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Costco - The Perfect Sampling Case Study

Posted by Sonas on Jun 14, 2017 8:08:39 AM
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If you want to experience first-hand the dramatic consumer impact of a product sampling campaign, just step through the doors of any Costco store.

This chain has a reputation for taking every advantage of this marketing strategy.

A case study in how Costco does it and the results the brand enjoys may help other businesses appreciate a sampling campaign that is superbly executed.

Why Sampling?

Every business, retail in particular, is dependent on consumer purchases of their product or service for revenue.

Why, then, give your stuff away?

The effectiveness of sampling lies in the experience value.

A freebie is the initial draw. A satisfactory experience then results in a conversion, from interested bystander to loyal customer.

Does Sampling Really Lead To Conversion?

Nielsen studies indicate 5 factors related to brand switching: price, quality, better service, variety of choice, and improved features.

A sampling campaign is the perfect opportunity to capture the attention of the 20% of consumers willing to switch brands if they find better quality in a competitor. It might also reel in the 19% who are interested in better service, another 7% who appreciate variety, and about 8% who appreciate the improved features of the latest, greatest thing.

As to price, perhaps your product's price is not incentive enough to lead to the conversion of 47% of consumers who can be swayed by this factor.However, by placing a free sample in their hands, your chances rise that they may consider switching brands. If the experience is satisfactory, a price conscious consumer may weigh the cost/quality values and determine that your product is worth it. If your sampling campaign includes a first-time buyer discount strategy, that may be the final push to secure a price-conscious consumer conversion.

An abundance of new customer potential lies in a product sampling campaign.

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Costco Case Study

Costco's in-store sampling strategy is so legendary, it is not uncommon for a shopper to actually be a browser who has shown up for a free meal, one tidbit at a time.

Costco has learned that when sampling is done right, the shopping experience becomes fun which draws people into the store in greater numbers. The products featured in a sampling campaign, in turn, see a significant spike in sales.

Just look at these amazing numbers Costco has reported from sampling campaigns:

  • Featured beer brands saw a 71% boost in sales.
  • Featured brands and varieties of frozen pizza experienced a 600% sales increase.
  • Featured wines enjoyed a boost of more than 300% in sales.
  • Featured cosmetics of lipstick and mascara sales rose by more than 500%.
  • Featured packaged cheeses doubled in sales.

Sampling inspires shoppers for a variety of reasons.

The desire to "give back" after receiving a freebie, known as reciprocity, is common.

Becoming loyal to an otherwise unknown product after a satisfying experience occurs with shoppers who otherwise wouldn't try something new for fear of wasting their money.

Then there's the simplicity of creating a craving that didn't exist in the first place. After all, who can eat just one bite of chocolate and not want more?

Check out the data on consumer responses  to particular sampled items during a routine Costco shopping day:

Identifying A Target

A sampling campaign is more than simply gathering up bits of your brand, laying them out on a table and passing them out to the public.

Executing a successful sampling strategy begins with asking the right questions:

  • Who is your target consumer group?
  • What are the most popular brands already being purchased by this group?
  • How do these consumers prefer to shop? Brick and mortar? Online? Subscriptions?

Examining The Venue

Once you refine a target consumer group, you must consider a venue.

An in-store sampling campaign means finding the right retailer who will be supportive of your sampling campaign. So, ask yourself these questions:

  • What are the traffic capabilities of the venue?
  • Does the retailer have enough of the products used in the sampling campaign to satisfy potential consumer purchases?
  • Are there any venue features which might interfere with the success of a sampling campaign, such as a loud audio system?
  • Where is the space allocated within the store? Is it visible? Easily accessible?
  • How much space is allocated? Will there be enough room for any necessary equipment?

Brand Ambassadors Matter

Don't overlook the importance of having a demonstrator present at the sampling station.

Even if a product does not require preparation and special handling, professional presentation reinforces the impact of a consumer's sampling experience.

A brand ambassador enhances consumer awareness about key features of the product. It raises the level of social pressure on consumers who are influenced by reciprocity shopping psychology.

A skilled demonstrator knows how to amp up the fun-factor a notch. This means drawing a larger crowd and driving up revenue in the end.

But Online Shopping Is King!

If this has been your argument against an in-store sampling campaign, then you simply must be referred back to Costco's amazing results!

Although a product may experience its highest demand through e-commerce sales, a sampling campaign is still the perfect complement to grow product awareness that will lead to more sales conversions and acquire new customers.

There is no technology yet available that allows a curious consumer the opportunity to feel, taste or smell your product before they buy. And that is, after all, the most pleasurable part of the shopping experience.

So give the shopping public what they want. Give them a sampling campaign featuring your product.

Get started by contacting a marketing professional to map out all of your strategy details.

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Tags: In-Store Sampling