Free Samples Increase Sales
PROVO, Utah – Dec 11, 2017 – Eating free samples at big box stores like Costco has become a weekend tradition for many shoppers. For adults with children, it’s often the only way to get shopping done while maintaining sanity.
But just how effective are free samples when it comes to actually attracting purchases and loyalty? Do they just provide customers with a free lunch? After all, marketers spend more than $2 billion annually on sampling.
New BYU research discovers the answer is a definitive yes.
“Sampling has both an immediate effect and a sustained impact on sales,” said Jeffrey Dotson, a professor of marketing in the Marriott School of Business. “But that impact varies according to the size of the store conducting the event.”
In a paper appearing in the Journal of Retailing, Dotson and coauthors Sandeep Chandakula and Qing Liu find that smaller stores with a smaller assortment of products seem to benefit more from sampling than larger stores. Dotson and his colleagues also found that in-store sampling outdoes simple end-of-aisle displays.
According to the study, end-of-aisle displays lose steam after two weeks whereas the effects of sampling linger for many weeks — in addition to beating displays for immediate results.
“The total effect of sampling, as measured by an incremental lift in sales, is much larger than that of in-store displays,” Dotson said.
The team of researchers, who represent BYU, University of Wisconsin-Madison and Singapore Management University, also found that repeated sampling for a single product produces increased returns and that sampling tends to expand a category rather than purely substitute for another product.
The study has led to a model that can assess the short- and long-term effects of sampling on sales of both the products offered for sample and competitive products. The authors created their model from a series of six scanner datasets collected on four different snack product categories, including both new and existing products, over a period of weeks.
Another fascinating finding: Execution of a sampling event by one brand led to an increase in sales for all brands in the category. This suggests category managers should focus on ways to increase total category profitability and not just the individual performance of a single item or brand. Authors said manufacturers will also appreciate a valuable rule of thumb revealed by the data: if the incremental cost of a sampling event exceeds 15 times the unit price of the product, the event ceases to be profitable.
Media Contact: Todd Hollingshead (801) 422-8373
Writer: Todd Hollingshead