Can the quantity and arrangement of stock on a store shelf affect consumers’ buying behaviour?
It is not uncommon to assume that the price of a product dictates its level of quality and exclusivity. However, a research project undertaken by Professor Ian Phau and Dr Min Teah from the Faculty of Business and Law suggests the volume and presentation of a product can have a major impact on purchasing behaviour, particularly when it comes to luxury brands.
It all began with Gabriel Chocolate, a boutique, small-batch chocolate producer based in Margaret River. The company wanted to gain a better understanding of their current and potential target market, specifically how and why consumers made their purchasing decisions, and how Gabriel products compared to competitor products.
“What Gabriel Chocolate really wanted to understand was the behaviours of people when they’re going through the stores, to enable the company to position themselves as a premium brand.
“So the research team came up with the shelf-based scarcity study which looked at how stock levels on the store shelves and the organisation of the products on the shelves affected or changed people’s perceptions of the product, and the store atmosphere overall,” Dr Teah explains.
The project was rolled out in stages, with the initial phase focusing on shelf-based scarcity. Four participant groups were asked to review shelf displays that featured low, middle and high stock levels versus both disorganised and organised shelf displays.
The next stage of the project focused on obtaining participants’ preferences for store atmospherics, using The HIVE, a facility at Curtin’s main Perth campus that has visualisation, virtualisation and simulation capabilities. Phau, Dr Teah and their research team captured 360-degree footage of the Gabriel Chocolate store in Margaret River and then projected it in The HIVE, allowing participants to experience the look and feel of the store.
Throughout both phases, the researchers utilised surveys as well as psycho-physiological techniques including facial electromyography to assess participants’ implicit attitude and emotion, skin conductance for arousal and heart rate, and blood pressure to gauge their level of engagement, stress and interest in response to product scarcity and shelf organisation.
The project provided rich results, revealing that over-stocked shelves, particularly those that were disorganised, were far less appealing and more closely connected with cheaper products, resembling sale items in bargain bins.
“When a lot of people rummaged through the shelves, the consensus was that it took away the luxurious component of the chocolate,” Dr Teah reveals.
However, too few products on the shelf resulted in an unexpected reaction from participants.
“We observed that people were reluctant to purchase the chocolate if it was the last bar on the shelf. When we asked why, we received the same response each time: they felt guilty for taking the last product in stock and so preferred to leave it for the next person.”
The researchers determined that in order for a luxury brand such as Gabriel Chocolate to represent their products as individual creations, each unique from the next, whilst maintaining a sense of exclusivity, there was an ideal formula: a medium-stocked shelf that was neat and organised.
“In terms of shelf scarcity and displaying stock, it’s best to ensure stock levels are continuously adequate,” Dr Teah says.
The project also revealed a knowledge gap in the retail sector regarding luxury item store layout and atmosphere, and the importance of the ‘sensory experience’. Gabriel Chocolate were looking to expand beyond Margaret River by opening a store in Fremantle, however, as the chocolate would not be made on-site, the challenge was to engage people’s senses outside of the chocolate factory-style setting.
“Our experiments confirmed that while shelf displays are a great way to enhance a brand, store atmospherics are just as important. People want to engage with a space in a sensory way. They want their sense of smell, touch and sight stimulated,” Dr Teah explains.
Gabriel cleverly decided to transform its Fremantle store into a café, drawing customers in with decadent smells of roasting coffee, who would then be more inclined to purchase a deluxe chocolate to complement their experience.
“The Fremantle store is not meant to be a replica of the chocolate factory in Margaret River. It’s more about the fact that you can go there for coffee and appreciate a café-style setting. It’s for this reason we recommended that Gabriel position their cookies at the front of the store – coffee and cookies go hand-in-hand. Then as people move towards the back of the store, they can explore the range of chocolate and even enjoy a cascading chocolate waterfall,” Dr Teah says.
Dr Teah, Phau and their team hope that their formula for product position and store atmosphere can be utilised across a range of retail luxury brands.
“We hope that the data collected and approaches developed can be used by a number of different luxury brands, especially those that involve sensory interaction, such as gourmet foods, because there’s always the smell to it but it’s not limited to that. Taste, smell, touch and sight all combine to create an experience.”
Business at Curtin
This series of articles highlights the impactful research taking place at Curtin Business School and Curtin Law School.
In 2018, we explore how partnerships between universities and organisations from all sectors of the economy are solving today’s pressing business challenges and improving organisational agility.