QBD

Out-of-stock on the Rise: A Cause for Concern

Out-of-stock, or the unavailability of a product at a retail store which leads to empty shelves, have been a persistent problem in the grocery industry for many years. However, the COVID-19 pandemic has led to a significant increase in out-of-stock, as supply chains have been disrupted and demand for certain products has surged

A 2022 study by Lusk et al. found that out-of-stock rates increased by approximately 130% after the COVID-19 pandemic. The study also found that the highest out-of-stock rates were in categories such as meat and poultry products, some convenience and frozen foods, baby formula, and carbonated beverages.

The increase in out-of-stock has had several negative consequences for grocery retailers, as highlighted by a study by Cachon et al. (2004), titled “Stock-Outs Cause Walkouts.” This study found that out-of-stock can lead to a loss of sales, reduced customer satisfaction, and increased customer churn. The study also found that customers are more likely to switch to a different store if they experience a out-of-stock.

Repeated out-of-stock can erode customer trust and damage a store’s reputation. Narasimhan and Dulac (2000) conducted a study to investigate the impact of out-of-stock on consumer satisfaction in more detail. The researchers found that both the frequency and severity of stock-outs had a negative impact on consumer satisfaction. Consumers who experienced more frequent or longer out-of-stock were less satisfied with the store, less likely to return to the store in the future, and more likely to perceive the store as unreliable.

The negative impact of out-of-stock on consumers is evident. They can cause inconvenience and frustration, as customers may have to waste time and money searching for products at other stores. This can lead to several negative consequences, including:

• Reduced customer satisfaction: Customers who experience out-of-stock are less likely to be satisfied with their shopping experience. This can lead to negative word-of-mouth and a decline in customer loyalty.
• Lost sales: When customers cannot find the products they are looking for, they may leave the store without purchasing anything. This can lead to lost sales for the retailer.
• Increased customer churn: Customers who are unhappy with their shopping experience are more likely to switch to a different store. This can lead to increased customer churn for the retailer.

There may be many reasons why store shelves are empty, but the main concern should not be lost revenue but rather dissatisfied customers. 

References

Cachon, G. P., Randall, T. M., & Schmidt, L. M. (2004). Stock-outs cause walkouts. The Journal of Marketing, 68(2), 26-41.
Lusk, J. L., Fox, J. A., & Shogren, J. F. (2022). Grocery store stock-outs, consumer demand, and prices during the COVID-19 pandemic in 2020. Applied Economics, 54(10), 1446-1455.
Narasimhan, R., & Dulac, H. (2000). The impact of stock-outs on consumer satisfaction and loyalty. Journal of Retailing, 76(1),

The benefits of using pallet wraps: From improved visibility to increased sales

Brands: Invest in in-store advertising with the help of Pallet Wrap

In this article, we can show you why pallet wraps are an important tool for brand presentation. We can explain how it helps to make the brand more attractive and tempting to the customer, and show how it positively affects customer behaviour. We can also describe the different materials available, as well as give examples of stores that have used pallet wraps in an effective way.

As a brand, it is important to do everything possible to be seen in the best way in the stores where your products are sold. One of the easiest and most effective ways to do this is by using pallet wraps. This simple, yet versatile solution gives you the opportunity to expose your brand and products in a visible and impactful way in the store.

What is Pallet Wrap and how is it made

Pallet wrap is a collection of terms for various products used to wrap pallets or gondolas around the store, for signage, branding, or promotional materials. They can consist of mini-corrugated board, single corrugated board on a roll, or rigid paper, also called a streamer. The paper material is available in several grades, including eco-friendly paper with water-based inks in flexographic printing, as well as more sustainable options such as PE or PP materials, depending on the specific needs of your brand and your store.

Easy and effective exposure

The best thing about pallet wrapping is that it is easy to set up and stands firmly by itself. It gives you the opportunity to expose your brand in an attractive and effective way along shelves, counters, around pallets and gondolas in the store. This can lead to an increased visibility to your store, as your products will be more visible to customers.

Increased visibility and impact on consumer behaviour

But the benefits of pallet wraps extend far beyond just visibility. By using pallet wraps in your store, you can also influence customer behaviour and increase sales of your products. Pallet wraps make it easier for customers to find and identify your products, and can also make shopping more fun and engaging for them. In addition, it gives you the opportunity to perform simple, but effective marketing directly in the store, by showcasing offers or promotions on pallet wraps.

So, if you’re a brand looking to increase your visibility and sales in stores, you should definitely think about using pallet wraps. This solution is inexpensive, easy to implement, and gives you the opportunity to create a more attractive and engaging shopping experience for your customers. With pallet wraps, you can showcase your brand in the best way and increase sales by making your products more visible and accessible.

Effective in-store advertising

Also, remember to be creative when using pallet wraps. You can use colours and patterns that match your brand image and ensure that your products become a central part of your store’s layout. By using pallet wraps as part of your store design, you can also create a more personalized and unique shopping experience for the customer.

So what are you waiting for? If you want to take your brand’s presence in stores to the next level, pallet wrapping is the perfect tool. It gives you the opportunity to showcase your products in the best way and increase sales while creating a more attractive shopping experience for your customers. So start using pallet wraps today and see the difference it makes to your brand and sales.

FMCG: Unique CPM comparison between online and in-store advertising

Do you wonder how your in-store advertising performs compared to your online advertising?

In this article, we go through the result of in-store marketing by measuring CPM (cost per thousand impressions), a comparable metric that we will use to show the performance of in-store advertising by comparing it to online advertising. In the process, we will also review CPM for the most popular digital advertising platforms.

The strength of digital advertising is in it’s trackability and measurability, which makes it data-driven. In the same sense, we believe that data should drive decision-making of advertising in offline channels as well. With this article, we hope to give FMCG companies a unique perspective on costs and results of advertising in physical stores. Then put that data in the context of digital marketing by comparing these completely different mediums and channels, physical stores vs online advertising, with a common comparable metric, CPM.

What is CPM?

Cost per thousand impressions, or “CPM,” refers to the cost of displaying an advertisement one thousand times (known as “impressions”). Also known as cost-per-mille, CPM is the most common pricing model in online advertising. If you see an ad placement advertised as $1 CPM, this means you’ll pay $1 every time your ad is seen 1,000 times.
The typical formula is: CPM = Advertising cost / 1000 Impressions.

Companies see the best results from CPM strategies when they’re used in a wider marketing campaign that is focused on raising awareness of their product and/or brand recognition.

CPM for online advertising

We reviewed the CPM for the most popular online advertising platforms from “AdStage’s Paid Media Benchmark Report 2020” [1]. These are the median CPM from the Q1 2020 report sorted by price

The cost varies between $1.53 to 59.82 with an average of $13.19. These are general numbers not considering all the different factors, such as campaign goal, target group and segments.

Also, a reason for the major price difference can depend on e.g. the value of the audience. The audience value is heavily affected by how close the consumer is to making a decision or taking an action in that medium and channel.

For example, the audience in Google Ads Search (inbound/pull) is in search of a product/brand with an existing interest which makes it more valuable compared to Instagram Feed (outbound/push) where the goal ordinarily is to inspire and create interest.

Nevertheless, brands in the FMCG category usually strive to have exposure and reach wherever the target audience is. Mixing channels and mediums covering as many touch points as possible in the consumer decision journey.

CPM for in-store advertising

When consumers are in a physical store, they are obviously there to shop. Consumer Packaged Goods (CPG), or Fast-moving consumer goods (FMCG), is a unique category. Purchases can be frequent and habitual. The research phase for potential buyers tends to be short to non-existent. Consumers buy what they usually buy or make their purchasing decisions in-store.

Which makes the store, inevitably, the last touch point in the consumer decision journey. Thuse also making it the most important and valuable advertising channel for the CPG advertisers

Pallet-wrap

One of the most effective and simple ways of advertising in-store is with pallet-wrap. By breaking down the numbers for the pallet wrap we hope to illustrate the often overlooked strengths of this medium.

Median cost of pallet wrap for 1 physical store [2]
$15

The average lifetime of a pallet-wrap [3]
1 månad

The average number of visitors in a store (hypermarket) under 1 month [4]
200 000 besökare

Detta ger en CPM kostnad på $0,075. 

Concluding that the median CPM for in-store display (pallet wrap), $0.075, is a fraction of the cost compared to online-advertising, without taking into account the importance of the channel. Knowing with certainty that the audience is there to shop, oftenly deciding which product and brand to buy on that occasion. On average, In-store advertising costs 160 times less than digital advertising

Source:
[1] https://thinkshiftinc.com/blog/digital-advertising-benchmarks-all-agrimarketers-should-know-updated-for-2022
See also:
https://www.statista.com/statistics/873631/social-media-advertising-cpm/
https://revealbot.com/facebook-advertising-costs

[2] Based on median meter price calculated from the 8 965 425 meter miniwells (pallet wrap) sold by Eurowell in the European market from 2020-01-01 to 2021-12-31.

[3] Studies based on the sale of 99 177 232 meter Miniwell Pallet Wrap produced by Eurowell from the year 1999 to 2021 showed the average lifetime of a pallet-wrap in store with moderate use to be between 3-8 weeks.

[4] Based on public data from visitor counters at hypermarkets in Sweden. Because of covid requirements stores have installed public counters showing the number of visitors in real time. We tracked data from 12 different stores across Sweden postcovid. The number of visitors varies between 200 000 – 300 000, we choose the lower point to reserve ourselves against margins of error.