Numbers always paint pictures in our minds, and the pictures painted by scan data from retail sales is a thing of rare beauty. (Retailer loyalty scheme data is even richer, but we’ll leave that for another day).
Scan data is a record directly from the cash tills in the store, and when shared widely and quickly, provides analysts the world over with the detail needed to understand changes in shopper behaviour and make changes to product displays and merchandising to harness these behavioural changes and evolve sales.
It won’t be news to anyone that while 12 months ago a shopper wandering around a mall would have ended up with a handful of shopping bags, with different logos and containing many impulse purchases, now we shop with a list and a purpose. The climate has made us feel both time poor and cash poor, even if really we are neither.
With new focus on budgets and cost control, shoppers have changed their old habits, including the way they walk around a store. They no longer meander through store or mall, instead they shop fast, stick to a list, and do so with a very clear purpose. This trend is feeding growth in retail via “category creep”, from confectionery in pharmacies to movies in phone shops.
Our shopping list today stops us spoiling ourselves, and lets us do the best we can for those we are shopping for – greater quality, less quantity.
Basket sizes have shrunk, even though average cost per item may have grown. And going one step further, if you were to follow shoppers via GPS you’d find they are visiting fewer stores, but spending more time in each one. In fact our time in our favourite stores is growing. Why?
In the face of actual job losses and fear around job losses, we have grown to be more disciplined in our spending. We’ve all sat down and re-learnt the art of financial planning in different parts of our lives. When it comes to shopping, our “financial plan” is a shopping list. Whether in grocery, technology, pharmacy or automotive, we are entering the shopping environment with a pre-researched list.
We’re writing weekly menus again and shopping only for the ingredients in those meals.
We aren’t taking weekend drives around car dealerships with a wide price band to see what’s out there, but instead writing a list of new and demonstration models available at specific dealerships.
But, despite all this discipline, we’re seeing a category creep. Customers are buying things in places that they previously wouldn’t have.
This is a result of retail marketers looking at the numbers, spotting the trends and reacting with merchandising in store to help us accelerate along the journey we’ve already begun. Time poor and cash poor customers will be more inclined to buy in the one store, the store they are in and that they trust.
A shopper might go to the pharmacist each week for a script, thinking “let me buy my sugary snack at 10am while I’m here – it will save me a walk to the newsagent, where I would inevitably buy a magazine I don’t really need”.
Similarly in phone stores, consumers can download movies while they’re there, saving a trip to the DVD hire store and the inevitable up-sell of more movies and confectionary.
More and more manufacturers and retailers are shifting their offering into adjacent, usually lower value, impulse categories, to help us “linger longer” and spend more.
My Dad is always fond of telling me that where there is change, there is opportunity. Right now we’re in the early days of the most fundamental social, economic and political change in a decade. Watching the numbers, spotting the emerging trends and then riding the wave will be prove very successful for retailers and brands that invest time in reading the signs.
In his role as CEO of CROSSMARK, Kevin Moore looks at the world of retailing from grocery to pharmacy, bottle shops to car dealers, corner store to department stores. In this insightful blog, Kevin covers retail news, ideas, companies and emerging opportunities in Australia, NZ, the US and Europe. His international career in sales and marketing has seen him responsible for business in over 40 countries, which has earned him grey hair and a wealth of expertise in international retailers and brands. CROSSMARK Asia Pacific is Australasia’s largest provider of retail marketing services, consulting to and servicing some of Australasia’s biggest retailers and manufacturers.
Click here for more Retail Trends blogs.
Smart Company is the leading online publication in Australia for free news, information and resources catering to Australia’s entrepreneurs, small and medium business owners and business managers.
Comments