Washington D.C. – The New York Times is reporting that many retailers are going back to the true and tried strategy of stocking their shelves, aisles and backrooms with more inventory. As we discussed before, the notion of shoppers preferring to have less choice is a myth. Many retailers learned this the hard way in the last 3-5 years: SKU rationalization efforts have not worked as well as merchants at the leading retailers have hoped. (more…)
UPDATE: CVS & Walmart are testing new fuel discounts tied to minimum spend levels in their retail stores
Shoppers in many markets around the U.S. take advantage of them, but are discounts on gasoline an effective way to build supermarket shopper loyalty and drive traffic into stores?
Kroger certainly believes so. In announcing his chain’s strong first quarter earnings for 2011, Kroger chairman and CEO David Dillon commented that “the combination of having gas near our supermarkets is a very strong convenience… [customers] like the tie-in with our store sales.”
Washington D.C. – Is grocery moving online? BusinessWeek reported earlier that Walmart is said to be experimenting with online grocery delivery. At the same time, many supermarket chains are expanding their grocery curbside pickup services. SuperMarket News is reporting that Harris Teeter is slashing its shop-online-pickup-groceries-curbside-at-the-store fee from $4.95 to $1.95. At $1.95, the fee likely only covers the cost of processing the online payment for Harris Teeter. At the same time other grocers are actively testing the curbside pickup options at their stores as well. Why do it? (more…)
Washington D.C. – In case you missed it, Business Excellence Magazine has a great article by APT SVP Phil Marlsland on why companies need rigorous market trials to maximize ROI on their investments. Examples are from Wawa, Big Lots, Family Mart, Boots and other companies.
Washington D.C. – Ever since Wanamaker uttered his succinct, if over-cited, quote about the challenge in correctly attributing the impact of advertising, many a pundit has spilled ink pontificating about the right way to measure returns. Marketing leaders (and frequently, their finance counterparts) roller-coaster between gut-wrenching agony when a campaign doesn’t impact sales to sheer ebullience when finding a hit that drives dollars and creates buzz.
Washington D.C. – In case you missed it, Harvard Business Review has an interesting Step-by-Step Guide to Smart Business Experiments. Eric Anderson and Duncan Simester discuss how sophisticated executives are answering this question leveraging the scientific method. While seemingly straightforward, even the most advanced companies find it difficult to design rigorous, in-market, consumer-facing tests and use insights from these tests to guide strategy. Most Fortune 500 companies are now using APT to successfully design and learn from smart business experiments.
Washington D.C. – In case you missed it, Fast Company published an interview with APT SVP Jonathan Marek detailing the ways in which in-market tests are allowing retailers, restaurant, and other consumer facing businesses to measure the impact of location-based services like Foursquare and Facebook. It is a great read if you are interested in seeing beyond the hype and wanting to understand the true incremental impact social media has on an average consumer.
Washington D.C. – In what has become a seasonal ritual, the Girl Scouts set up shop in front of our office building in March to sell their fabled mix of cookies. Mysteriously missing was one of my favorites: Dulce de Leche. No worries, more money to buy Thin Mints, my thinking went.
It was only after a colleague forwarded a Wall Street Journal article highlighting innovative changes being made in this year’s cookie line-up that I realized how much grocery and convenience retailers could learn from the Girl Scouts.
Girl Scouts and SKU Rationalization
It turns out the girl scouts are in the midst of reducing their assortment. But it is the way in which they are going about the SKU rationalization effort that is truly admirable. To quote from the article:
A dozen councils testing the cutbacks with licensed baker Little Brownie Bakers, which is owned by Kellogg Co., hope to streamline sales, speed up cookie delivery and, ultimately, increase profits. (more…)
Washington D.C. – Fortune Magazine recently profiled Trader Joe’s, one of America’s most successful “new” grocers. Small assortments of primarily high quality private brand products dominate Trader Joe’s shelves. These private label products are at times sourced from the same manufacturers that make the national brands found in most regular supermarkets. Trader Joe’s business model is one that a number of established grocery chains are looking to emulate – with notable success: recent numbers show store brands attracted a stunning 30% of food servings sold (measured by unit volume) accounting for 17.4% of total dollar volume. Some analyst predict that this volume could double in the next 15 years.
As is constantly reported, national brands are feeling the pinch as grocers reconsider the power of national brands within their product assortment. Aldi, Trader Joe’s and Save-A-Lot are have proven that they can retain customer loyalty while offering few brand-name products. Target’s success in differentiating its Archer’s Farms and Market Pantry in-house brands is driving a growing number of retailers to shift assortments to more prominently emphasize private label offerings. (more…)
Washington D.C. – Auto fuel has always been the economic poster-child of price transparency, efficient markets, and easy menu-changing. But any gas station owner will tell you that there’s still some money to be made at the pump. Yet given the razor thin margins on fuel, the game has, of course, moved away from the pump and into the store.
This shift has profoundly changed the make-up of where the gas game is played – very few pure refueling stations exist anymore and new entrants are looking to use zero-margin fuel as a traffic driver: grocer Stop & Shop recently announced that it will be ramping up their fuel service offering, opening their first location in Quincy, MA. (more…)