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Tech Guest Viewpoint: How to Drive Grocery Sales in a Consumer World


By Kent Smith, Galleria RTS

Well-stocked shelves and falling sales is a dilemma faced by many retailers today. New technology advancements such as mobile discount apps are the latest threat to grocery retail sales. Many people simply complete their grocery shopping from the convenience of their own home.

Retailers are finding it hard enough to survive, let alone thrive with channel and segment blurring making it a consumer world. The message is simple: have what you want, when you want it and at the price you want to pay.

A Common Defense Practice

In an effort to compete and cut costs, a person’s regular grocer may suddenly no longer stock their favorite product--inconvenienced, they look online and find it elsewhere, cheaper. It arrives the next day, and in no time, the supplier emails additional suggestions that they purchase online as well. Suddenly, their twice weekly visit to the store seems less necessary, which means fewer impulse sales for the retailer as well.

By no surprise, the store fails to recognize the private protest. The retailer does not realize others are also experiencing the same problem. Before long their shelves are filling as fast as profits are falling. Pushy promotions and pinched prices ensure that the impact of comparative grocery shopping is far greater than could have been predicted, but cost cutting is not a cure.

Many retailers don’t realize exactly how different their stores perform. Diversity in people, technology, competition and other factors has grown massively and is forecasted to continue. This is due to the growing population, changes in income, lifestyle differences and other factors beyond existing tracking methods. To get a sense of how diverse a chain really is, retailers can quickly compare the selling mix and fixtures in a handful of stores.

Traditionally, retailers have found it easier to take on a one-size-fits-all approach to their merchandising strategy. However, shoppers today seek solutions that fit their needs; variety in every sense is immense across the store network. Different store, consumer and market conditions combine to produce product demand, sales volume and mix that vary greatly. This standard solution saddles stores with inventory they don’t need in the form of products that don’t perform, meanwhile missing items that would move well. Group strategy can only go so far. It is not a solution for a store-specific system.

How to Win Customers Back

For retailers to win, they need to be more aware of their customers as individuals: who they are and what they want. The age old saying “knowledge is power” has never been truer. Suddenly, the impossible seems entirely imaginable as retailers gain the ability to go beyond basic intuition in order to make informed decisions about their customers shopping habits. It’s imperative to remember that these insights are the proof, as they say, in the pudding. In this case, the proof lies in the ability to seamlessly integrate these insights with current business processes while enhancing efficiencies moving forward. This helps to minimize capital expenses, reduce operational cost and raise profitability.

Historically, many retailers have found transitioning to a store-specific strategy to be complicated. Many solutions simply did not measure up and some retailers made the attempt manually, only to generate mediocre results after a massive effort. Today, the stigma still looms. However, new generation retail and category optimization solutions are now available. They are quick and easy to deploy and significantly impact a retailer’s bottom line. Using these new tools, retailers have achieved merchandise plan compliance of more than 95 percent. Retailers that produce generic plans typically have compliance levels of only 40-50 percent.

Category management must be handled with caution and careful consideration must be given when selecting a suitable solution partner. Ensure the technology provider can accommodate individual business requirements and has the ability to remain agile while retaining the determination to deliver. It is important to remember that customer centricity is a journey; it may not be achievable today, but with the right help it should be manageable tomorrow.

Kent Smith is VP of Business Development & Consulting for Galleria RTS.

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