At the time of writing, “Black Friday” is still a week away, yet retailers have expanded the timeframe with many driving-related promotions earlier and earlier in November, which is now also being played out in the UK and broader European retail environments. To be fair, it’s become a new season in the retailers’ calendar and in the minds of consumers especially when you look at the US where over 130 million shoppers venture out over this last weekend of November.
With the continual disruption of space and assortment in retail stores, retailers have to evaluate whether their shop floor landscape can support these multiple promotional periods operationally and make the most of these opportunities financially. Some are mistaken into thinking this event is mainly for the online channel and do not necessarily provide the due diligence required to equip their physical store estate.
Three disciplines not to overlook:
1. As shopper trends have changed over time, so too have the expectations of the store.
Customers are shifting an element of their traditional spend on commodities to entertainment and experience related purchases. This has seen the traditional grocery store format having to re-evaluate its historical center store in order to make room for more enticing customer experiences in areas such as prepared foods and non-food category test and learn space. This requires greater planning and modeling of store layout, flow, look and feel. Traditionally this has been an expensive exercise in time and finances however opportunities to model store changes virtually before committing physically have drastically lowered the entry point for this incredibly important analysis.
2. As trading events increase in both frequency and length, together with competition from non-standard shelf space propositions, successful retailers have been challenging their historical allocations of space per category.
Given the pace with which shopper behavior and preferences have and continue to change, what has worked previously is not a sustainable strategy. Challenging historical norms to find the right balance between space provision for everyday commodities versus that for promotional/transient items/experience areas is critical for retailers. Optimizing category space supports a higher level of assortment optimization potential – why optimize category ranges into sub-optimal space!
3. Category curation is a discipline that is becoming very important in the age of big data.
Increased levels of shopper insight are vital in connecting with customers through the shelf and help differentiate from competitors. It starts with building category objectives that align with your most valuable customer segments. Then clustering at the category level in order to effectively inform the assortment optimization process and ensure that ranges are curated with the customer central to their foundation and cognizant of the space available in each store. Now your assortments are primed for efficient execution whereby floor and shelf layouts promote high item availability and include items that resonate with their highest yielding customers, those that it is critical to keep satisfied.
Despite the increasing inroads that the ecommerce channel is having on shoppers share of wallet, there is still a demand from many shoppers to experience physical stores. This requires retailers with physical store formats of all sizes to continually refine their proposition to shoppers and provide them with products, services, and experiences that give them a sustainable and compelling reason to come back through their doors without always relying on yet another manufactured retail event!