Walgreens' Beverage Category Reset Leverages VR
Once a year, Walgreens executes a beverage category reset, and it’s critical to get it right, according to Emily Miller, senior category manager for the retailer.
“It’s inexcusable to not merchandise appropriately for the customer that comes into brick-and-mortar because you are so lucky that they are coming into brick-and-mortar,” she said in October during a Path to Purchase Expo presentation in Minneapolis.
To get it right, Walgreens worked with beverage giant Coca-Cola Co. and virtual reality provider InContext Solutions to provide what Miller called “a simple addition to the reset process – with big impact.” Liz Picariello, senior category advisor at Coca-Cola, and Melissa Jurgens, group vice president, customer success, at InContext Solutions, were co-presenters.
Knowing that transaction-pack SKUs (including mini-cans) work well for the Walgreens shopper – especially Millennials – the partners used virtual testing to identify the optimal placement for transaction packs on shelves. Was a dedicated transaction-pack block within an existing brand block the way to go? Or would a separate vertical block merchandising all transaction packs together be more effective?
Ultimately, the partners wanted to measure sales impact and shopper impact, getting to the why behind the sales metrics.
The virtual testing comprised an online survey of targeted Walgreens shoppers that included a link to the virtual store environment provided by InContext Solutions. Hundreds of virtual shoppers experienced each shelf set (brand block and vertical block), and then the sales data was compared.
The key findings were:
- The vertical block drove highest total category dollars, with a double-digit increase in dollars per shoppers for transaction packs.
- Transaction packs overall and mini-cans specifically performed best (in terms of dollar sales) in the vertical block.
- The preference to shop was highest within the vertical block set among all respondents and especially Millennials, with almost all of them preferring the vertical block.
“To see almost 100% preference of a particular set is very, very significant,” Miller said.
The decision was made to roll out the vertical block to stores. “The in-market results are nearing what we saw virtually,” Picariello said. “The vertical block is generating a 15% share for transaction packs. We also got some insights on the shopper. … The number of shoppers buying mini-cans at Walgreens has doubled in size.”
According to Miller, virtual testing dramatically reduces cost savings compared to in-store testing, improves speed to market, provides rich sales and attitudinal data, eliminates store disruption, reduces risk of resets that don’t work and cost a retailer even more, and provides flexible and collaborative testing that allows you to make decisions on the fly.
“In-store testing used to be what we did … tests are almost archaic at this point,” Miller said. “I’ve done hundreds of tests in stores, and I can’t remember that I’ve ever had a very decisive result.”