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What is the "halo effect"?
Learn about the history of the "halo effect, what it actually means, where it came from, and how it impacts CPG brands
The term “halo effect” is tossed around frequently in both the retail and ecommerce space. But what does it actually mean, where did it come from, and how does it impact your brand?
Let’s dig in. 😇
The term “halo effect” dates back to the 20th century. It was coined by psychologist Edward Thorndike, who stated that: “a halo effect is a form of cognitive bias where one aspect of a person, brand, or institution influences our overall perception.”
TLDR: people’s assumptions and expectations about a broad concept can be formed from a single experience.
Think of the halo effect like a glowing central light that then illuminates the rest of the room.
In the CPG space, the halo effect largely refers to a consumer's favoritism toward a brand - or even a retailer - as a result of a singular positive interaction.
This interaction may be product specific: e.g. a consumer tried and liked a specific sparkling water flavor from your brand, or experience specific: e.g. a consumer had a positive and streamlined experience purchasing one of your products. The halo effect is correlated to brand loyalty and contributes to an increased share of wallet.
Companies successfully capturing greater share of wallet become the leaders in their industry.
👿 The opposite of the halo effect is the horn effect. When consumers have an unfavorable interaction with a specific product or purchasing experience, they correlate that single negative encounter with everything associated with a brand.
The initial steps for achieving the halo effect begin with your brand’s marketing efforts: curating your social media presence to improve brand image and visibility, running paid advertising for greater reach and awareness, etc.
Focusing on your consumers’ purchasing experience, however, can have the greatest impact. The easiest way to develop an experience specific halo effect is by providing omnichannel shopping options.
Omnichannel = being everywhere your shoppers want to buy.
Providing shoppers with a unified experience across digital and physical channels, from browsing to fulfillment.
Successful brands do more than just show up online or in-store. They understand their customers’ preferences and tailor all marketing and purchasing options to meet them. Enabling retail ecommerce is the easiest way to provide this seamless, user friendly experience for every potential shopper.
Retail ecommerce creates the path for purchasing products via retailers’ online shopping carts.
For CPG brands, effectively operating in the channel involves enabling shoppability (by connecting to all retail ecommerce carts with accurate inventory scanning), leveraging actionable insights, and capturing closed-loop data that fuels performance marketing.
By offering the most convenient purchasing option for every consumer, your brand develops a positive perception that extends beyond single products or purchases and captures overall share of wallet.
The halo effect can be one of the most powerful assets to a brand, as it increases brand awareness, trial, and repeat purchases. Achieving it is no easy feat, but Pear can help.
Schedule a demo with our team to learn how to leverage the halo effect for your brand and capture a greater share of wallet with retail ecommerce.
Five years ago, retail ecommerce didn’t exist. Today, supporting the channel is table stakes for consumer packaged goods brands.
This playbook is designed to guide CPG brands from the stages of awareness to purchase at retail. Whether you’re interested in retail ecommerce as a new channel opportunity or looking to level up existing efforts, The Retail Ecommerce Playbook covers tools, tips, and examples to help your brand succeed.
