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Retail Spending
DotActiv TeamAug 6, 2018 5:20:53 PM11 min read

6 Things That Damage In-Store Retail Spending

Finding ways to encourage shoppers to increase their retail spending in your store goes a long way toward helping you meet your sales goals. That much is obvious. However, it’s not a given that you will reach your goals every month. That’s because while there are many actions you can take to boost spending, you could also be your own worst enemy.

By that, we are referring to the point that you could be doing something either in-store or around your store brand damaging your chances of success. And you might not realize it. Fortunately, there are actions you can take to correct your mistakes.

Retail Spending Store Brand Inconsistenty

1. Your store brand is confusing to shoppers

The first reason shoppers aren’t spending (more) money than you’d like in your store is because you’re inconsistent in how you present yourself to them. Simply put, your retail brand is confusing.

Let us explain:

After opening a store and being in business for a while, you’ll have built up a distinct brand around your outlets. With that comes customer expectations around everything, including your store layout, shelving, and product range.

So let’s say you are an FMCG retailer with an in-store Bakery and Butchery and have multiple store locations. Within one store, you locate your bakery section beside your in-store butchery. However, in another, the bakery and butchery are situated on opposite sides of the shop.

Anyone who visits the second store having already visited the first expects to have the same experience. They expect to find the bakery and butchery side-by-side. However, when you deviate from this expectation, you create the opportunity for shopper anxiety and discomfort.

When shoppers are out of their comfort zone, which is when most impulse shopping happens, you lose out as they are more likely to abandon their baskets.

How to fix this mistake if you’ve made it

Fortunately, achieving store brand consistency and encouraging increased retail spending is easy.

In your store layout, you can start with your floor plan. Build a floor plan that considers your different category hierarchies and keeps the arrangement consistent for each store, no matter their location. At a category level, you should overlay your category plans into a clear flow that makes sense to your customers.

This category flow must also include a consistent plan for brands at a shelf level. Doing that will lead to increased shopper familiarity and eliminate any unnecessary anxiety.

Suppose you want to be consistent from a product point of view. In that case, you need to consider, among other aspects, implementing data-driven planograms and standardizing your merchandising principles for all your stores.

Retail Spending In-Store Educational Content

2. There is a lack of educational content in-store

A second mistake you can make in-store is to believe that you don’t need any in-store educational content.

'Educational content’ is a broad term and can encompass just about anything about educating your customers. In this context, we’re referring specifically to signage, merchandising displays, and promotional stands that can direct your shoppers to where they need to be. More importantly, help them to shop your store easily.

In many instances, though, the thinking goes that since you have store staff, you can expect shoppers to approach them if they have a question or can’t find a product. But that’s assuming too much. How do you know if your shoppers will ask? Many might not. And where does that leave you?

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There is also the point that your store staff may not always be on hand to help, which compounds shopper frustration.

For example, a shopper comes in looking for a specific product, and they have no idea where to find it because they’ve never been in the store before. What makes it worse is there is no signage to tell them where to go or anyone in sight.

What ends up happening is they’ll walk through the store in the hope of finding the product. If they don’t see it soon enough, they’re likely to turn around and leave.

How to fix this mistake if you’ve made it

Again, this is an easy fix.

One solution is to look at adding marketing banners either to your gondolas or beside your shelves, which have additional product or category information. Having this information at hand allows your customers to shop for your different products and categories with ease.

But be mindful - you shouldn’t put these in all of your runs since too much can clutter your aisles and make your store appear messy.

Besides that, it’s a good idea to include manned promotional stands at the end of certain aisles. While they might promote one specific product, these sales reps are specialists in their area and can double up to educate your customers and offer answers to customers’ questions.

If you have the budget, another good idea is to include a computer touch screen at the beginning of an aisle. On this screen, customers can find out where you’ve placed your various categories and products.

Retail Spending Poor Customer Service

3. Your customer service levels aren’t where they should be

We’ve mentioned in many of our previous pieces on customer service how crucial it is that you need to focus on this aspect of your business.

In fact, in an industry such as retail where many stores offer the same range of products as yourself, the level of your customer service can be a key differentiator.

You only need to glance at a few statistics about customer service to confirm that.

According to American Express’ 2017 Customer Service Barometer, 7 out of 10 U.S. consumers say they have spent more to do business with a company that has delivered great service to them. More importantly, they are willing to spend 17% more to do business with these companies. That’s up from 14% in 2014.

Meanwhile, according to Accenture, $1.6-trillion is lost by companies due to customers switching as a result of poor customer service. And that statistic is only for the United States.

Of course, there is also a positive side to this. Customer Experience company, Glance Network notes that 89% of customers are more likely to make another purchase after a positive customer service experience.

How to fix this mistake if you’ve made it

So what can you do to correct this? There are a few ways.

Firstly, you can provide specific retail training that focuses on teaching your staff communication skills, product knowledge, and how to deal with customers. Before you offer any training, though, you first need to do a needs analysis to find out the specific skills that your staff lacks.

From there, it’s about deciding if you can do this training in-house or if you need to outsource it to a third party.

Secondly, you should study your target market. There are different types of shoppers, all of whom have different expectations around customer service, and you need to be able to cater to each one. Or, at least those that you’ve identified as customers of your store.

Lastly, you cannot merely rely on your sales staff to be involved in customer service. If you want to build a reputation as a friendly and welcoming store, you need to get all of your team involved.

Here are a few more tips for providing your shoppers with next-level customer service.

Retail Spending Range and Space Planning

4. You haven’t paid attention to your range and space planning

When planning your store and everything around it, you must pay attention to both the range of products you plan to stock as well as how you arrange them on your shelves in-store.

Let’s first look at why your range of products is crucial.

Localized assortment planning is key to your success as a retailer since it allows you to offer shoppers the right products at the right place and at the right time. It also considers the financial objectives and seasonality of the product selection so that both you and your customers gain from the outcome.

If you don’t pay strict attention to it, you end up with range inconsistency, which can deter customers from visiting. Even loyal customers will stop returning. And you can’t blame them. If they can’t find the products they want in your store, you can’t expect them to continue shopping.

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It’s the same if you take a half-hearted approach to space planning.

If you don’t provide each of your products with the space that they deserve on the shelf, according to their rate of sales, you could end up either facing out-of-stocks or overstock on unpopular items that don’t sell well. Again, the outcome is clear: customers will stop supporting your retail business.

How to fix this mistake if you’ve made it

If you want to fix (or prevent) such a mistake, it’s worth investing in a category management solution to help you. That’s because it can correct any range or space planning mistakes that you’ve made.

Here’s how:

First, you’d consider taking a category-based clustering approach to ensure that your similar stores by category are grouped. You can arrange your stores by target market, geographical location, LSM, and more. From there, you’d complete a centralized assortment planning exercise that would meet both your category strategy and tactics.

By doing a proper ranging exercise, you’re also ensuring that the correct product ranges are selected for your specific stores, thus meeting your customers’ needs.

Once you’ve completed your ranging exercise, you follow this with strategic space planning. This includes ensuring that your ranges fit on your shelf neatly and uniformly, and apportioning the correct space, based on the sales data you have available to you.

Retail Spending Poor Pricing Strategies

5. Your pricing strategies and in-store policies are both poor

There shouldn’t need to be any debate about the impact that your pricing strategies can have on retail spending. That’s if you’ve raised the cost of your products in the hopes that people will see a high price as a sign of quality.

If your customers don’t believe the price fits with the value of the product on offer, they won’t buy. Instead, they’ll find another retail chain that meets their expectations. On top of that, you could establish a reputation as a store that isn’t so much expensive as its overpriced.

Of course, it’s not just about pricing strategies that you can get wrong but also your in-store policies. Here, we’re referring to your return and guarantee policies, which makes it closely linked to your customer service levels which we touched on above.

If your customers are returning a product, they’re most likely unhappy and irritated. As we mentioned in a previous piece, if your staff handles this situation poorly, it could escalate to the point where you might lose a customer. If they’re angry enough, they may tell all their friends and family, so there is also a compound effect at play.

How to fix this mistake if you’ve made it

The first step to take to correct such mistakes is to ensure that you understand both your target market as well as your position in the marketplace.

Are your prices in line with the general market? Are they better priced? More importantly, are they matched to what your customers expect?

When correcting your efforts here, you should also pick your wins. For example, you could look at sacrificing some profit on your traffic generators or even take a loss on these lines to attract more customers and increase their in-store retail spending. Meanwhile, along with your profit generators, you could also look at offering an affordable option.

Besides that, you need to ensure you align your category strategy with your tactical plans. For example, to cater to your average customer, you might need to carry a small economy range, a broad and medium-priced range, and a small premium range for a specific category.

Retail Spending Ineffective Retail Marketing

6. Your retail marketing efforts are ineffective and dull

Alongside the mistake of not including good educational content in-store is any error around your retail marketing efforts.

While it may seem like we’re rehashing that point, that’s not true. Both are closely linked, but there is a difference.

In this case, we are referring to both your in-store and external advertising efforts. In other words, the TV and newspaper ads, brochures and any other form of external promotion entice shoppers to visit your store. And the promotional banners and displays to point them in the right direction.

As for why it’s such a mistake, that much should be clear: your shoppers won’t know about a product or promotion if you don’t tell them.

What’s more, if you fail to include any form of external advertising around your store while your competition focuses heavily on it, there is usually only one outcome. Shoppers will gravitate towards your competitors. And it doesn’t matter if you have a better price or a value-for-money product.

How to fix this mistake if you’ve made it

Since you can fix this mistake at two different levels - in-store and external - it’s worth looking at both cases.

When addressing this error in-store, you could do so by first apportioning your floor space or Hotspots to any promotions you have running. Your Hotspot is a subtle marketing tool to expose a particular brand, category, or product over and above everything else.

Meanwhile, dedicated floor space is more in your face. That said, both work well when done correctly.

Then, if you can overlay your in-store efforts with strategic and focused adverts through your new media and traditional marketing channels - TV, radio, newspaper, and online - you could ultimately boost your foot traffic.

Conclusion

DotActiv Lite, Pro, and Enterprise are all different versions of our category management software that allow you to drive category performance and in-store experiences. You can visit our online store here or book a software demo here.

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DotActiv Team

The DotActiv team comprises category management experts lending their retail experience and knowledge to create well-researched and in-depth articles.

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