Applying the triple coherence line to in-store marketing plans to increase private label market share

Abstract

Difficult economic times might encourage private label purchases, though most such decisions occur in-store. The current study therefore presents an analysis of whether in-store displays (ISD) exert similar effects on private labels versus national brands, which ISD are most effective, and how retailers can maximize their effects. With a triple coherence line (TCL) framework, the authors determine ISD that favor a decision process in which the consumer can easily recognize the benefits of a promotion, increase their impact on sales, especially if the product itself offers similar benefits. They establish a novel, unique data set of scanner and observational data about daily product prices and sales in 22 categories, according to the uses of different ISD (shelf signage, end-of-aisle, islands) and promotions (price, product). The results confirm their different effects on private labels versus national brands; when ISD facilitate decision processes that are congruent with private-label purchase motivations, they exert greater effects on sales, and these effects can be maximized by applying the TCL framework. In detail, shelf signage that stimulates more cognitive and rational purchase decisions exerts powerful effects on private label purchases, which get reinforced by price promotions. These insights extend previous studies of in-store marketing actions and purchase decisions, leading to some useful recommendations for retailers.