It's a game-changer to have the ability to adjust prices and promotions and to prioritize replenishment to get back in stock first on items customers want to buy most.
On any given Monday morning at grocery and retail companies around the globe, teams of merchants, operators and marketers sit with their financial and digital staffs to analyze the week that just happened. The initial discussion is simple and centers on whether the company met the expected numbers for sales, profits and market share.
From there, the conversation quickly turns to why and how.
Why were we down versus last year? Why did the promotional items drive incremental sales? How’d we perform on gross margin, shrink and labor? How’d we do regarding on-shelf availability? Why were out-of-stocks down from the prior week?
For companies that haven’t adopted the latest generation of technology for digital store solutions, incomplete, dubious and old data may not be able to answer these and related questions. In fact, the process may create even more questions.
But let’s step back a bit.
Every member of the retail team shares a common goal: To design and execute a go-to-market strategy that produces incremental profitable sales while growing market share and share of wallet. They’re tasked with growing loyal customers, meeting vendor/supplier agreements, and managing safe, sustainable and vibrant stores. That’s a full plate to be sure, and to be successful, each element and each member must execute with excellence.
A View of Every Aisle
Merchants start by curating an assortment that delights customers both in stores and online, fills baskets, drives profitable sales, and keeps them coming back. They strive to really understand their customers’ needs and how they shop — what they want, when they want it, how they want to purchase it, and what services they value most to keep them inspired and loyal. Much of the time, however, those merchants are making decisions with less-than-optimal information or with old and inaccurate data. This means that they begin the process of deconstructing the past at a tactical and strategic disadvantage and with a higher likelihood that their ability to accurately predict the future will be hampered. Instead, they need to use actionable data to understand why sales units were down compared with the previous year, why promotional items ended up in fewer baskets than forecasted and why the end cap items didn’t drive incremental sales.
But what if merchants, operators and marketers had a view of every aisle, in every store, across every hour of every day, in near real time? What if they could capture and analyze data as often as required in their effort to tailor their go-to-market strategy? Would it be a game-changer to have the ability to adjust prices and promotions and to prioritize replenishment to get back in stock first on items customers want to buy most?
Such a platform would enable those managers to definitively understand how long customers dwell in an area or aisle, and then guide them to their favorite culinary, seasonal or healthy items. It would reveal almost instantly any out-of-stocks, alerting the e-commerce system for in-store picking. It would quickly uncover the best places in the aisles to position promotional shippers, in addition to hundreds, if not thousands, of other in-store and online tactics.
Believe it or not, thesesolutions currently exist and are designed to deliver increased sales and basket size, improve promotion conversion, and help retailers leverage retail media to produce a tangible impact on the bottom line. Sales growth of 2% to 3% is common, as are profitability gains on promotions of 15% to 30%, due to the elimination of value destroyers. There are also typically 50% to 70% productivity gains on assortment-building or promo-planning activities.
Getting back to that Monday postmortem meeting, store and department managers, as well as headquarters merchandising teams, are incentivized to achieve set financial goals. The digitization of the retail aisle delivers the tools now needed to do just that.
About the Author
Suzy Monford is the founder and CEO of Food Sport International, which works with leading global brands, retailers/grocers and technology providers, and senior advisor for SES-Imagotag Vusion, a global provider of electronic shelf labels and IoT solutions for retail. Her career includes leadership roles at Kroger, PCC Community Markets, Andronico’s, Cheers Inc., Woolworths Supermarkets, Coles Supermarkets, Focal Systems and H-E-B. In these roles, Monford created and implemented go-to-market strategies for new e-commerce markets, led branding and marketing for fresh departments, and executed product development, digital merchandising and innovation growth strategies.