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:

1. Private Label Introductions: Many grocers are expanding their private label varieties as a lower-cost alternative to branded merchandise. Retailers are testing these product introductions to quantify their overall profit impact, net of cannibalization and halo effects. Click here to read about the growing trend of private label products across the grocery industry.
2. Remodels: Today’s retailers are testing their remodel programs to understand which components drive the greatest return on investment. Grocers can then use this information to optimize their remodel programs by only rolling out profitable components to locations which will benefit most. Click here to read more about testing remodel programs.
3. Promotions: Customers have come to expect some kind of promotion or discount on their food purchases. Grocers are becoming smart about their promotions strategy by testing which offers lead to the least margin loss and highest overall sales. Many are even using loyalty cards to personalize their promotions. Click here to read about how a major grocer enhanced its customer loyalty program, generating millions in value.
4. Media impact: Many grocers are testing reductions in their print circulars by moving some print advertisements online. While some retailers have found that print circulars are still profitable in some markets, they have also found ways to profitably reduce their spending by shifting circular spend online in markets where it will be most profitable.
5. End-Cap Optimization: Grocers are constantly testing end-cap product placement. Placing products on end-caps can drive significant sales, but in order to determine which products drive the largest overall profits, when considering follow-on and attached sales, executives must execute controlled tests.
6. Aisle Resets: Aisle resets can drive incremental foot traffic and increased sales, but often includes upfront costs and the risk of cannibalizing other categories.  Click here to read about why executives should test aisle resets, like Coca-Cola’s BAR (Beverage Aisle Reinvention), before rolling the program out across their chain.

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