/03/caught-in-the-act/

Follow us @APTtestandlearn (https://twitter.com/#!/APTtestandlearn).

For recruiting news, check out @Joinapt (https://twitter.com/#!/joinapt).