Latest Cannondale Study Suggests New Retailer Segmentation Approach
WILTON, Conn. -- As discount and drug stores add more space for food and supermarkets add more nonfood sections, retailers have moved to the muddled middle and shoppers no longer distinguish retailers along channel lines, according to a new study from Cannondale Associates here, "Redefining the Retail Landscape." The study, produced in conjunction with panel provider Lightspeed Research, finds that shoppers choose where to shop based on a retailer's ability to deliver what they're looking for, whether it's the lowest prices, bulk sizes, or unique products.
The study presents a shopper-based approach to segmenting retailers and identifies actions to differentiate the retailer segments. Cannondale studied over 5,000 shoppers at more than 1,100 retail banners to understand their shopping behaviors and attitudes.
From Cannondale's shopper-based retailer segmentation approach, four distinct retailer segments emerged, each with key points of differentiation based on behavioral and attitudinal strengths and challenges. Those segments are as follows:
1. Routine Replenishment, whose shoppers make frequent trips and like the shopper card program, store services, and wide/consistent selection
2. Big Shops, whose shoppers spend a lot per trip and like the bulk products
3. Experience Makers, whose shoppers spend less time shopping, but like the unique products
4. Quick Shops, whose shoppers spend the least time and money, but go there because it's quick to get in and out of the store
Don Stuart, managing director at Cannondale, explained the benefits of the new segmentation approach: "It's all about creating a destination with differentiation. If retailers can't demonstrate distinct meaningful benefits to shoppers, then they lose their reason for being. Now, with a clearly defined retailer segmentation approach, manufacturers can help retailers in developing a unique selling proposition."
The retailer segments differ from traditional channel groupings because seemingly dissimilar retailers often fall into the same group, according to Cannondale. For example, Target is generally considered a mass store, but it appears with Trader Joe's, Whole Foods, and CVS in the Experience Maker segment, while Stop & Shop is grouped with Wal-Mart and Costco in the Big Shops segment. Similarly, Rite Aid is grouped with 7-Eleven and Dollar Tree in the Quick Shops section, because all of these shoppers are focused on getting shoppers being able to get in and out of the store as quickly as possible.
Cannondale Associates is a leading sales and marketing management consulting firm with offices in Wilton, Conn. and Evanston, Ill. Lightspeed Research is one of the world's leading online market research solution providers with offices in North America, Europe, and Asia Pacific.
To read more about the new Cannondale study, read "Changing Channels" from the April 15 issue of Progressive Grocer. To read the online version, visit http://www.progressivegrocer.com/progressivegrocer/firc_new/search/article_display.jsp?vnu_content_id=1002343437.
The study presents a shopper-based approach to segmenting retailers and identifies actions to differentiate the retailer segments. Cannondale studied over 5,000 shoppers at more than 1,100 retail banners to understand their shopping behaviors and attitudes.
From Cannondale's shopper-based retailer segmentation approach, four distinct retailer segments emerged, each with key points of differentiation based on behavioral and attitudinal strengths and challenges. Those segments are as follows:
1. Routine Replenishment, whose shoppers make frequent trips and like the shopper card program, store services, and wide/consistent selection
2. Big Shops, whose shoppers spend a lot per trip and like the bulk products
3. Experience Makers, whose shoppers spend less time shopping, but like the unique products
4. Quick Shops, whose shoppers spend the least time and money, but go there because it's quick to get in and out of the store
Don Stuart, managing director at Cannondale, explained the benefits of the new segmentation approach: "It's all about creating a destination with differentiation. If retailers can't demonstrate distinct meaningful benefits to shoppers, then they lose their reason for being. Now, with a clearly defined retailer segmentation approach, manufacturers can help retailers in developing a unique selling proposition."
The retailer segments differ from traditional channel groupings because seemingly dissimilar retailers often fall into the same group, according to Cannondale. For example, Target is generally considered a mass store, but it appears with Trader Joe's, Whole Foods, and CVS in the Experience Maker segment, while Stop & Shop is grouped with Wal-Mart and Costco in the Big Shops segment. Similarly, Rite Aid is grouped with 7-Eleven and Dollar Tree in the Quick Shops section, because all of these shoppers are focused on getting shoppers being able to get in and out of the store as quickly as possible.
Cannondale Associates is a leading sales and marketing management consulting firm with offices in Wilton, Conn. and Evanston, Ill. Lightspeed Research is one of the world's leading online market research solution providers with offices in North America, Europe, and Asia Pacific.
To read more about the new Cannondale study, read "Changing Channels" from the April 15 issue of Progressive Grocer. To read the online version, visit http://www.progressivegrocer.com/progressivegrocer/firc_new/search/article_display.jsp?vnu_content_id=1002343437.