22 Jul Competitive Pricing for Retail Success
Competitive pricing for retail success
Competitive pricing is but one key to retail success
How long have you been operating a retail store? Are you working to open your first retail location? The science of retail shopping is fascinating and should be studied by veteran retailers, along with those looking to start a new retail bricks ‘n mortar business. The mind of the casual retail shopper experiences several emotional sensations throughout the shopping experience that can make or break retailer success. There have been countless, in-depth retail studies showing how the average person reacts emotionally to retail store layouts, merchandising, and product pricing.
Walk through any retail big box store and, whether you realize it or not, your experience has been well thought out through the science of retail merchandising. Aisle layout, product placement, merchandise displays, and overall color schemes are carefully designed. There are consulting firms that specialize in watching shoppers shop, and they do this with the intent to pass critical buyer information to the marketing department of large retail chain stores. These retail consultant firms watch shoppers browse; they track how many times shoppers read labels; and they record just about every customer move within a store. Talk about big brother!
Here are a few of the most enlightening metrics tracked when shoppers are analyzed:
- Amount of time spent reading labels
- Ratio of generic products purchased versus name brand
- Average time spent within store entry and exit areas
- Is signage being read?
- What signs are attracting the most attention?
- Upon entering a store, which direction/path are shoppers drawn to?
- Ratio of window shoppers versus successful sales transactions
- Average number of shoppers per day
- Average dollar figures of impulse products sold during checkout process
There are literally hundreds of different ways to analyze customer actions and activity within a retail store. A good starting place for retailers who are interested in retail science would be a book titled “Why We Buy: The Science of Shopping” by Paco Underhill. Underhill, and his consulting firm Envirosell, have observed over 900 aspects of interactions between shoppers and store merchandising. Mr. Underhill’s book provides detailed information that can quickly be translated into increased revenue for any retail establishment– small or large.
Retail consumer data is important because decisions relating to store design/layout, merchandising and product pricing can have a huge impact on retailer success. With careful planning and thought, retailers will realize quicker product sell-throughs, higher average register transactions, and an overall increase of customer loyalty.
A successful retail operator should fully understand the emotional aspects of each and every retail transaction. Researching all aspects of retail business operations will directly increase bottom line profits.
If you desire to know more about the shoppers mind, I wholeheartedly recommend picking up a copy of Why We Buy: The Science of Shopping.
Rob Cyr, author of The Liquidators Guide, is an expert in the area of product sourcing and retail operations. His work has been featured on countless industry websites including the Fox Small Business network, TopTenWholesale.com, Apparelsearch.com, and other sites. You can read more about liquidation best practices at his site Liquidator’s Guide.