tackling grocery challenges with customer analytics

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FOR GROCERS, BIG ANSWERS BRING BIG RESULTS Addressing today’s challenges with customer analytics.

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Few retail categories are facing as much disruption as the grocery industry is right now. Buxton’s Grocery 2013 report provides an overview of the significant challenges facing grocery operators today – and how customer analytics can not only confront those challenges, but turn them into opportunities to increase market share. In this report we discuss: • Quantifying competitive impacts by measuring market share at the store level • Winning the loyalty of the customer by knowing the customer • Rolling out new concepts with confidence – from smaller stores to new markets • Promoting private label goods on a crowed shelf (keeping the right product in the right trade area) • Integrating online grocery shopping and the real estate implications

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Page 1: Tackling Grocery Challenges With Customer Analytics

F O R G R O C E R S,

BIG ANSWERS B R I N G

BIG RESULTSAddressing today’s challenges with customer analytics.

Page 2: Tackling Grocery Challenges With Customer Analytics

F O R T H E G R O C E R Y I N D U S T R Y, T H I S I S A N E R A O F

BIG CHANGES AND CHALLENGES Over the past decade, Buxton has helped some of the nation’s top grocers tackle the big issues they face.

Buxton is a BIG ANSWERS company. We tell you WHO your best customers are, WHERE more of your best customers can be found, and what the VALUE of those customers is to your business.

We deliver these BIG ANSWERS in an easy-to-understand, easy-to-implement manner so that you make smarter real estate, market-ing, merchandising and online grocery shopping decisions.

Page 3: Tackling Grocery Challenges With Customer Analytics

challenge No. 1:

COMPET I T ION ISINTENSIFYING

COMPETITION HAS ALWAYS BEEN FIERCE. But today, it’s coming from more directions than ever as convenience stores, drug stores, dollar stores, club stores and other retailers vie for their slice of the grocery pie. How can you pinpoint your best areas for opportunity? Where are you performing well, and where do you have room for improvement?

Page 4: Tackling Grocery Challenges With Customer Analytics

the big answer:

K N O W T H E

SCOREIn order to improve, you first must know exactly where you stand – your strengths, your weaknesses and your most promising areas for improvement.

THROUGH AN ALLIANCE WITH VISA®

, Buxton can provide you with a wealth of data on markets, customers and spending habits. Our Market Share Report allows you to:

Clearly see your MARKET SHARE in any given market – down to the store level.

EVALUATE PERFORMANCE over the past four quarters, so you can see exactly how the needle is moving, market-by-market, store-by-store.

Proactively identify stores that are losing market share and DEVELOP MARKETING AND MERCHANDISING STRATEGIES to turn them around.

Page 5: Tackling Grocery Challenges With Customer Analytics

BUXTON’S PROJECTIONSFOR U.S. STORE GROWTH WERE USED WHENTHE FRESH MARKET FILED FOR THEIR INITIAL PUBLIC OFFERING (IPO).

when THE FRESH MARKET started working with Buxton, they needed to know their U.S. potential for store growth.

Page 6: Tackling Grocery Challenges With Customer Analytics

challenge No. 2:

BUILDING CUSTOMER

LOYALTYTODAY, IT’S COMMON FOR CONSUMERS TO VISIT MULTIPLE GROCERY DESTINATIONS as they seek out the value, variety, quality and convenience they want. Studies indicate that customers would like to have fewer destinations. How do you fill this demand– and get a bigger share of their grocery dollar in the process?

Page 7: Tackling Grocery Challenges With Customer Analytics

the big answer:

KNOW YOURCUSTOMER

Getting to know your customers is the single most important step in growing your business. And the best way to do this is by enriching your customer data.

THROUGH AN ALLIANCE WITH VISA®

, Buxton takes you beyond the limits of loyalty card and survey data, and shows you a detailed picture of who your customers are and where they live – giving you a rock-solid foundation for your real estate strategy.

Understand WHO YOUR CUSTOMERS ARE and how far they are willing to drive or walk to shop at your stores.

UTILIZE PREDICTIVE MODELS for real estate growth strategies– pinpoint where your best customers live and open new stores where large concentrations of those customers are located.

TARGET YOUR MARKETING EFFORTS with tailored messages that make stronger appeals to your audience.

Page 8: Tackling Grocery Challenges With Customer Analytics

since partnering with BUXTON in 2010,

SPROUTS HAS GROWN

BY 215%

THROUGH ACQUISITION AND EXPANSION. SPROUTS KEEPS THEIR CUSTOMERS AT THE CENTER OF THEIR

REAL ESTATE STRATEGY.

Page 9: Tackling Grocery Challenges With Customer Analytics

challenge No. 3:

GETTING BIGGERBY GETTING SMALLER

The strategy of launching SMALLER CONCEPTS not only enables stores to reduce inventory and cut overhead, but also to expand into new and smaller markets that were previously out of reach. It’s crucial to understand how well you can expect to perform with a smaller footprint before you make the move.

Page 10: Tackling Grocery Challenges With Customer Analytics

the big answer:

F I N D T H E PERFECT FIT

Whether you’re following the trend of smaller footprints or not, it is imperative that you maximize the performance of your new stores.

BUXTON’S POWERFUL PREDICTIVE MODELS and market analytics can help you do this by enhancing your ability to:

Find new markets that are the RIGHT FIT for your concept.

Prioritize store pipelines in new markets so that you seize the BEST OPPORTUNITIES FIRST.

PINPOINT SPECIFIC SITES that optimize your existing markets and put you within easy reach of your core customers.

Test new concepts and HAVE THE ANSWERS that will enable you to fine-tune and improve as you grow.

Page 11: Tackling Grocery Challenges With Customer Analytics

APPROXIMATELY 200 TO 300 TRADITIONAL GROCERY STORESBETWEEN 50,000 AND 70,000 SQUARE FEET

ARE EXPECTED TO CLOSE THIS YEAR.

did you know:

An even greater number of stores having less than 40,000 square feet will open.

Page 12: Tackling Grocery Challenges With Customer Analytics

challenge No. 4:

MORE PRODUCTS,

L ESS SPACESMALLER FOOTPRINTS MEAN LESS SHELF SPACE at a time when new products are being introduced every day. The result is more brands fighting over less space. How do you determine the product mix that will lead to maximum profitability, customer satisfaction and market share?

Page 13: Tackling Grocery Challenges With Customer Analytics

the big answer:

KNOW THE RIGHT PRODUCT

FOR THE RIGHTSHELF IN THERIGHT TRADE AREA

With tighter shelf space, retailers need to think like consumer packaged goods manufacturers.

IF YOU CAN’T CARRYEVERY PRODUCT,you need to determine which ones make the most sense for each store’s trade area. Buxton can help you:

Reach an in-depth understanding of who your core CUSTOMERS are, what they want and what drives their buying decisions at the product level.

Understand exactly how you should manage categories and vary your PRODUCT MIX from one store to the next.

Maximize profits by pinpointing your best prospects for private label products – even down to the SKU LEVEL.

Page 14: Tackling Grocery Challenges With Customer Analytics

APPROXIMATELY

64%PRIVATE LABEL BRANDS.

did you know:

OF SHOPPERSHAVE ALWAYS BEEN CONTENT WITH BUYING

In recent years, an additional 27% (31 million households) began buying private label, with 16 million of them voicing their intent to continue to embrace the value that private labels represent.

CL ICK HERETO DOWNLOAD BUXTON’S

PRIVATE BRAND

S T U D Y

>

Page 15: Tackling Grocery Challenges With Customer Analytics

challenge No. 5:

ONLINE GROCERY SHOPPING

IS GROWINGIt’s not a question of whether or not online grocery shopping will affect your bottom line – the question is how much. With Amazon.com entering the arena with AmazonFresh and most grocers experimenting with online orders and in-store pick-up, online grocery shopping is predicted to have a 9.5% growth rate from now until 2017.

Page 16: Tackling Grocery Challenges With Customer Analytics

the big answer:

F I N D Y O U RE-STRATEGY

Of your existing stores, which locations have trade areas that are ripe for ONLINE GROCERY SHOPPING? Organize your online grocery shopping fulfillment infrastructure by prioritizing existing stores based on customers in the trade area that are most likely to be online customers – from both residential and workforce populations.

TARGET your online grocery shopping services at the household-level. Use the right message, directed at the right household, to maximize your online grocery shopping channel.

This trend is expected to grow by 9.5% annually over the next few years – and where it goes from there is anybody’s guess. How do you stake out your territory in this rapidly growing segment?

BUXTON CAN HELP YOU EXPLORE THE POTENTIAL that online grocery shopping holds for your brand by offering data-driven insights such as:

Page 17: Tackling Grocery Challenges With Customer Analytics

54%did you know:

OF CONSUMERS REPORT THEY HAVE SHOPPEDONLINE FOR GROCERIES.

CONVENIENCE OF HOME SHOPPING57%

LOWER PRICES53%

WIDER SELECTION44%

EASIER TO FIND ITEMS35%

why customers prefer to shop online:

Convenience of home shoppingLower prices (after delivery)

Convenience of home deliveryWider selection

Easier to find itemsAbility to read reviews

Easier to compare pricesEasier to research products

Online “shopping cart” or “wish list”Availability of new items

InherentlyOnline

ReplicableOffline

Source: Booz & Co.

WHY CUSTOMERS PREFER SHOPPING ONLINE

Page 18: Tackling Grocery Challenges With Customer Analytics

S T A R T G E T T I N G

BIG RESULTS TODAY

BUXTON PROVIDES ANSWERS AT YOUR

FINGERTIPS,easily accessible with SCOUT Touch. Available any time, anywhere. Put analytics to work for you – click here to request a demonstration today.

817.332.3681 [email protected] BUXTONCO.COM