Product-flyer location and type of product categories in retailing

Abstract This study examines the often-overlooked effect of product category type—high- vs. low-priced, high- vs. low-frequency, and high- vs. low-perishability—when assessing the effectiveness of product advertisement locations in retailer direct mail flyers. Employing a quasi-experimental design, we analyze a national retail chain’s various featured product weekly advertisements across the transaction records of 1817 products in 225 different product categories that cover a year of sales. All three-product types had a significant moderating effect on increasing the sales volume of the featured products when placed on the interior page feature location. For example, the interior pages are often ignored unless the recipient is sufficiently interested to flip through other parts of the flyer. Placing high-priced products, low-frequency products, and highly perishable products in the interior page feature location led to advertising effectiveness. In terms of frequency, the sales volume of high-frequency products were consistently higher than low-frequency products regardless of the location. On the other hand, the front and back page are the most visible pages of a flyer. In these two most visible locations, placing products that perish quickly maximized the effectiveness of using a flyer. These results highlight the importance of considering these three product types when making retail promotion decisions, including where retailers should position featured products within advertisements.