Wednesday, June 10, 2009

Summer Reading For Retailers

Before you pick up another James Patterson novel for your summer read, grab a book that could boost your profitability before Labor Day. Herb Sorensen’s Inside the Mind of the Shopper: The Science of Retailing examines decades of market research to show how you can drive shopper behavior to boost sales in your stores.

Sorensen is the founder and global scientific director for TNS Sorensen, a market research company whose retail partners include Wal-Mart, Target, Best Buy, and Home Depot, along with a wide range of supermarkets, convenience stores, and drug stores. Among the company’s services and research methods is an offering called PathTracker, a technology that helps retailers understand in-store customer behavior to improve merchandizing and sales opportunities.

PathTracker is an electronic customer tracking system that records the coordinates of shoppers from the time they enter a store until checkout. The system employs RFID technology in large-format stores that have carts or baskets; in smaller stores or specific areas within a store, it uses digital video technology. Sorensen staffers then use the PathTracker Tool Suite to integrate the large volume of customer behavioral data with store sales data to produce a chart- and graph-laden report that suggests how to optimize store real estate.

Sorensen believes time is literally money for retailers, writing, “Across many studies, I have found a basic principle: The faster you close sales — the less time wasted for the shopper — the more sales you will make. In fact, when we charted this effect across a series of typical stores, we found that the efficiency of the shopping trip was directly related to overall store sales.”

There is a lot of practical advice you can instantly apply. Here are five observations and tips from Sorensen’s book to help retailers drive sales.

1. Top-selling items — your top 5% — have the greatest potential for increased sales.
2. Tell shoppers exactly what those top-selling items are — like Amazon does.
3. Put top-selling items on high-traffic pathways convenient to the shopper.
4. Blizzards of tagged special offers are not really offers at all, just noisy clutter.
5. Use reduced pricing very selectively, and prominently, to convey the value message.

1 comment:

  1. John, Mike Landfair just commented about your blog at Home Accents Today's The Landfair Retail Focus:
    http://www.homeaccentstoday.com/blog/1960000396/post/1730046373.html

    ReplyDelete