Ever feel like you go into autopilot mode when shopping for groceries? Often, people get similar items every time they go into the grocery store, so they don’t realize how product placement on shelves influences them to pick similar items each time. At first glance, you may think that product placement is random, but there are strategic decisions and a whole lot of money behind how these products are organized on the shelves. Eye-level placement is influenced by three main factors: consumer psychology, retailer agreements, and brand competition.

Consumer Psychology

When walking down any aisle in the grocery store, shoppers will tend to focus on what is ahead or directly at eye-level rather than scanning up and down. When doing a task such as shopping, many people go into automatic mode. In other words, they will grab the item which requires the least amount of effort. When not much effort has to be spent this can lead to a greater chance of impulse purchasing. This mindset can get people in trouble because they start thinking, “It isn’t much more money to get this item as well”.

Companies are smartly targeting various demographics at the same time when a family is walking down an grocery aisle. For example, walking down the cereal aisle, kids’ cereals such as Lucky Charms or Fruit Loops are placed lower at the eye-level of kids while “adult” cereals such as Special K are placed higher up to entice more health-conscious shoppers. Each demographic is being served at the same time which is the whole purpose of consumer psychology.

Retailer and Brand Agreements

Consumer psychology is extremely effective when people are deciding what to buy, however, there are deals behind the scenes that ultimately decide where a lot of brands end up on the shelves. These deals are often referred to as slotting fees. Think of any national brand such as Coca-Cola or Campbell’s and you’ll probably find they are paying retailers these slotting fees to have premium placement on shelves.

Slotting fees aren’t cheap and are very competitive. Which means only brands with strong financial positions will be able to afford these premium shelf spaces. For example, drink juggernauts of Coca-Cola and Pepsi have the refrigerator/drink sections filled with their products because they have negotiated contracts for these premium spots. This means new drink companies have an uphill battle to get noticed by customers.

Brand Competition

While national brands with a lot of financial backing get premium shelf space, cost-conscious customers are willing to search a little more for generic/store brands to save money. In some cases, these generic/store brands are placed right next to the name brands to encourage customers to shop these options. Store brands are produced by third-party manufacturers, so it allows for a higher profit margins while cutting out the middlemen of the national brands.

One thing is for sure, stores are not placing products by accident. They have a marketing strategy to subconsciously convince you to buy certain products/brands or influence you to buy more. Next time you are out shopping, you can briefly snap out of autopilot mode and consciously look at how products are placed and see if those are really the products you want to be purchasing. You may just find your new favorite product at the bottom of the shelf.

The College of Business is asking students to help answer a variety of business questions like this one in the new Instagram series, “Unpacking Business Mysteries.” Follow along and join the conversation @idahostateu_cob