The sales effect of in-store product displays: The special case of total product relocation

Abstract

Purpose of the research: Special product displays are expected to increase sales of the products they contain. Opposite to the rich existing literature on the impact of product in-store displays, we investigate the case of total product relocation instead of using the display location as an additional sales spot (secondary location strategy). Design/methodology: In our setting, products are fully taken off the usual shelf and put into special displays close to the checkout area. We use data from a field experiment conducted in 214 stores of a German perfumery chain, in which eight products were moved to an in-store display. Results/findings: Compared to the control group, the treated products placed in display boxes show a statistically significant increase in sales. The precise effect differs markedly between the investigated products, ranging from 80% to 478%. Accumulated sales increased by 217.69€ per week on average due to the installation of product displays. We can conclude that complete relocation, indeed, boosts sales, but the precise magnitude seems to be driven by factors not covered in this study. Practical implications and Conclusions: Based on the product selection, the results seem transferable to both other perfumery stores as well as general supermarkets. However, given the low additional revenues, retailers must consider all the additional costs associated with the implementation of product displays such as the costs of installing and maintaining the display, the costs of removing tags and rearranging the former shelf, and any opportunity costs. If these costs do not exceed the estimated effect, then the installation could be of economic importance.