Controlled Store Tests

As a methodology, controlled store tests provide an excellent technique to understand the consumer response to in-store marketing variables, such as the introduction of new products/line extensions, the reduction or increase in selling price, changes in shelf facings and/or positioning, the impact of in-store displays or merchandising (signage, shelf danglers, coupon dispensers, aisle violators), etc. The major advantage of controlled store tests over other testing methods is that they take place in a “real life” environment – real markets, real stores, real products and real consumers – but one that is tightly proscribed and offers minimal risks to the marketer.

Measuring ROI

We at GfK Audits & Surveys understand that the key objective in most controlled store tests is to identify that option, from among two or more alternatives, which results in the maximum bottom-line ROI for your brand and your company. Our team of research professionals will design and execute the study that will also maximize another ROI, the return on your research investment. Only GfK Audits & Surveys has the depth of experience and the breadth of market, outlet type and chain coverage to ensure that your test will deliver the results you require. We will:

• Identify the markets and types of stores that are most appropriate to test in
• Recommend the design that best fits the number and types of variables you wish to test, including sample size options that will meet the sensitivity required to reliably measure results as well as the cost and timing dictated by your marketing plan
• Collect the necessary POS data from each participating retailer or, if necessary in stores that are not equipped with scanners, conduct physical audits to develop consumer sales data
• Arrange to sell in your product or program to the retailer(s)
• Set up and maintain the test conditions
• Process the data, analyze the findings and present them in coherent, insightful formats for decision making
• Complete your test on time and within budget

Matched Panel Designs

• A frequently used methodology for controlled store tests is the Matched Panel design, which offers efficiency and effectiveness on both a measurement and cost basis.
• In brief, this technique involves the set up of two (or more) panels of stores which are matched as closely as possible on pre-set criteria during a non-test “base” period. The test variable ( a line extension, a new package design, a display, a shelf reset, etc.) is then introduced into one of these panels and results are compared to the other non-test panel (multiple matched test panels can be employed if two or more variables are to be tested).

Reading Results

• A major strength of this design is in the reliability and clarity of reading results.
• Sales (and share) performance can be compared directly in two ways:

TEST PANEL		CONTROL PANEL
BASE PERIOD		TEST PERIOD

• A straightforward calculation of indices provides a picture of the results; a statistical analysis determines the validity vs. the pre-determined objective.

• All sample stores are measured through the base period to determine normal sales rates and shares. During the matching process two panels are selected to replicate each other as closely as possible. One (test panel) receives the test variable(s) while the other (control panel) does not.
• The two panels are then monitored to ensure that the test variable is maintained and represents the only difference in selling conditions between the two panels. Sales are measured during this test period to assess the performance of the test variable.
• Following the test period, the resulting sales data are analyzed for actual as well as covariant differences. Other statistical techniques, such as regression modeling, may also be employed, where necessary, when unanticipated competitive activity or other uncontrollable conditions occurred during the testing phase. Lastly, a post-test period may be measured to determine if there is any longer term effect as well as to evaluate if, and to what degree, the test conditions cannibalized any potential future sales.

Test Period vs. Base Period
Total Test Brand – Volume Per Week & Share of Category

Note: All measures of difference are significant at the 95% confidence level
( ) = Index = Test Period/Base Period (Base = 100)

Reliability & Accuracy

GfK Audits & Surveys has worked with almost every major retail chain organization in the U.S. across the complete spectrum of trade channels. We can assist you in acquiring the retailer’s cooperation to conduct the test and collect the POS data necessary to complete the initial matching process as well as the test and post-test reporting.

• We are able to accommodate virtually any data file format in which the retailer will provide their data.
• Our systematic data entry and quality control procedures, along with our regular communications with the retailer, ensure that all data are verified, checked and processed to the highest industry standards.
• In the rare instances where scanner data may not be available, our local-market audit staff will conduct manual audits.

Additional In-Store Services

Our Field Management team can arrange for trained, local-market auditors and interviewers to execute any needed in-store monitoring or interviewing:

• Visit stores during the test and post-test periods to monitor to report on the presence of the test conditions, out-of-stocks, shelf inventory, competitive activity/price reductions, etc.
  
  
• Digitally capture in-store conditions.
  
  
• Conduct in-store surveys of shoppers after they have experienced the test conditions, getting your customers’ immediate reactions and tying it to shopping behavior at the point-of-sale.
  
  
• Interview store personnel to gauge their opinions on the impact and maintenance of the test conditions to uncover any latent issues before they become problematic to the program.

Reporting/ Analysis

All data are collected at the individual UPC/SKU level which can then also be aggregated to provide data by types, formulas, sizes, brands, etc. up to and including the overall product category. Typically, reported measurements include the following by Base vs. Test vs. Post-Test periods:

• Retail Sales - units, dollars, equivalent units
• Brand Shares - units, dollars, equivalent units
• Relative Sales Changes - Test Panel vs. Control Panel
• Relative Gain (or Loss) in Test Panel vs. Control Panel
• Average Sales per Store
• Distribution and Out-of-Stock
• Retail Pricing Analysis
• Point-of-Sale Activity

Reports are graphically presented with full analysis to make them easily usable.

Benefits of GfK Audits & Surveys

No other research partner can offer you a greater combination of experience, talent and capability. GfK Audits & Surveys provides

• Proficiency in test design and matching store panels
• Ability to gain chain cooperation
• Facility to collect and process data
• Vast network of trained field personnel
• Superior analytic abilities to deliver insights, not just reporting
• Consummate reputation for superior quality research
• Affordability
• Assistance in preparing sales materials and presentations to both retailers and customers

LocationScan ™

LocationScan™ is a powerful and unique tool for marketers. It provides the ability to measure sales and shares from every independent location where a product/category is located within a retail store.

It can be used to assess a product’s performance across multiple locations where it is currently stocked or it can measure the potential incremental sales (and ROI) to be gained by adding one or more new locations, be they temporary or permanent.

GfK Audits & Surveys pioneered this technique over 10 years ago and we have successfully conducted numerous tests for a variety of clients (see some examples below).

How It Works

LocationScan™ is a sophisticated form of controlled store testing. As such, it requires the project management and field force capabilities that only a research company like GfK Audits & Surveys can provide. However, the payoff is the type of highly valuable and actionable information about your sales performance that is otherwise unavailable.

Our experience assures you of consistency and quality in study design and execution:

• Designing the study and choosing the sample stores
• Arranging for the retail cooperation to a) control the stocking of your product and its competitors in each location within the store, b) set up separate UPC codes for each item for each of these locations, c) enter and verify each of these codes within the store’s POS system and d) receive and process the store’s electronic sales data
• Maintain the stocking conditions through regular store visits throughout the test period – assuring all products are coded by their location and not permitting out-of-stocks
• Preparing and analyzing results so that you and your organization can get maximum value from the findings

LocationScan ™ Case Studies

Case Study #1: Magazines -- Add “Lane Blocker Display” as secondary location.

Objective: To determine the incremental sales when a “Lane Blocker Display” is used as a secondary location in supermarkets.

Results: Sales increased over 20% with supplementary location. The increased sales more than paid for the cost of the new location.

Case Study #2: Steak Sauce and Marinade – Meat Case as secondary location.

Objective: Determine the ROI for placing new extension racks featuring Steak Sauce and Marinade for the “barbeque season” in the meat case.

Results: Overwhelming increase in overall sales generated from the new location, in some cases accounting for more sales than the traditional shelf location. ROI was over 200%. The additional location became permanent in many chains and, in most of these, has become year-round not just seasonal.

Case Study #3: Household Batteries – Quantify checkout importance.

Objective: To determine the percent of sales that is generated from the checkout location.

Results: The manufacturer was able to negotiate a lower cost with the retailer to continue their checkout “placement” cost -- knowing what volume and percent of overall store sales occurred at the checkouts.

Case Study #4: Grated Cheese – Added to Dry Pasta Section

Objective: To quantify what increase in sales would occur if a shelf extender with Grated Cheese were to be placed in the Dry Pasta Section.

Results: The ROI for the display was significantly higher than any estimates anticipated. This new location is now a permanent secondary location in many chains.

Reporting Examples

GfK Advantages

• Experience – GfK Audits & Surveys has conducted thousands of in-store tests since its founding in 1953. All of our Project Team Managers have at least 20 years of market research background and at least 10 years of in-store testing experience.
• Full Service Capability – all support functions are “in-house”– sampling, retailer relations, print shop, graphics, data processing, analytics, et al.
• Field Resources – we are the largest user of local-market auditors/interviewers in the U.S. Our size and long-term relationships allow us priority in choosing both the quality and quantity of field personnel we employ.
• Communications – your Account Manager and full project team understand the critical need for continuous, open communications with you, the client, as well as our field organization.
• Innovation – over the years, GfK Audits & Surveys has pioneered a number of testing techniques, LocationScan™ being only one of them. We have also helped our clients find solutions to unique testing problems.
• Retailer Cooperation – our cooperation capabilities are second-to-none. We have worked in almost every major retail trade channel and with every major (and minor) retailer.
• Deliverables – Complete tabular reports and graphic highlights are always provided with an analytical presentation of complete results.
• Costs – competitive but comprehensive. Our proposal costs are all-inclusive. We do not “nickel-and-dime” for unforeseen extras, additional travel, another interim report, etc.

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