A well-known product without shopping barriers can sell very poorly if the market leader has even a slight advantage on the shelf

Brands with similar recognisability among the population and similarly positive opinions can differ significantly when it comes to sales, because there is no room for two leaders. In many categories there is only one leading brand, and the runner up is chosen much less frequently.

CONSEQUENCES FOR BUSINESS

Low-engagement categories, where products are chosen for the basket on the first choice principle, are especially prone to situations in which the leading product receives disproportionately large share in comparison to subsequent alternatives. Low engagement in this case means convenience, lack of motivation to change or try out alternatives. An absolute dominance on the shelf equals a victory and its lack condemns the brand to much lower sales levels.

CASE STUDY

A soft drink manufacturer decided to conduct an analysis of shopping barriers connected to the choice of their products. It revealed that the manufacturer’s brand is characterised by almost 100% of brand recognisability and its positive image (expressed in analytical indicators allowing to determine the % of positive opinions) is only slightly weaker than the dominant brand of the market. Nevertheless, the dominant brand has over 40% of the value share in the market, while the manufacturer’s brand has under 5%. It turned out that the only real shopping barrier for the purchase of the manufacturer’s brand was the dominant presence of the leader on the shelf. It has been empirically proven: a reduction of a broad display of the leader’s brand and broadening of the manufacturer’s planogram resulted in a significant change in the sales flow between brands.

BUSINESS RESULTS

Weakening of the leader’s position on the shelf and ending their dominance
can bring considerable benefits for the runner-up brand, increasing sales value several times.

TIPS BEFORE APPLICATION:

  • Ask yourself: What are the barriers and motivations for purchasing products in a particular category?
  • Ask yourself: Is the category a high- or low-engagement one?
  • Ask yourself: Is the market dominated by the consumer choice model which would influence the distribution of shopping proportionally to the products’ share in the shelf, or will it rather be a decision-making model connected with the choice of the product dominating on the shelf?