Retail Analytics

Rethinking ways to optimise store performance: one size shouldn't fit all

Written by Tony Loxton
Aug 25

Standardisation, long-hailed as the most effective and efficient way to optimise store performance, is out. Today, target markets consist of consumers who behave in vastly different ways, with niche markets emerging within. For example, you could have a retail outfit smack bang in the middle of suburbia, with clientele consisting predominantly of stay-at-home moms, often with their children in tow. Another one of your stores may be in an urban hub, surrounded by skyscrapers and inundated by harried office workers first thing in the morning and during their lunch break. So how does one brand serve these very different markets, each with their own unique buying behaviour and needs? The answer: localisation.

Localising your offering involves tailoring individual stores to the nuances and unique behaviour of your consumers.

Vijay Vishwanath and Darrell K. Rigby, writing for Harvard Business Review, report that big brands like WalMart and Target historically relied upon a ‘once-size-fits-all’ approach to gain market share and expand operations with easily-duplicated store models. Today, as consumer markets divide into niche sub-markets, retail chains are having to meet their consumers on their terms if they want to continue to enjoy their patronage. The shift in consumer behaviour is a substantial one. “The demographic company Claritas determined in the 1970s that 40 lifestyle segments were sufficient to define the U.S. populace. Today, that number has grown to 66, a 65% increase.” says Harvard Business Review. It makes sense then, that brands need to evolve alongside changes in consumer behaviour if they wish to compete against smaller, independant offerings of local bespoke brands.

As consumer communities become increasingly diversified, retailers are customising individual outlets. The result? Store performance skyrockets.

Tailoring individual stores to the demographics, lifestyles and income of shoppers allows retailers to align their offering with the nuances of their niche markets, and as a result, bolster store performance. By customising aspects like pricing, marketing, store layout and product lines, they’re able to improve store performance, often without having to shell out substantial amounts of money in order to do so. For instance, harassed suburban moms with toddlers in tow have very different priorities compared to an office worker looking for a snack on the go. A suburban store may alter the width of their aisles to accommodate strollers, use better lighting to parlay the fears of over-protective parents, and offer child-friendly trolleys to make the shopping excursion more convenient. They could also display nappies, baby food and household essentials in prominent areas, further meeting the needs of their primary customers. In comparison, a store frequented by single corporate workers with a disposable income could stock higher-end alcohol and deli food, and have a coffee and gourmet sandwich bar at the front of the shop for the lunch time rush.

The move from standardisation to localisation is a logical means of reviving floundering store performance, and further strengthening those that are meeting their targets. 

Another problem with operational models that are standard across the board, says The Harvard Business Review, is that they’re easy for competitors to replicate. In addition, as consumers become more vocal about their needs and wants, brands are having to ensure that they seamlessly fit into the landscape of their target market – literally and figuratively. “From California to Florida to New Jersey, neighborhoods are passing ordinances that dictate the sizes and even architectural styles of new shops. Building more of the same long the cornerstone of retailer growth has been tapped out as a strategy.” says The Harvard Business Review. As a result, the brands who stick to a rigid approach are the ones who close shop sooner or later.

Making the most of customisation requires measuring its effect, which means people counters are essential.

In order to customise your stores to the way your customers shop, you need insight into their buying behaviour. Once you’ve aligned your offering to their unique needs, you’ll need to monitor the efficacy of this. Making use of people counters is one way to measure how people move about your store, how long they stick around for, as well as identify peak shopping times and hotspots within your store. Ultimately, implementing foot traffic analytics ensures your customisation strategies are data driven, as opposed to based on guesswork. If you want to boost your store performance by tailoring your offerings, find out about Blix Foot Traffic for retail door counters, the easy way to monitor and analyse customer and staff flow.

Learn more about Blix Traffic for retail

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