Ever wonder why there are so many varieties of Coke? Even the most basic grocery store can boast that it carries Coca Cola Classic, Cherry Coke, Diet Coke, Coca-Cola Zero and maybe even Vanilla Coke. Years ago, the company promised that by 2015 it would have a thousand varieties of Coke all over the world. Whether that promise comes to fruition or not, there's a very simple reason for all that product diversification over and above different people's tastes and preferences, and that is shelf space. "The main point of generating product line extensions is to win more space on the shelf. Store managers will only give so much room to any one product, no matter how briskly it is selling," says Michael Moss in Salt Sugar Fat, "Adding new flavors and colors creates new products that get their own space, and the more likely shoppers are to see a brand, the more likely they are to buy it." Which explains Coke and Pepsi with all their "lemons and limes and vanillas."
Supermarkets are precisely designed instruments of sale, and extensive research goes into planning and implementing each and every detail. Everything from lighting to signs to even the music being piped in (and when) is precisely calibrated to do one thing: make you buy more. It is pretty much a given that every supermarket entrance will welcome you with a fresh vegetables or flowers section. This, says writer Jack Hitt, in his fantastic and still relevant 1996 article for The New York Times many years ago, is so we get the illusion of entering an old-fashioned market, not the sterile stores we actually shop at. It's nice that we are presented with so many choices of exotic vegetables and fruits but most of us gravitate toward the familiar, he also says.
These familiar (often processed) foods are stocked in the middle of the store along shelves called "gondolas." When I was working out of a Starbucks recently, I heard a guy barking over the phone about redistributing the Gatorade that was not flying off the shelves. All I remember is: "I don't have my databases with me so I can't give you more info just right now". Databases? Yes, apparently so. There are many software programs that let stores plan and map every square inch of their space. A walkthrough of one of their demos is quite the revelation.
In all grocery store aisles, it makes sense that more customers look at what's placed directly in front of them in one of the giant gondolas. Unless we're looking for a specific item, how many of us really crane our necks to look at the tops of shelves? This premium space at eye-height is a precious commodity and many stores charge manufacturers for it, a fee called the slotting allowance. This fee can be paid to the retailer in the form of free goods, ads taken out in the retailer's bulletins, food tastings in the store, or a combination of these. Both the wholesaler and the retailer evaluate the movement of goods on an ongoing basis to see whether the fee (and the space devoted to the product) is yielding enough return on investment. While slotting allowances are still paid, the practice raised enough eyebrows in Congress many years ago that the Federal Trade Commission was asked to look into the matter and make sure that the playing field was fair and competitive.
Slotting allowance or not, there are companies who own entire displays and make sure these are stocked and in prime locations at stores. At your local convenience store for example, Pepsi or Coke probably owns the crates and other displays which it stocks and keeps at the front of the store. Sometimes these displays even have a particular target in mind. For example, the soda companies know that the teenagers who visit gas stations tend to buy a little gas many times during a month. When they go in to pay for the gas, a soda and a bag of chips, placed just at a reach-and-grab distance, are all it takes for a quick impulse buy. That one purchase might not be premeditated but the thought processes to make that sale sure are.
The next time you're in a supermarket, look around and wonder how the color, the music, the samples are all working to make you buy. It's a very eye-opening exercise.
This article was originally published in April 2013, and has been updated for the
February 2014 paperback release.
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