BrainTrust Query: Forget New Shoppers. Talk to Best Customers
Through a special arrangement, presented here for discussion is a summary of a current article from the Mark Heckman Consulting blog.
I still maintain that retailers spend much too much time, money and newsprint chasing new and highly unsustainable shoppers. At the least, stores should make sure such efforts are not alienating their best existing customers. Let’s start with the weekly circular.
There are ways and means to use the circular to better understand who is using it and buying from it. More important is answering, "How are the best and most profitable customers using (or not using) the weekly ad"?
Here are five quick questions that can be answered through some pretty basic database queries:
- What percent of best shoppers purchase from the front page of the circular?
- How do VIP shopper basket sizes differ from best shoppers who do did not purchase from the front page? How do they differ from other shopper groups that did or did not make a purchase from the front page?
- Which items, over time, resonate best with top shoppers, more casual shoppers, and the ultra price sensitive that shop predominantly for specials and deals?
- For more advance applications and segmentation practices, which deals are more apt to be purchased by social media community shoppers?
- By store type or geographic segment, which items attract a larger percentage of shoppers and what are the associated weekly sales by store segment and geography with various combinations of front page items?
Armed with this basic intelligence, circular ads can be a great learning tool for making offers more efficient and strategic. Purchase indices can be quickly calculated to help merchandising understand which items and item combinations are more attractive to the each shopper segment.
Now, back to VIP shoppers. Most supermarket retailers report that even the very best shoppers are only sourcing about 65 percent of their grocery requirements from their favorite store.
If you happen to be that favorite store, you know two things for sure.
First, these shoppers like you better than anyone else (at least at this point) and are very familiar with your store(s).
Second, there is still much more potential business available from these households. Using circular ad analysis to better target VIP shopper segments is pretty basic stuff. But it works and allows you to draw even more ROI out of your ad program by using the data to refine future ad combinations and versions, designed to build basket size with your very best shoppers.
Discussion Questions: Do you think most retailers are currently aligning store circulars to their VIP shopper base? Where do you see opportunities to use analysis to improve the effectiveness of retail circulars?