RETAIL SALES
Retail sales refer to the purchase of goods and services by customers.
Or, as defined by Investopedia, it “tracks consumer demand for finished goods by measuring the purchases of durable and non-durable goods over a defined period of time”.
WHAT IS RETAIL SALES?
In simple terms, Retail Sales refers to the purchase of goods and services by customers. Or, as Investopedia defines it, it “tracks consumer demand for finished goods.”
It does this by measuring purchases of durable and non-durable goods over a set period.
While consumer durables are goods that last more than three years, non-durables last for less.
Any mention of retail sales concerns the economic activity of your retail business. A drop in monthly sales or flat growth shows something is wrong in your store. Any increase shows your store is healthy.
Fortunately, there are many different actions you can take to improve your chances of retail success. More importantly, there are many measures you can put in place so that you can increase your in-store sales.
WHAT CAN RETAILERS DO TO INCREASE THEIR RETAIL SALES?
We’ve identified seven sub-sections that you, as a retailer, can use.
They can help you increase your in-store retail sales. For each sub-section, we’ll explain what you can do to achieve success.
1. USE MARKET AND CUSTOMER LOYALTY DATA APPROPRIATELY
As we mentioned on our category management blog, market data, also called syndicated data, is vital for retailer success. That’s because you can use it to increase your in-store sales.
With it, you can conduct a gap analysis.
It compares your actual performance to what you could achieve if you optimised everything.
You can apply it to any part of your business. For example, you could review your product assortment. Check if your range fits your target market.
You can also use this data to track market growth trends.
This helps you spot changes in specific brands, categories, or sub-categories. On top of that, you could monitor the spending power of your customers and then match it up to the appropriate product range.
With syndicated data, you can see your place in the market. You can also compare yourself to your competition.
While market data lets you track your retail business progress, customer loyalty data helps you know customers personally.
Let us explain:
For one, with customer loyalty data at your fingertips, you can monitor shopping habits. Are your customers shopping by brand, sub-category, or price? Are they brand loyal? How often are they purchasing a product over a given period?
Also, when are your customers shopping? How often are they visiting your store? Are they spending more during mid-month shops or month-end shops?
You can also add basket analysis to the mix. This technique helps you understand customer buying behaviour. Use it to choose the right products for your store.
ARE YOU STRUGGLING TO MEET CONSUMER DEMAND CONSISTENTLY?
2. SELECT THE APPROPRIATE RETAIL STRATEGY FOR YOUR STORES
The retail world keeps changing, so you must find ways to stay ahead of your competition. Fortunately, you can do that by meeting the needs and wants of your customers.
But how do you meet their needs? That’s where an appropriate retail strategy can play its part. Since they aim to grow your market share, they drive your success.
They also increase sales, ROI, and customer traffic.
They also improve your profitability.
Here are a handful of ways you can improve your retail strategy:
1. GET YOUR DATA IN ORDER
Data is the lifeblood of any retailer. And there are generally three types of data that you should begin with.
They are:
– Market data;
– Customer Loyalty data; and
– Sales data.
2. UNDERSTAND BUYER PERSONAS
If you want to create a strategy to increase your retail sales, you won’t get far if you don’t know who your customers are or what they buy.
You can get ahead by catering to your various shopper personas.
3. LOCALISE YOUR PRODUCT ASSORTMENTS
Matching your products to your customers isn’t only a recommendation. It’s a necessity. As we mentioned earlier, if you give customers the right product at the right time and price, you get more sales.
It also results in repeat customers and allows you the opportunity to build customer loyalty.
Specialist assortment optimisation software can go a long way to helping you here.
4. USE IN-STORE MARKETING
While we’ll delve into this topic in more detail later on, it’s worth touching on it now, too. In this instance, it’s all about thinking and planning how you are going to communicate with a shopper who walks into your store.
Many shoppers enter your store thinking they know what they want.
Still, you can entice and influence them to buy more than they planned.
5. IMPROVE YOUR SPACE PLANNING
The way you set up your store and display your products affects customer experience and your bottom line.
By focusing on a customer-friendly layout, shoppers can find what they’re looking for quickly and easily.
3. PLACE RETAIL MARKETING ON YOUR LIST OF THINGS TO DO
When talk turns to retail marketing, the conversation should always focus on traditional and digital media. It should also cover new media and in-store marketing channels.
There are, of course, different actions you can take depending on which marketing channel you choose.
If you want a better chance at increasing your in-store sales, we would recommend you attempt all three.
For example, for a traditional marketing campaign, you can advertise in newspapers, on TV, radio and on billboards. It would work well if you have a specific target market. They should live in areas without access to non-traditional marketing.
On that, we recommend that you collaborate with suppliers as much as possible. The reason is simple: advertising can be expensive, and spreading the costs will help your budget. It will also lead to a well-funded group advertising effort. This means you can do more than if you fund it yourself.
By collaborating with suppliers, you’re giving them a stake in how a product is advertised and presented to shoppers. When a supplier or any other third party has a stake in the overall success of a category or store, they’ll place more effort into it.
Then you could also add in a touch of public relations and get involved with school outreaches or sponsor various sporting events.
On the digital and new media marketing side of things, you could market lines frequently bought by loyalty cardholders. Or, send emails and SMSes to your loyal customers informing them of new deals or products complementary to their recent buys.
Social media is just as effective a channel when used correctly and can give you direct access to your customers.
You can also consider geo-targeting – determining the geolocation of your website visitors and delivering appropriate content. When approached properly, it can lead to an increase in foot traffic. That’s especially if you are using this to advertise promotions and other offers online.
Meanwhile, if you want to take your marketing in-store, there are many ways to do that. You could consider offering tasters and free samples of new products, host in-store competitions, and hand out gifts to customers at your checkout as a reward for spending more.
That’s over and above your in-store signage that should be visible and help direct your customers through your store. You must position the content in your store to add value to the buyer’s journey via product information, product sourcing information, promotions, and so on.
4. INVEST IN CATEGORY MANAGEMENT SOFTWARE
If you’re a retailer who is serious about their business, category management is a must. That’s because of its aim – to obtain long-term improvements in the efficiencies of your retail business.
And, when done correctly, it leads to a better shopping environment, which allows you to strengthen your relationship with customers and increase your retail sales.
1. USE DATA-DRIVEN PLANOGRAMS
One of the many tools found within a category management solution that can help you to improve your business is the planogram. You can read more about them here. Suffice to say, the end goal is to increase both your sales and profitability.
Here’s how:
Planograms allow you to place your products in the correct position on your shelf. By flushing data into your planograms, you can also give them the space they deserve. For example, if a product sells consistently over a period, you’d allocate more space on the shelf. Likewise, if a product sells poorly, you can reduce its space.
Besides increasing the opportunity for more sales, you can face fewer out of stock scenarios and prevent unnecessary overstocking.
On top of that, they ensure that your products are merchandising correctly. And that’s not just for one store. After creating a planogram at your Head Office, you can send it to all of your stores to ensure that they all merchandise the product category consistently.
2. USE ASSORTMENT PLANNING SOFTWARE
While planograms allow you to present your products to your customers, you first need to choose the right items to stock. That’s where assortment planning comes in; it allows you to provide a consistent product offering.
The result of offering the right mix of products is an increase in your sales and profitability. But there is more to it. Alongside more sales, you’re again able to create a shopping environment that customers will want to return to, thereby improving customer loyalty.
You can also look to range the top-performing lines in the market. Just keep your target market in mind when doing this. What sells well in a competitor’s store might not sell well in yours, and the last thing you want to do is range a product that ends up sitting on the shelf.
When considering which products to stock, you should always range according to your space constraints. That ensures that you provide your top-performing lines sufficient space to grow and give you a good return on your investment.
3. USE VARIOUS MERCHANDISING STRATEGIES AND TECHNIQUES
There are many different merchandising strategies and techniques that you can use to increase the chances of making more sales and profit. After all, these strategies aim to help you create a visually appealing display of products that entice shoppers to purchase more items.
More than that, you can use specific merchandising techniques to please your customers.
Take cross-merchandising as an example. By merchandising products often bought together nearby each other, such as Coffee cups in your coffee aisle or Spreads besides your Bakery department, you’re offering your customers a comfortable shopping experience.
Another option is to include impulse lines at your checkout counters, and promotion lines on your gondola ends and side panels. You can use vertical merchandising to increase product exposure across multiple shelves while brand blocking and including colour breaks make for an attractive looking shelf.
You can also include various cross-selling and upselling techniques to complement the merchandising strategies you’ve chosen.
5. DON’T NEGLECT YOUR CUSTOMER SERVICE LEVELS
While the type of customer service you offer depends largely on the products you sell, there is no two ways about this fact: you can’t neglect it if you want long-term success.
Below are a few customer service-related aspects to address.
1. ENGAGE WITH YOUR CUSTOMERS THROUGH A LOYALTY CARD PROGRAMME
Loyalty card programmes are the perfect opportunity for you to show your appreciation for any shopper who purchases products in your stores. Loyalty points redeemed as cash can quite easily result in customers returning to spend more.
You could even team up with other non-retail companies. For example, a loyal customer could present their loyalty card at a petrol station when filling up, at the gym or elsewhere for bonus points. All of this creates a feeling of goodwill and motivates shoppers to apply for a card and use it.
The bonus is the data that you can accumulate. With this data, you can improve your product assortment to meet the needs of your customers.
2. CREATE SHOPPER-FRIENDLY RETURN AND GUARANTEE POLICIES
As much as a loyalty card programme is worth introducing, you can’t leave it at that. You must introduce return and guarantee policies that are shopper-friendly.
But what would that look like? And how would it lead to more sales for your store? Simple: if a customer feels that their interests are protected, they are more likely to return to your store and buy more. There is also the point that impulse buying happens when customers feel at ease.
For example, you could include a Double Your Money Back guarantee for house brands, extend repair warranties and propose a cheapest price guarantee to match or beat the price of your competitors.
You could also include a guarantee policy around scanned products on the shelf, which states that if the price on the shelf edge label doesn’t match the price when scanned, the first item is either free or at a reduced cost.
While controversial, you need to view this and other policies as opportunities to create repeat customers. Sometimes that includes accepting a loss now and then.
3. INCLUDE ADDITIONAL STORE POLICIES THAT ARE CUSTOMER-FIRST
Besides return or guarantee policies, there are many store policies or procedures that you can implement. And all will have a direct impact on your sales. As a side note, these store procedures should complement the above policies rather than stand-alone.
A few such policies include:
– Placing a staff member at your store entrance to greet customers (and direct if necessary);
– Having proper security in-store;
– Ensuring your store is clean and ordered neatly at all times;
– Leaving a space when a product is out of stock and include a sign apologising to customers;
– Allowing your customers to opt for ‘rain cheque’ if a promotional product is out of stock;
– Pricing all of your products correctly on the shelf;
– Training your staff to be able to answer customer questions; and
– Ensuring there are never more than three customers in a queue before opening another till point.
4. PROVIDE STAFF TRAINING
If you want to progress as a retail business, it’s not enough for you to know how to improve it. After all, a retail business is more than one person. If you want to see success, you need to invest in your staff through specific training.
Of course, when investing in retail training, you do first need to ask yourself if you are going to keep it in-house or outsource it.
If you want to keep it in-house, here are a few steps to follow:
– Conduct a training needs analysis;
– Pick your learning outcomes; and
– Design or source training that will fit your outcomes.
On the other hand, if you plan on outsourcing it, you can tap into the necessary experience and save yourself both time and money that you can invest elsewhere in your business.
Regardless of which route you take, it will help you offer a better overall service to your customers. It will also allow you to build a reputation as a go-to retailer.
6. ENSURE BRAND AND STORE DESIGN CONSISTENCY
While a retailer needs to provide training to their team, it’s just as crucial for you to do the same for your employees.
Of course, the training you offer your staff will differ considerably from the training a retailer offers theirs. But, if you approach it correctly and choose the right type of training, it will improve your chances of long-term success.
For example, if you want to become a category captain, retail training can assist you. Likewise, training can help you provide better advice and strengthen any relationship with a retailer.
But what type of training do you require? It all comes down to who your staff are and what function they perform.
We can divide your staff into three types: your account managers, your merchandisers and field marketers, and your promotions staff.
1. RETAIL TRAINING FOR YOUR ACCOUNT MANAGERS
Your account managers are those who interact with the retailer and senior decision-makers directly. For that reason, they need training that is focused more on the inner workings of the retail environment rather than customer experience or customer service.
Such training could include both a basic foundation in retail and in-depth training to service the account correctly.
A necessary foundation in retail would allow your account managers to understand how to manage stock carefully, the critical merchandising principles and the effect that the 4P’s of marketing have on retail. Essentially, you are setting them up.
Once they have the basics down, it’s time to offer them in-depth training. Best practice is to first work on the account before you look for a training course. The reasoning behind taking that route is your account managers can first determine the gaps to fill before finding a course that will allow them to do that.
Also, once you understand the role that you want to take as a supplier, you’re better positioned to help a retailer to improve their sales and profits for the category.
For example, if you want to become a category captain, you would enroll your account manager in a course that covers this topic in detail. If you’re looking to offer data analysis instead, you will search for a data-specific retail course.
2. RETAIL TRAINING FOR YOUR MERCHANDISERS AND FIELD MARKETERS
While your account managers are usually stationed at Head Office, your merchandisers and field marketers are positioned on the store floor. Thus, any training you offer should be store-focused.
For your merchandisers, this includes teaching them how to recognise low stock levels and how vertical merchandising works. That would be over and above training on how to pack shelves correctly (and read planograms).
Meanwhile, for your field marketers, you could offer them training on how to audit a shelf or how to implement a planogram in-store. Since they visit multiple stores to check compliance – effectively making them your eyes in-store – you should offer them planogram training so they can spot a poorly implemented one.
Alongside this training, you should also provide a practical side. This side would deal with any specific scenarios that a merchandiser or field marketer would encounter during their workday.
For example, a store manager might not allow a field marketer to audit a shelf. What do they do then? You’d need to provide them with training that can equip them with the right skills to deal with such a situation.
3. RETAIL TRAINING FOR YOUR PROMOTIONAL STAFF
Similar to your merchandisers and field marketers, your promotional staff are in-store. However, unlike merchandisers who only have to deal with product placement, the nature of promotional work puts your promotional staff face-to-face with shoppers.
Thus, any training you offer them must be customer service-focused. It must include a communication aspect since your promotional staff can also act as brand ambassadors, and any interaction with them affects how a customer views your brand. And, since they’re selling a brand, the training must be product-specific.
One way of doing that is to supplement any instructions with role-playing within a retail environment. For example, you could set up an everyday retail scenario where you have a ‘customer’ asking questions. Or, you could have customers walk past the promotional stand, and your staff would need to entice them to stop and listen to them.
You cannot underestimate the importance of role-playing. By setting up such scenarios regularly, you’re equipping your promotional staff with the necessary knowledge to know how to assist real shoppers in a real-life situation.
STRUGGLING TO MEET CONSUMER DEMAND CONSISTENTLY?
