A recent article in the Guardian suggested that retailers need to test their new business ideas in order to innovate and maintain profitability. Leading grocers are testing their new and innovative business ideas before rolling them out across their chain. Here are the top 6 initiatives these grocers are testing:
In a recent article in Retail Leader, Marek Polonski, Vice President at Applied Predictive Technologies, discusses how top retailers are leveraging scientific testing to improve efficiency and accuracy in inventory management. Three key points that he touches on are:
• Managing shrink
• Accounting for seasonality
• Optimizing ordering procedures
Click here to read the article.
A new concept store by Brookshire Brothers combines convenience store staples and gas with high quality home-prepared foods…and a wide variety of fishing supplies. This non-traditional concept has the potential to attract new customers and drive larger baskets through differentiation from typical convenience stores. (more…)
The worst drought in decades has sent American corn prices to a record high. The skyrocketing price of corn will heavily impact grocery stores, as field corn is in three quarters of the foods consumers buy in supermarkets. Though these increases in cost may be outside of grocers’ control, their impact on profits does not have to be.
To remain profitable in spite of rising costs, executives have considered many decision-making strategies. These decisions are often based on customer surveys, correlation studies, or simply “gut feeling”. Unfortunately, these approaches often lead to inaccurate answers. The only accurate method of minimizing the risk of major decisions is real-world testing. (more…)
Should grocery stores do the shopping for their customers? Some large grocers think the idea is worth testing.
Online grocery delivery has been around since Ahold’s Peapod home delivery service began in 1996, but it has yet to gain significant market share (in 2011 Peapod accounted for only 1.3% of Ahold’s sales). Although online grocery shopping is designed to maximize efficiency for consumers, many still prefer the in-store shopping experience. (more…)
Manufacturers often rely on innovative shelving and displays to promote new products and set themselves apart from the competition. While POS displays may be a great way to introduce or feature a particular product, there are often unintended consequences (both positive and negative) on other products in the portfolio. By learning about how non-promoted products are affected, top manufacturers are able to create innovative displays that beat the competition.
In most cases, by featuring a product on an in-store display, the manufacturer and retailer are going to drive sales of that product. However, often overlooked in judging the effectiveness of a display are the two secondary impacts:
- Consumers are drawn toward nearby products (halo effect) or
- Consumers are less likely to purchase similar products (cannibalization)
Acknowledging these impacts – and measuring them – is crucial to successful merchandising. (more…)
Data from the 2012 Shopper Engagement Study showed that three out of four shoppers wait until they get to the store to make a purchase decision. Given the investments in product-specific advertisements outside of the store by consumer goods marketers, this may be a surprising statistic to some. However, for your pricing and merchandising teams, this means a big group of persuadable consumers. From POP displays, to the color and messaging of packaging, to relative pricing of different same-brand SKUs on a shelf, there are countless avenues to try to convince consumers to choose your product over the competitor’s.
But as numerous studies (and probably personal experience) has demonstrated, consumer behavior is not only unpredictable, decisions are often illogical. One familiar example of the irrational consumer is the idea that having a lot of choices actually results in less sales because the consumer gets overwhelmed (this is one of the many reasons for Trader Joes enormous success). Daniel Ariely’s book, Predictably Irrational is, as the title suggests, full of examples like this. Based on these irrational truths, it is clear that the only real way to confirm or disprove your intuition is to try out your ideas in the real world before rolling out to your whole distribution channel.