For as long as I can remember retailers have made huge assumptions about the shoppers that frequent their stores. It would seem that many of us in retailing made the leap that if you place an item somewhere in the rat maze of departments, alcoves, and aisles and provide a store map, a directory sign, or even more recently a shopping directory phone app, customers will eventually find what they are looking for. With any luck, those same shoppers will remember where you have stashed their favorite items and will commit it to memory.
If the scenario I just described sounds a bit one-sided, it is because it is. Most of the heavy lifting in self service retailing is done by the consumer. To that end, colleague, Dr. Herb Sorensen, author of the several books on shopper behavior refers to retail shoppers as “unpaid stock pickers”. Despite the one-sided nature of the retailer-shopper relationship, the shopper has accepted their role and some would admit that they enjoy ‘the hunt’. Alternatives fostered by technology and innovative competitive is about to change all of that.
Bricks retailers design stores primarily to house their wares, not to convenience the customer. Not once in the dozens of fixture planning meetings I attended over the years did I ever hear the question. “Does this store layout make sense for the shopper?” In the current retail environment that question must not only be answered, but it should be the first one asked.
What Has Historical Worked Well for the Retail, May No Longer Be Working for the Shopper
Making sense of what constitutes convenience for the shopper logically begins with what they buy. A first easy step for any retailer is to measure how much of their sales come from a minority of their sku’s. In many cases, a supermarket retailer carrying over 50,000 items will find that the top 300 generate as much as 30% of their sales. Intuitively, these 300 items should be a good starting point for a revised product placement strategy. Traditionally, retailers have chosen to strategically place many of these best sellers in the far reaches of their store footprint. However, a more shopper-centric approach would be to do exactly the opposite.
Creating a product placement plan based upon what shoppers actually buy as opposed to “what else” the retailer would like them to buy, places the priorities of the shopper first, allowing them to more efficiently find and buy the items they are in search of in as few steps and little time as possible.
Efficient product placement creates incremental sales and profit margin for the retailer as their customers are provided additional time to impulse buy other items, perhaps not on their list given the speed and efficiency they engaged what they were looking for originally. This approach works….consistently. Mark Heckman