In-store sampling is a tried and tested marketing method that offers consumers an in-depth brand experience that engages them, raises their awareness of the product, and accelerates sales velocity.
When companies offer free product samples to prospective customers in a retail setting, they are able to establish a personal connection with them, minimize the risk of making a purchase, and encourage experimentation, which ultimately results in improved sales and loyal, repeat customers at a cost that is more affordable than other methods of customer acquisition.
Numerous research studies have shown that in-store demos have the potential to accelerate sales velocity by multiple folds, and yet many CPG brands experience negative returns on their in-store sampling investments. So what are the most common reasons for such a simple proposition to end wasting time and money for so many brands?
Most CPG brands spend money on in-store samplings to accelerate sales velocity of their products at a given store location. While retailers and brokers can measureably benefit from an in-store demo event, they are not financially invested in the actual results—the brands are.
Therefore, from the brand perspective, if the unit selling price of your product AND the average percent of it’s repeat sales are low, you are likely wasting your money promoting it in store. It is very unlikely that the sales boost during the demo will cover your cost of producing it, regardless of how many units are sold.
There are no specific, universal numbers that will absolutely tell you what price and repeat sales rate are too low because of multiple other parameters that influence profitability of in-store demos, but you can find a link at the bottom of this article that would help you to estimate or forecast the return on your investment.
If you do it to “nurture” your relationships with your retail partners, I would suggest less expensive and energy-consuming methods.
The product price, quality, and average percent of it’s repeat sales will not salvage an in-store sampling event scheduled in a store or at a time when there are too few shoppers to experience it.
Surprisingly, many brands and/or brokers would produce sampling events in the locations where they can engage 15-20 shoppers over 3 to 4 hours. However, some brands do it because the retailer or broker requests without considering the suitability of the location in terms of traffic and demographics.
Even a very experienced brand ambassador with a high average T2P (taste to purchase) conversion rate cannot sell enough to cover all the costs associated with the event. A very small investment in conversation with a store manager or your local demo partner can help you focus on the right stores and the right times to schedule your samplings and maximize your returns.
The experience and attitudes of brand ambassadors are extremely critical to your expected T2P conversion rates AND your relationship with the retail partners. It is very common practice to use gig workers or independent contractors to promote your products in remote locations with a minimum or no supervision or training. Such practice virtually assures a negative return on your in-store sampling investment.
A quality brand ambassador not only excels in engaging shoppers but also minimizes the impact of the event on store employees and reliably shows up for the scheduled events to eliminate a strain on the in-store order fulfillment teams.
There are many talented and experienced independent brand ambassadors, but a brand needs to find them, train them, and support them in optimizing their earnings (i.e., their time utilization).
One alternative is a partnership with reputable in-store demo companies that will provide accountability for brand ambassadors performance.
Another one is to automate coordination and management of in-store sampling that would allow a single employee to schedule and control hundreds of events across the country. Not only would that allow you to recruit and retain excellent brand ambassadors at minimal cost, but it would also help to minimize waste of no-shows and no-products cancellations.
You can use this model to estimate the likelihood of generating positive ROI with in-store sampling events.
