These blog articles were developed in partnership between Revionics and Retalix to provide retail industry trends and insights. This is Part 1 of a blog series and Part 2 can be found here. Retalix and Revionics will be participants in the upcoming NGA 2013 trade show in Las Vegas. Stop by our booth #500 to discuss how our respective solutions can help your business.
Are Your Social Commerce Strategies Powering the Path to Purchase?
Smart retailers are turning buzz into business by engaging shoppers where they are by using the new tools of social and mobile to create relevant, meaningful relationships with consumers and to power the path to purchase.
Solutions such as Revionics® Social Commerce targets and motivates a retailer’s most loyal, influential shoppers, converts shoppers into vocal advocates, and uses customers’ social graphs through tailor-made engagement to provide incentives and rewards that surprises and delights the consumer.
In addition, by empowering customers to spread the word on your behalf, it provides a powerful mechanism for grocers and their CPG partners to drive branding and customer engagement, creating new revenue streams for both parties. All this takes place along preferred channels and touch points all the way to online or offline register rings. Click here to see how PacSun has harnessed the power of social and mobile marketing.
Are Your Price Strategies Differentiating You Enough?
Competitive pricing in the grocery industry has become more and more important. Many grocery stores keep some of their prices in check by being aware of their competition’s prices. The recent recession has made the average shopper a lot more value driven and price aware. They are also much more informed and connected with their smart and mobile devices, which provides them with immediate access to prices across various categories and competitors.
Grocers also need to be prepared and have strategies in place to compete against retailers such as Amazon, which have been encroaching on grocery sales. With services like same day delivery and free shipping, online retailers are rapidly becoming more of a competitive threat. These new challenges put additional pressures on the margin and make it imperative for grocers to manage their overall strategy more efficiently while keeping a strong price image. Many grocers leverage Revionics End-to-End Merchandise Optimization Solutions to help them identify items that have a high price visibility among customers and indexing these prices to the competition. In addition to ensuring grocers have the most competitive pricing, organizations also need to offer special services and customer perks that help differentiate them in the industry. For example, services that may be able to help them do this include home delivery and store pickup of online carts, which are becoming more and more popular.
Is Your Target Marketing Precise Enough?
Creating and extending loyalty is critical in today’s hypercompetitive market. Shoppers are looking for shopping experiences, which make them feel special and recognize them as a valued customer. Mining loyalty and transaction data in order to identify and extend optimal offers and rewards that recognize shopper and shopper segment preferences at the shopper’s preferred touch point are more likely to incentivize social advocacy, more frequent visits both in-store and online, larger baskets and multiple purchases. Targeted, segmented and personalized offers and incentives can drive loyalty acquisition and extension and ensure that social programs and activities result in rings at the register.
Marketing departments or retail chains can leverage customer data and shopping patterns for creating customer segments. This way they are able maintain close relationships with customers, tailor personalized promotions and target advertisements at carefully selected shopper segments.
Revionics® Social Commerce and Revionics® Promotion Optimization solutions can help you target the right customer, at the right time through the right channel. In addition, learn how PacSun leverages their customer data for optimal customer loyalty and profits by clicking here.
Is EDFP (Every Day Fair Pricing) Part of Your Price Strategy? It should be.
All consumers want to ensure they are receiving optimal value. In an ever-changing retail industry many grocers are finding that the traditional Hi/Lo pricing model is becoming less and less effective in managing the profitability of their business. The new buzz word is EDFP (Every Day Fair Pricing). Finding that balance of right priced items everyday and the items that will efficiently respond to promotion with an increased lift, but not taking the customer out of the market place for weeks with pantry loading, is the foundation of the EDFP model.
Each item has a definite “Consumer Demand Signal” for both everyday and promotional sensitivity to price. Managing the interplay between these elasticities allows identification of the most effective role of each item. Applying strategies for Pricing, Promotion, and Placement against each of these item roles, leads to a more effective value proposition for customers and efficient margin improvement management for the grocer. Advanced Key Value Item analysis (KVI) is the foundation block for building an EDFP environment for pricing within a grocers organization.
Is Your Organization Managing Cost Increases Effectively?
In the grocery industry, we all know that price increases are inevitable. Whether it is due to rising costs for transportation, materials, or other expenses passing along price increases to customers is a reality. The decision to raise prices may be rather easy; communicating price increases to customers may not go so smoothly. When prices must increase, it is imperative that you communicate how the product remains a good value. Otherwise, why should a customer pay more just to help cover your costs? Take the sting out of the price increase by identifying and communicating its value proposition (e.g., selection, convenience, and service). Never feel that you have to apologize for your price, but make certain that the value offered is never in doubt.
Grocers can help combat inflation by increasing the mix of private brand products. The extra margin private brand products provide, usually 400–500 basis points, gives a grocer the incremental margin to absorb some of the cost of inflation if the consumer reacts negatively to increases in unit prices. Some grocers have already begun implementing private brands in their assortment mix as a margin-protection strategy. These tried-and-true levers will help grocers pinch pennies to stave off diminished margins. Many grocers have already made these moves and are unsure of what to do next. They also fear fallout from pushing too far, and may struggle to predict the effects of their actions, which is when a new advanced analytics approach comes into play.
Arm Your Organization with Advanced Analytics
Advanced predictive analytic solutions such as price, promotion, markdown, space and assortment optimization have enabled grocers to run more sophisticated analyses, using massive sets of transactional and third party provided data. The ability to do this has provided grocers with the precise answers to questions once left up to just gut instinct or a feeling. While there will always be an element of art to merchandising, it is the science that underpins new tools now available that have the immediate potential to help merchants make more informed, data-driven decisions based on their shoppers demand signal. Pricing is the lever that will likely get the most attention as inflationary pressures intensify. However, a grocers’ ability to pass along pricing increases will likely vary depending on the company’s market position and value proposition.