Click 'Read Original' for details. Continuous analysis of key factors influencing purchase decisions, ranking them by importance, and adjusting product displays accordingly... Behind every order we place, there is a lot of 'involuntariness'. "The better-selling the product, the larger the display area; the higher the profit, the better the display position." You may have heard similar display rules and easily understand them—sales and profit are always the most concerned indicators for brand owners and channel distributors, and any party will pursue profit maximization. If you look at display guideline charts released by FMCG companies like Mengniu, Mars, or P&G, you'll find many common rules: for example, products of the same category should be displayed together, all flavors or packaging of the same brand should be grouped, and vertical arrangement from small to large packaging, with heavier items at the bottom... These are considered common industry practices, and ensuring that the same color block is displayed together has been proven to attract consumers' attention for a longer time. Behind these display decisions, of course, there is data support. For example, Mars found that if different varieties are displayed overlapping, such as mixing brown-packaged M&M's chocolate with yellow-packaged chocolate, it could lose 16% of sales. Zhang Ying, Director of Retail Value Innovation at P&G (China) Marketing Co., Ltd., also told CBN Weekly, "Consumers' sight is not easily attracted by horizontal color blocks, but they are sensitive to vertical color blocks. This is why products used to be arranged vertically." Mars found that if different varieties are displayed overlapping and cross-mixed, it could lose 16% of sales. Consumers are clearly accustomed to this. For example, when shopping in a supermarket, when we want a large package, we consciously bend down to find it on the bottom shelf, even if that layer is the least conspicuous. But P&G recently changed its display rules for hair care products, overturning the principle of "from small to large, vertical" and instead emphasizing the importance of horizontal color blocks. In this reform called Shopper Based Design (SBD) 4.0, P&G emphasizes placing small, large, and related products of the same type and function side by side, because "horizontal display of the same color block wider than 30 cm is more likely to attract consumers' attention" — for a 750ml conditioner, this means at least three bottles side by side. P&G overturned the "from small to large, vertical" principle for hair care products, instead emphasizing the importance of horizontal color blocks. More specifically, in the past, the 750ml Pantene "Pro-V Repair & Care" conditioner was placed on the bottom shelf together with "Silky Smooth" shampoo. Now it has been moved to the second or third shelf from the top, placed side by side with various sizes of "Pro-V Repair & Care" shampoo, with matching hair masks and serums nearby. The intention of this strategy is clear: P&G wants to drive sales of large packages and related products, thereby increasing the average transaction value. This has always been P&G's display goal given its complex product lines, and it is also the process of SBD evolving from 1.0 to 4.0. For example, in SBD 2.0, P&G placed the high-end brand VS Sassoon alone at the front of the shelf because P&G had already discovered that under the general trend of consumption upgrading, the market demand for high-end categories had significantly increased. Of course, powerful channels like large supermarkets also have their own interests. P&G's launch of SBD 4.0 is largely due to the fact that "there are more and more hair care products on the market, with many new imported and domestic brands. If we still use the old display methods on the shelf, color blocks will be confused." Therefore, P&G's new manual also has the motivation to assist channel distributors in optimizing product selection. "This is an optimization covering all brands. If P&G's own category returns are not good, they will also be removed from the shelf," Zhang Ying said. "Unlike domestic brands that directly spend money to buy shelf space, P&G tends to provide display solutions to channel distributors to bring them efficiency improvements," a former P&G employee told CBN Weekly. More bluntly, P&G's products have low gross margins and are not attractive enough to channel distributors. Maintaining cooperative relationships and display advantages through category optimization is the logic behind this. The ultimate motivation for FMCG companies is to get consumers to buy more products, so consumer psychology is the most important theoretical basis for them, and decision trees are almost a common display strategy reference for various brands. This term sounds a bit awkward, but it is not difficult to understand. For example, for a specific category, brands try to understand the decision-making process of consumer purchase behavior—do they first consider price, specification, brand, color, or function? Through consumer interviews and actual observations in stores, researchers rank these factors by importance and then design displays based on the ranking results. For instance, if the ranking is price, efficacy, and specification, the display should first be categorized by price, then subdivided by function and specification. For different channels, the display logic also varies. Target in the US is positioned as an upscale discount store, but you can imagine that too many discount banners would make the store look less fashionable, which is not good for daily chemical products. In the past, P&G's hair care products at Target followed the general principle of categorizing shampoo, conditioner, and serum separately. But to turn it into a "modern store that customers think of first when they want to buy beauty and daily chemical products," P&G introduced a display method based on function, categorizing products by selling points such as smoothness, shine, curls, time reversal, and salon quality. Back to P&G's recent display adjustment for shampoo and conditioner, the main reason is that P&G found that the importance of product function and series classification to consumers has increased. For example, people who have permed their hair multiple times will first look for products suitable for damaged hair. From the brand's perspective, P&G naturally needs to cater to this consumption trend and push suitable products to consumers at once, creating opportunities for them to buy more. But for products like laundry detergent, the consumer decision tree is another model. This is why SBD 4.0 only targets hair care products. Mo Zhuangjie has served as general manager of several Ole' stores. He believes that arranging shelves neatly and beautifully is one thing, but prompting customers to buy is another. Taking cheese as an example, to help consumers quickly find the specific variety they need, he abandoned the method of displaying by brand—the latter would look tidier, but consumers couldn't find the product, thus losing sales opportunities. Applying the decision tree principle, consumers pay more attention to variety than brand when choosing cheese. Ole' stores display cheese by variety rather than brand because consumers pay more attention to the former than the latter. After studying the direction of display strategy based on consumer behavior, how to embody this display logic in specific consumption scenarios is another complex issue. The shift from vertical to horizontal display sounds simple, but P&G's consumer research and market strategy teams still need to solve execution issues, such as: What should the new shelf look like? After the change, what impact will it have on sales of different package sizes? After changing the previous cross-selling display logic, how high is the probability that consumers will choose to buy one more item? To verify these issues, P&G has a complex testing process, including: first testing in a virtual supermarket in P&G's innovation center, then conducting random tests at real channel distributors, and even having consumers wear special glasses to track their eye movements—all to understand how consumers "identify" and "choose" products, which P&G regards as the "First and Second Moments of Truth" that determine sales. About 13 kilometers from P&G's US headquarters, there is a "consumer village" with a similar virtual store. Respondents are invited to experience the store and simulate real shopping scenarios. The shelves contain both P&G products and competitors' products, just like an ordinary convenience store. In actual stores, many manufacturers are already following this horizontal eye-catching display method. But an insider from a domestic shampoo brand told CBN Weekly that compared to horizontal or vertical, he pays more attention to whether the main brands' displays maximize shelf space, whether they use additional decorations like "dressing up" to vividly highlight products, and whether products are obvious and easy for consumers to pick up. FMCG companies study shelf displays with the ultimate goal of getting consumers to buy more products. If you study further, you'll find that these starting points are related to the brand he operates—except for gift boxes containing small packages, the brand mainly promotes large packages. Moreover, to differentiate from online products, offline only sells shampoo and conditioner, with few related products. This shows that different types and development stages of brands have different display demands. But in any case, P&G's case shows that some general theories previously referenced can be overturned because consumers and the market are constantly changing, and the pace of change has accelerated in recent years. Now, Zhang Ying's another topic is introducing the concept of "situational consumption," which observes how consumers make purchase decisions across all channels with the popularity of e-commerce and mobile shopping. "Why do consumers decide to buy this item at a convenience store, a supermarket, or online? What is the decision logic behind it?" P&G will feed the results back to channel distributors to discover opportunities for business growth in this context. Source: CBN Weekly (ID: CBNweekly2008)