View
0
Download
0
Category
Preview:
Citation preview
1 Retail & Shopper
Accelerating Sales & ProfitsHerb Sorensen, Ph.D., Scientific Advisor, TNS Retail & Shopper
3-6% Lift in 3-6 Months
Small Levers, Big Impact
For the retailer . . .
. . . a little longer for the brand.
Retail & Shopper
Tiered Sales – “Customers”
Supplier
Retailer
Shopper
Consumer
Retail & Shopper
Retailer Profits (US supermarkets)
Supplier funds – slotting fees, promos, trade allowances
Float – interest on cash received, pending disbursements
Real Estate – buying, developing, managing property
Margin on sales to shoppers
Retail & Shopper
5 Retail & Shopper
The BIG Problem . . .
Up to 80% of the shoppers time in the store is WASTED!!!*
. . . it is also a BIG Opportunity! ! !
*The 'Traveling Salesman' Goes Shopping: The Efficiency of Purchasing Patterns in the Grocery Store
http://knowledge.wharton.upenn.edu/article.cfm?articleid=1608
Retail & Shopper
Where is the . . . ?
. . . which one do I want?
Twin Sales Barriers
Very attractive . . .
. . . but not very selling!!! Retail & Shopper
The faster you close sales . . .
Sorensen’s First Principle of Retail Sales
. . . the more you will sell!!!Retail & Shopper
$0
$5
$10
$15
$20
$25
$30
$35
$40
Ann
ual S
tore
Sal
es
(milli
ons)
405060708090Speed of Closing Sales
(seconds per dollar)
Faster Selling!
Faster Selling!
Means more Sales!!!
Means more Sales!!!
Retail & Shopper
Retail & Shopper
The Holy Grail – Active Retailing
To know exactly what each shopper wants, or may buy, as they come through the front door.
To deliver that to them right away, accepting their cash quickly and speeding them on their way.
11 Retail & Shopper
“The Amazonification of Walmart”
Retail & Shopper
Retail & Shopper
Shopper Efficiency Regression
Coeff t Coeff t
Intercept 3.00 0.64 1.641 2.25**Avg Purchase Time ‐0.21 ‐2.65*** ‐0.074 ‐6.01***Trip Length 0.02 2.77*** 0.003 3.32***Trip Duration 0.02 2.87*** 0.007 5.35***
Prob > FR SqAdj R Sq*p<0.10 **p<0.05 ***p<0.01
Basket $s Purchase Count
0.000.500.49
0.000.700.70
The Faster You Buy, the More You Buy – Shopper Efficiency• H1: Decrease in Purchase Time results in an increase
in basket dollars and items
A one second decrease in average
Purchase Time increases Basket Size by
$0.21!A one second
decrease in average Purchase Time increases
Item Count by0.07
Retail & Shopper
Decreasing Purchase Time results in larger baskets more effectively than does encouraging longer trips
Retail & Shopper
Faster Buying Results in More Purchases
36.67
43.67
24.14
19.5
$11.13
$12.76
$35.01
$53.86
AvgPurchase
Time
TotalBasket
Size
(Seconds)
Retail & Shopper
Planned Purchases Take as Long to Buy as Impulse Purchases
Retail & Shopper
The Three Key Things to Know
1. How many items does the shopper want to buy – or you might be able to sell them?
2. Exactly what are those items?
3. How best to sell those items – locations and techniques?
Most Common Number of Items Purchased (Globally)All classes of trade: big stores, little stores, hyper-markets, auto parts, drug stores
Basket Sizes
0%
2%
4%
6%
8%
10%
12%
14%
16%
18%
0 10 20 30 40 50 60Items Purchased – Supermarket scale
Shar
e of
Sho
ppin
g Tr
i ps
Mean ("average = 12")
Median (half = 5)
Mode (most = 1)
Retail & Shopper
Shopping Trip Length (minutes)
Spen
ding
Spe
ed ($
/min
ute)
$0.00
$2.00
$4.00
$6.00
$8.00
0 10 20 30 40 50 60
Quick Trippers Do More Spending . . . . . . Than Shopping!
Retail & Shopper
Retail & Shopper
1. Focus on the small basket
0.00%
0.25%
0.50%
0.75%
1.00%
0 500 1000 1500 2000 2500 3000
Rank of Single Items
Con
trib
utio
n of
Sin
gle
Item
s to
Tot
al S
ales
The L - O - N - G Tail
500 out of 32,000 items contribute
25% of total store sales
The BIG Head
Item Share (Count) for the Total Store
Retail & Shopper
3%
97%
Big HeadAll Others
Focus on the Few Products . . .
Think About Those few Items, NOT Categories
. . . that Sell the Best! (The BIG Head)
1,000 SKUs
#
By Count
33%
67%$
By Dollars
Retail & Shopper
Item Management . . .“Well, we have never been a category company – that was decided
long before I came . . . We look at it item by item. That doesn’t
mean we don’t have a fair representation with a category. But
usually it’s only the top five or six items in that category, and we
look at them as items!” $1 million per day in their top store!Charlie Burnett, COSTCO
Retail & Shopper
“If an item doesn't pull its weight in our stores, it goes away to
gangway for something else.” Trader Joe’s
“What's not to like? They're very good retailers [Trader Joe’s], and
we admire them a lot.” Jim Sinegal, co-founder CEO, COSTCO
2. Focus on the Few Products . . .. . . that Sell the Best! (The BIG Head)
300 items dominate total store sales.
30 items dominate total category sales
3 items dominate total brand sales
Typical household buys only 300 – 400 items per year!
Half of those, 150 – 200, they buy regularly.
Sell them what they are buying.
Retail & Shopper
Item Management . . .
“So our traffic is up, our sales are up. We’re in the 3% range right now over last year”
. . . March 2010, Drug Store NewsCharlie Burnett, COSTCO
Retail & Shopper
3. Two Options for Accelerating Sales of Items
Move the items to the shoppers –mostly by secondary placement
Focus on, and close on the items . . . wherever they are
Retail & Shopper
Call out the top sellersCall out the top sellers
No technology!!!No technology!!!
Retail & Shopper
Total grocery sales up 4% for the 1st quarter 2009 over 4th quarter 2008!!!
Total grocery sales up 4% for the 1st quarter 2009 over 4th quarter 2008!!!
Item Lift After “Top” SignCorona 16%
Angel Soft TP 67%Store Brand Butter 324%
Ice Cream 116%Retail & Shopper
For the Brand . . .
Retail & Shopper
For the Brand . . .
Retail & Shopper
Mid-Caps: End-Caps in the Aisle
23% lift plus halo effect!23% lift plus halo effect!
Retail & Shopper
Break-Through Tools
Graphic distinction (don’t add to clutter)
Top Seller - #1 (use social forces)
New (novelty minimizes “clutter filter”)
Price (communicates VALUE!)
“Personal” Shopping Assistant
Retail & Shopper
Retail & Shopper
“Personal Shopping Assistant(“Internet” in the Store?)
Retail & Shopper
“. . . an array of mobile devices . . . continue their
inexorable march from cellphone novelties to virtual
personal assistants.”USA Today, March 31, 2010
Retail & Shopper
The Convergence of Online, Mobile and Bricks-&-mortar (COMB)
Personal Selling Fundamentals
Determine what people want
Narrow their choices to a manageable few
Make the process easy– focus on selling the few
Upsell them on related items
Close as quickly as possible
Retail & Shopper
Retail & Shopperherb.sorensen@tnsglobal.com
Read the Views (and subscribe!
)
Read my RetailWire
blog!
Receive notices on
Twitter!
www.insidethemindof theshopper.com
Recommended