Release Date: November 6, 2009
BUFFALO, N.Y. -- Supermarkets could increase their sales of related items, such as chips and soft drinks, by moving the items closer to each other in their stores, according to recent research by Ram Bezawada, assistant professor of marketing in the School of Management.
“Retailers can benefit substantially by having better placement of items in their aisles,” Bezawada says. In fact, his research determined that aisle placements can have as much an influence on sales across categories as other marketing mix variables like price or how an item is displayed.
The research, published in the Journal of Marketing, attempted to determine the optimal placement of cross-category items to increase sales. The study was coauthored by S. Balachander, associate professor of management at Purdue University, P.K. Kannan, Harvey Sanders Associate Professor of Marketing at the University of Maryland and Venkatesh Shankar, professor of marketing and Coleman Chair in Marketing at Texas A&M University.
Using the cross-category items of chips and soda, the researchers found that stores placing the items facing each other in the same aisle increased weekly sales of those items by more than 9 percent. In contrast, moving the chips and soda one aisle away from each other resulted in a decrease in sales of nearly 1.5 percent.
Both retailers and consumers can benefit from better cross-category placements in stores, according to Bezawada. “The retailers benefit because their overall sales increase, and consumers benefit by having an easier shopping experience,” he says. In addition, manufacturers who market items in multiple categories (such as Pepsi Co., which produces both soft drinks and chips) could also see their sales rise.
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