Why is an in store sampling so damn expensive?

May 19, 2022

In store promotions can bring very high ROI or waste your money

If I had a nickel for every time I heard a variation of this question, I wouldn’t need to write this blog. Whenever the discussion about the value of in-store sampling or in-store product demo, I always ask - “compared to what”? CPG retail marketing strategy has a number of tools to create and/or improve customer demand which is the main goal of such investment.

There are many people who would argue that nebulous terms like “brand awareness”, etc are also critical elements of retail marketing strategy. I would respectfully disagree with pursuing a goal that cannot be quantified in a meaningful way. Brand is what consumers think about a provider of products, based on their personal experience with these products or the personal experience of other consumers, they can relate too.Therefore if products, collectively marketed by a brand A, consistently deliver an experience that exceeds consumer expectations over a period of time, the reputation of brand A is being built and its value is increasing. From this perspective any funds invested in activities promoting a brand outside of experiential marketing channels, are very expensive - because they deliver results which are very hard to measure or not relatable to actual business goals, i.e. Low or No Return on these investments.

There are many definitions of a retail marketing strategy that can be found online, in magazine articles and in thick paper books, but in simple words they all agree that retail marketing strategy is any set of activities that increase retail shoppers' traffic AND increase sales of the products in stores. Marketing managers often use in store promotions to stimulate sales of the products and improve customer experience.

So, why do so many CPG brand builders think that in-store sampling is more expensive than other marketing investments?Here are a few reasons why some retail marketing strategy practitioners hold this opinion:

  • Their experience is often limited to production of random in-store demos and production of “one of anything” is always very expensive. The overhead expense of scheduling a random experiential marketing event in a store, preparing appropriate promotional materials, finding and training quality brand ambassadors, etc. is overwhelming and often accounts for most of the overall budget. When the experiential marketing power of in-store demos is used strategically, as a set of activities like campaigns, the production overhead per event can be reduced substantially.

  • Their experience is limited to hands-off outsourcing of in-store demo events to the third parties that are focused on geographic coverage and staffing the events, as opposed to specialists in experiential marketing. The quality experiential marketing agencies are often small and local by design. It is a business which is very difficult to scale without a loss in quality. You can build relationships with a network of quality agencies, but it takes time and effort. Too many marketeers prepare to fund a single shot event staffing company who are not focused on finding and training quality brand ambassadors. Congratulations, you just turned your experiential marketing budget into a high expense line item without knowing what kind of your product experience was delivered to the shoppers or whether it was even delivered at all.

  • Let’s look at the actual data to answer this question. I examined the sample of 1,152 in-store demos conducted at multiple stores (134) during the first half of the last full year when in store promotions allowed in retail stores at a loaded cost of a demo of $180. While an average demo served a taste or an experience to 73.52 shoppers during its length, almost 25% of these shoppers (24.73%) made a purchase of the promoted product. In our data sample an average in-store demo costs $9.90 per customer acquired. If you compare the average CAC (Customer Acquisition Cost) of digital marketing campaigns for the same products, you will find it is more than twice higher than one generated by an in-store demo.

In conclusion, an in-store sampling is not damn “expensive” or dirt “cheap”, it can be valuable or wasteful. It is not just WHAT you choose to do, it is HOW you decide to execute it. If you are ready to extract measurable value from your in-store experiential marketing investment, we can help to make it a reality. Schedule online demonstration of our in-store sampling management platform or request a free trial to see how it works.