From tweaking store layouts to localizing assortments, here are some things retailers can do right now to put customers front and center.
By Candace Adams, Ph.D.
Consumers today are still reeling from the country’s economic doldrums. When grocery shopping, they are confronted with too many SKUs, banners and channels. As a result, retailers face the enormous challenge of operating stores that provide value and an efficient shopping experience. It is time to focus on the shopper.
The starting point of that process is determining where the purchase decision is made and why. According to a study from SymphonyIRI Group, 66% of decisions are made in front of the shelf, which underscores the need for effective in-store messaging. What about the other 34% of decisions? Are they impulse or pre-determined and planned at home, elsewhere in the store or post-store? Knowing where those purchase decisions are made helps to target marketing efforts and optimize media outreach.
Here are seven strategies that retailers can deploy to build a tighter connection with their shoppers:
Design stores with the shopper in mind: A study from the Food Marketing Institute found that a shopper-friendly store layout significantly impacts where consumers shop for groceries. A well-designed supermarket would have less clutter, wider aisles, simple signage, better lighting, customer service stations and a logical flow that promotes more foot traffic.
Increase relevance: Retailers need to know who their customers are and customize a store for them. In other words, anticipate customers’ needs and then fill them by merchandising the right products at the right price in the right place at the right time.
For example, a supermarket in an area with lots of seniors of all ethnicities should be different than a store where many singles and young married couples live. The latter groups would appreciate Giant Food Store’s new convenience format, Giant to Go, in Lancaster, Pa., where they can pick up cappuccinos, frozen drinks, subs and wraps and be on their way quickly.
Localize assortments: The classic example of localizing assortments takes place in a grocery store in a Hispanic neighborhood. These stores often offer a wide assortment of special produce and ethnic packaged goods combined with a tortilleria to appeal to the local shoppers.
To serve its mix of customers better, Giant Eagle has automated its stock selection by deploying a system that tailors inventory based on buying data. A computerized system uses local demographics, customer data, sales patterns, store sizes and locations to determine which products to stock, how much to order, how to price them and where to place them in the stores.
Merchandise meal solutions: Planning family meals can be stressful for working moms. Retailers need to offer merchandising solutions that help her plan and prepare appealing, healthful meals as an alternative to low-nutrition fast food. To re-claim sales from quick-serve restaurants and other casual dining outlets, supermarkets should offer hot meal solutions, special aisles with microwaveable meals and meal-planning kiosks.
Simplify choice: Most store shelves are bloated with every form of size and flavor of products. Variety is good, but duplication is not. Witness the breakfast cereal aisle or the analgesic assortment. All too often there are too many choices for a shopping trip that averages 20 minutes. Consumers are increasingly seeking edited choice as opposed to unlimited choice.
Focus on health and wellness: As the number of seniors increases and the problem of obesity across all age groups persists, supermarkets need to be a focal point for health and wellness. Promoting healthful foods and conducting nutrition tours should also be part of the mix.
Walgreens launched a health-oriented campaign that focuses on weight loss, smoking cessation and vitamin/supplement usage. Walmart has a five-year plan to make thousands of its packaged foods lower in unhealthy salts, fats and sugars and to drop prices on fruits and vegetables.
Eliminate excess costs: Retailers need to promote efforts to reduce a store’s carbon footprint and to increase “green” initiatives. Deploy operational efficiencies to reduce costs, and then pass along the savings to customers. Savvy consumers recognize and appreciate these efforts and frequent stores that are eco-friendly and stock products that offer better value than the competition.
In summary, a good customer experience in store is the key to success. Focus on consumer-centric merchandising with a unique positioning. Shoppers will reward you with their loyalty.
Candace Adams, Ph.D., is president of global retail strategy for SmartRevenue, a Stamford, Conn.-based firm that provides insights, strategies and solutions to retailers, manufacturers and service providers.