Most retailers natural instinct is to rely on what has traditionally worked for sales in the past. This reliance on history or past tradition is considerably the “Original sin” of retail that leads to the death of sales.
Relying on past sales execution experiences or following and adopting from the competition’s execution can actually create many false assumptions that are not a sustainable basis for a viable retail strategy.
Why you may ask is this not a viable retail strategy? Because today’s customer is deeply influenced by a dynamic retail environment. It doesn’t matter the nature of business you are in. Technology in the form of e-commerce, mobile payments, web-based solutions have permeated every sector of business from agri-business to zumba personal fitness classes.
Based on this exposure to technology and easy access to more personalized information, consumer behavior has radically transformed. Fact is, your customer is far more sophisticated, knowledgeable and in touch with their tastes, preferences and options than you are about what you are actually offering them.
Here are a few assumptions most retailers may be making and the truth as backed by data driven insights from leading retail strategies.
Retail Assumption: We must acquire new Customers in order to grow our business.
Data Insight: Loyal Customers need more love and investment than new Customers. Retaining loyal Customers and reducing churn among “opportunity” Customers can drive more growth than by acquiring new Customers.
Retail Assumption: Price-sensitive and ‘cherry picker’ Customers are not profitable. The competition is welcome to them.
Data Insight: Price-sensitive Customers are often more profitable than other segments because their basket mix includes more private label products or higher-margin portion sizes. Besides, even Affluent Customers are price-sensitive in some categories.
Retail Assumption: Customers are different in every part of the country / region / urban vs. suburban vs. country stores / format or banner.
- Customer segments are typically distributed variably within geographic regions or zones, but all Customer types exist in all stores.
- Store clusters built upon Customer dimensions are more useful to operations and execution than are store groupings based on geographic zones or volumetrics.
- Behavioral “buy-o-graphics” and intended trip missions matter much more than demographics or geographies.
Retail Assumption: Our loyal Customers are already giving us most of their spend in the categories we offer.
Data Insight: Expanding share of wallet from Customers who are already “loyal” can better optimize growth.
Other assumptions to be wary of include:
- Our weekly flyers and promotions always drive footfall and sales.
- After all these many years in the business, we know what Customers want.
This article was adopted from David Ciancos article on LinkedIn. To read the whole article please click on this link https://tinyurl.com/ycnq6wkw