While local shops should market themselves as being good for their local communities, they also need to think about how to make a profit. Consider the following two propositions.
Where is the real money made in supermarkets? In the middle of the store, where processed foods and well-known brands reign supreme, says Fortune magazine in its profile of US firm JM Smucker.
“Our strategy is to own and market No. 1 brands, sold in the centre of the store, in North America,” says co-chief executive Richard Smucker.
Where do you go to buy real food? The peripheries, says Michael Pollan in his Food Rules – and “stay out of the middle.”
“Processed foods dominate the centre aisles of the store, while the cases of mostly fresh food line the walls,” he writes.
If we assume that supermarkets are designed to generate profits from all parts of the store, how do these rules translate into how you have organised your shop? If your layout is designed so that people can dip in and buy milk quickly, how much profit are you surrendering? Is it a good idea to interrupt people shopping the peripheries with high margin processed items?
Christine
12/08/2010
How spooky, we are just looking into this now and working out how our 7 different types of customers use the store & how we can get them to spend more from better layout.
Any further information or handy hints you can give me, would be very very grateful.
Thank you
Nick Shanagher
12/08/2010
This sounds really interesting and it would be good to know more about how you ended up with seven types of shoppers.
If you are going to trial new systems, it may be worth picking on one shopper type and testing what works first.
I will have a blog up shortly on some work in America that gets retailers to think about how substitutable products are, which means that you need to protect the must have stock keeping units on shoppers lists and cull the nice to have SKUs (where shoppers will take an alternative and preserve their basket spend with you.)
Christine
13/08/2010
Interesting, we stock a few lines that are nice SKUs but they are a key product that not many places stock (ie supermarket in customer minds), which improves our relationship with the customer, “I knew you would have it….” improving the perception of our convience not just by location but product range. The question is at what price?