How technology and data is driving in-store sales
By Kyle Dorfling - CMO at DotActiv - Oct 9th 2018, 08:21
Considering the pace at which the retail industry evolves, any retailer worth their salt must be forward-thinking. That’s especially true if they want to remain both competitive and relevant. One way of ensuring that happens is to embrace data and use it to offer shoppers better in-store experiences.
At DotAciv we specialise in helping retailers and suppliers use data to drive category performance and improve in-store experiences. Local South African household brands like Dis-Chem, Clicks, Makro, Pick n’ Pay and Food Lovers Market are all customers of ours so we have a lot of valuable learnings to share when it comes to this area of retail.
The purpose of this article is to share some of our experiences around how DotActiv’s Category Management Software together with retail data is being used to drive in-store sales.
1. Retailers choose the right products for their stores
Assortment planning - the process of selecting which products to sell in stores - should always be of primary concern for retailers. That’s because the final assortment chosen plays a role in shopper satisfaction. It can mean the difference between shoppers returning or not.
However, before retailers decide which products to stock, they first apply unique sets of rules or calculations to each sub-grouping of products to uncover both opportunities and slow movers in their assortments. The data used includes sales, market data and even space available. The days of decentralised and haphazard buying is quickly becoming obsolete.
2. Retailers build data-driven planograms quickly and more efficiently
There is no doubt that planograms contribute to sales growth and efficiency. We’ve done a number of case studies recently and found that where DotActiv’s planograms were implemented, the categories in question saw an increase in sales of 19% to 147% which is significant.
The problem is that in the past, retailers could only build planograms manually. Fortunately, the software has since evolved to ensure that that is no longer the case. Using planogram automation software, retailers are now building data-driven product layouts which take sound merchandising principles into account with a few clicks of a button. An exercise that used to take a few hours to complete now takes far less.
3. With data, retailers can allocate the correct space for their products
A simple way for retailers to increase their in-store sales is to ensure that the amount of space a product occupies on the shelf relates directly to the sales that it generates.
It is known as shelf performance analysis, and a retailer is only able to determine this by examining the relevant data that is in a planogram, namely Sales; Product; and Fixture Information.
For example, if the data shows that a product is contributing more and more of the overall sales to the category over a period of time, retailers would allocate additional space to allow it to continue to grow and provide that return on investment.
By understanding their shelf space performance, retailers are essentially maximising the selling potential of their shelf space. Also, by allocating the correct shelf space to each product, shoppers are better able to find what they are looking for. An invaluable concept around analysing shelf space performance is Days of Supply: take a look at this infographic to learn more.
4. Retailers plan floor space strategically
A floor plan is essentially a data-driven retail blueprint showing retailers where to position their categories in-store for maximum return on investment.
With data, retailers give each category the proper allocation of space relative to their sales contribution to the store. This method of floor planning provides an opportunity for retailers to apply logic to category positioning while also reducing floor congestion.
The key difference in thinking here is that sales data only tells half the story. When you combine sales data with space planning data using specialised software you get to see your store performance in a new light.
Armed with the above retailers don’t simply apportion the correct amount of space to each category but they also position categories in such a way that they alter shopper traffic flow. Some of the goals retailers typically have in mind when influencing shopper traffic flow is to expose shoppers to more merchandise, reduce shopper traffic hot spots during peak trading hours and reduce shopper frustration.
Understanding your retail data is key to helping you to make smarter business decisions. What’s more, by combining it with space management data you get to see your retail data in a whole new dimension. At DotActiv we have the specialised space management software, support, training and services you need to get execute these concepts. To learn more about some of our recent case study results feel free to reach out to me on LinkedIn. You can also take a look at some of our demo videos here.
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