How important is the in-store environment for new brands?

Abstract

New brand launches are notoriously risky, with high failure rates. Yet, most research focuses on the out-of-store factors inherent to their success/failure, overlooking strategies that can be employed in-store. The present research addresses this oversight by examining the influence of two in-store factors, distraction and shelf position, and their impact on a new brand’s visibility on the shelf. We draw on a unique data set featuring a real-life new brand entrant into the Australian market. Using an experimental design in a shopper laboratory, and mobile eye-tracking, we find that the new brand stands a greater chance of being noticed and visually attended to on the shelf when shoppers are distracted. This is attributed to shoppers dwelling longer in front of the fixture, being more open to new-to-the-consumer brands, and by negatively affecting the top-down processing of existing brands on the shelf. We also find that optimising shelf position, which is a common in-store marketing tactic for existing brands, may not produce the same return on investment for a new brand. The findings offer valuable theoretical and practical implications for improving the success rates of new brand launches, including selection of distribution channels, allocation of marketing resources, and the interplay between in-store and out-of-sore factors driving shopper behaviour.