How Grocers can become a Gift-shopping Destination

Nik KhotekarNik Khotekar, director of business development and entrepreneurship at Prism Skylabs, shares with Grocery Headquarters his advice for grocers who want to boost food and nonfood gift sales.

Grocery stores are not the first place that comes to consumers’ minds for gift shopping. How can they become a gift-shopping destination for both food and nonfood gifts?

Nik Khotekar: The key is optimizing merchandising. By pairing Valentine’s Day gifts, such as chocolates or flowers, with other popular items, grocery stores can make it easy for customers to find what they need. Grocery stores can even go beyond that by optimizing exactly where to place signage and how to arrange displays. That’s where heatmaps come in. They highlight which products customers interact with the most and how they move through the store.

What types services can/should grocers offer in order to become a gift destination?

Stores have to earn their status as a gift destination. It means doing the basics very well all the time — having clean floors, good lighting and proper shelving are must-haves — and reminding customers of gift-buying opportunities. How do new signage and displays affect wine and chocolate purchases? By testing and measuring new promotions, grocery stores can become meaningful gift destinations.

What are some key stats for grocery retailers to know to maximize their Valentine’s Day and Easter sales?

Grocery shoppers are usually time constrained and expect a quick and convenient shopping experience. Traffic into stores and a specific department is a good start and having this information over seasons will help optimize staffing to serve higher customer traffic within the store. It helps to know that the market is definitely there: Over half (54%) of Americans make Valentine’s Day purchases of food, gifts and cards. Over 200 million roses alone are grown for this holiday. With that knowledge, it’s all about customizing grocery stores to meet customer demand.

What technology trends do you see in retail for 2014 – specifically in grocery stores?

Grocery stores will be using more mobile and in-store technology to reach customers. Take Whole Foods, for example – just last week, they announced a partnership with Square that would allow customers to make purchases without having to go to the checkout line. This is representative of a larger trend: across the board, stores are getting smarter. They’re using analytics to better merchandise popular products and optimize staffing levels, and embrace new mobile technology to create targeted, personalized experiences for shoppers.

How do you see retail analytics, which are commonly used by non-grocery retailers, benefitting grocery store sales?

At their core, retail analytics measure traffic levels, movement patterns, crowd sizes and product popularity.  Those tools are useful across brick and mortar, whether it’s for apparel stores, boutiques or grocery chains. When integrated with existing supermarket camera systems, retail analytics can also be used for visual audits – instead of relying on the expensive secret shopper programs that grocery stores traditionally use. Retail analytics can just as easily be applied to improve grocery store design, ensure cleanliness and adherence to safety standards, optimize premium CPG and product placement, minimize queue times, and most importantly – boost sales.

How do you think retail analytics can help grocers specifically around Valentine’s Day?

Holiday shopping brings out a unique set of challenges. Retail analytics like heatmaps, customer counts, crowd counts and pathmaps can show grocers exactly how customers move around the store, which holiday marketing and promotions garner the most customer interest, what the busiest hours are, and what gifts and seasonal staples are most popular. These insights can guide Valentine’s Day merchandise and marketing, and ensure that seasonal products are in the ideal location.

Retail analytics can help stores optimize placement of pop up gift stores and provide concrete data to justify the added expense

What are the cost saving benefits?

Retail analytics can easily reduce auditing costs, improve the customer experience, and increase sales per square foot. Grocers can also use them to monitor lines and cut queue wait times, boosting sales during hectic holiday times and optimizing staffing during slow hours. Simple auditing tasks like ensuring clean floors and stocked merchandise can be done remotely, cutting the time and budget required by in-store audits.

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