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Well stocked shelves and falling sales - a dilemma faced by many retailers today.

Posted:27 May 2014Write a comment

With ever increasing pressure on grocery sales, it’s no surprise there is a growing concern that clogged counters can sometimes result in suffocated sales – something which can be easily avoided.

Consider the discount app the new threat; a simple solution for spend savvy shoppers, pinging personalized promotions to the pockets of the masses. This, the latest technological advancement for the mobile motivators is why some consumers will never eat themselves out of house and home.

Retailers are finding it hard enough to survive, let alone thrive out there at the moment; channel and segment blurring make it a consumer world. The message is simple, have what you want, when you want it and at the price you want to pay – you can even have it delivered, yesterday.

The question is, at what cost?

In an effort to cut costs your regular grocer no longer stocks your favorite flavor –inconvenienced, you look online and find it elsewhere, cheaper. It arrives the next day and before you know it the supplier emails you with some suggestions, you buy a couple of those and get them delivered too. Suddenly your twice weekly visit to the store seems less necessary, which means fewer impulse sales for the retailer too.
By no surprise the store fails to recognize your private protest, little do they realize your peers are also experiencing the same problem. Before long their shelves are filling as fast as profits are falling.

Pushy promotions and pinched prices ensure that the impact of comparative grocery shopping is far greater than could have been predicted but cost cutting is not a cure.
The traditional approach to category management ensures that everything from assortments through planograms is handled in a generic manner, adding, deleting and spacing items strictly on a chain-wide view. This standard solution saddles stores with inventory they don’t need in the form of products that don’t perform, meanwhile missing items that would move well. Group strategy can only go so far, it is not a solution for a store-specific system.

For retailers to win they need to be more aware of their customers as individuals, who they are and what they want; the age old saying “Knowledge is power” has never been truer. Suddenly the impossible seems entirely imaginable as retailers gain the ability to go beyond basic intuition in order to make informed decisions about their customers shopping habits.

Imperative though these insights are the proof, as they say, is in the pudding. In this case, the proof lies in the ability to seamlessly integrate these insights with current business process whilst enhancing efficiencies moving forwards; helping to minimize capital expenses, reduce operational cost & raise profitability.

Category management must be handled with caution and careful consideration should be given to the selection of a suitable solution partner; particular attention should be paid to those who can accommodate individual business requirements. Opportunities should be given to those organizations with the ability to remain agile whilst retaining the determination to deliver. It is important to remember that customer centricity is a journey; it may not be achievable today, but with the right help it should be manageable tomorrow.

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