Almost the main problem of regional stores today is the decrease in consumer demand. Customers enter and exit the trading floor without buying anything. In other words, store conversion has dropped significantly. Shopkeepers explain this by the “money crisis among buyers,” heightened competition and other objective reasons. But Yulia Veshnyakova, CEO of the Academy of Retail Technologies and a business coach, thinks differently. In this article, Julia shares her observations and opinions on how to solve the problem.
On duty, I go shopping quite often, especially as part of the mystery shopping program. In early April, before going on another business trip, I urgently needed new clothes and shoes for presentations and speeches - business, but not very formal. Working in front of an audience for 8-10 hours on your feet, you begin to appreciate its convenience and presentable appearance in shoes. I selected stores that were similar in format, popularity and location to the stores of our main customers, mapped out the route and moved briskly.
However, the more I went around the shops, the faster the hope of a successful shopping evaporated. Despite the difference in signage and design, the contents of the stores were depressingly the same. According to the main characteristics of the assortment - style, demographic groups, functional groups, situations of use - they presented a little bit of everything for any buyer. Models were proposed for both young girls and women of Balzac age. Sellers did not know the assortment well, did not see the difference between classic models and smart casual style. At the entrance, almost everywhere there were seasonal demand groups: bright summer sundresses and leisure shoes - ballet flats and high-heeled sandals. For the month of April, on the eve of the May holidays, this may not be bad, but there were more than three weeks before the holidays, and the weather outside left much to be desired: + 2 degrees.
There was too much “motley” goods in the stores, because of which the trading floors looked untidy, as if they were not combed, and the sale period was still far away. At the same time, sellers were firmly convinced that they had a wide selection of goods for any buyer for all occasions. But soon I realized that they have no real choice, not only for me, it is not at all. After all, I came in with a specific request, I wanted to solve my specific problem, by the way, which was not unique to Moscow at all. And I was offered no more than two or three models, and if I wanted to try on something, I did not have the right size, despite the fact that I have it very popular, 39. So with all the seeming richness of the assortment for me personally, it turned out to be very meager.
It turns out that for all the breadth of the assortment, the buyer is in a situation of limited choice. Of course, theoretically it is likely that he will like one of the two or three proposed models, and he will buy it. But how big is it? That is why in small shops the buyer learned to evaluate the assortment literally at first glance: he goes in, sees a “vinaigrette” from different things that are not compatible with each other, either in color, in style, or in the texture of materials, will turn around and move on. As a buyer, I was no exception. After the fifth or sixth store, to my own surprise, I unconsciously began to demonstrate the shopping behavior described by my customers: “come in and go out”. Realizing this, I concluded that even the existing solvent demand in Moscow shopping centers is not so easy to satisfy.
Many regional customers also prefer to present a wider range of products in their even small stores. Where does this desire come from? Of course, they want to attract as many customers as possible to the store by offering them a wide but shallow assortment. Such an assortment matrix most closely resembles a liferaft in a turbulent market stream. As a result, unsold goods with “embossed” size ranges begin to accumulate in warehouses. Shops are surrounded by illiquid runoff, like a ship with shells, and slowly, but surely, they are sinking.
Every retail specialist knows that small-format stores in the middle price segment cannot work in the concept of a department store. They are doomed to be specialists in a certain category, which means that they offer not a wide, but a deep assortment in a certain niche. Nevertheless, stores with targeted niche positioning are still rare guests in Russian retail spaces. Why? Most often, the reason is a misunderstanding or underestimation of consumer demand, that is, the lack of market orientation of the store. Many entrepreneurs continue to work on the inertia of old success, when, due to high demand, store differentiation was not needed. So it turns out that they spent the money, purchased the goods, but for whom it is not clear. They wanted everything, for everyone and for different situations, and did not notice how they ended up in the assortment pit, or rather, in the “commodity heap”. What I saw in stores in April was also confirmed on wholesale orders of collections: chaotic grabbing, pulling assortment items from different color, price and stylistic themes with different delivery times continues. With such an order "in pieces" the assortment on the trading floor will never look visually attractive. So we get an assortment of vinaigrette, which not only does not contribute to high sales, but, on the contrary, really slows them down. A client enters a store, sees a sales area overloaded with assortment, is surprised at the riot of colors and prints, which ripples his eyes, draws a parallel with the Cherkizovsky market and silently leaves.
What to do?
Analyze your work on the other side of the counter, look at it through the eyes of the buyer. Answer the questions: “For whom and what are we selling? Why are these shoes for the buyer? Why is it profitable and interesting for him to buy it? ”An assortment matrix needs to be formed, guided by the following algorithm of actions: first we study the demand of customers, and then, according to this demand, we make a purchase. Most Russian retailers do the opposite: first they buy, and then they try to sell this product, not taking into account pressing consumer needs. In order to successfully cope with this problem, it is necessary, first of all, not to make decisions on the assortment on the basis of common sense or looking at competitors, but to begin work on positioning, breaking this process into steps and stages.
Positioning is a way in which consumers identify a particular product according to the characteristics that are most important to them. The basis of positioning is the choice of the target segment of buyers. The target segment is the group of customers (core) who buy more or more often and bring the store the most profit. There may be one, two or even three such groups in a store, but you should not highlight them more, otherwise our efforts to focus the assortment are in vain. For example, if you specialize in business style shoes for women, then there is no point in going into the teenage shoe niche. It is better to expand the existing assortment in terms of functional and stylistic characteristics, for example, such as "avant-garde", "comfort", "evening shoes", and offer 3 price steps (with a gap of no more than 25%). The essence of segmentation is to highlight the most interesting and profitable customer groups and create an offer for them that best meets the needs of these groups. These customers are worth focusing on in your marketing efforts. Among the parameters used to segment consumers for the footwear market are gender and age, occupation (lifestyle), income level, climatic characteristics of the region, local preferences, etc. Answer your questions: who are your customers? how many are there? where they are? what routes do they take? where are they? how do they rest? who do they work? how much do they earn? what shops do they go to? Why does what you buy need your customers? How does your proposal make life easier for them, solve a problem? Preferences in the choice of shoes are very closely related to these parameters - both functional (for what?) And style (how?).
Where and how to get to know your customer?
Customer research, not random, but with a conscious need, is best done in your own store. This is done by “consumer” marketing - a kind of field duty aimed at obtaining information about customers directly on or near the trading floor. As a result of various types of systematic observations - questionnaires, surveys, interviews, “flying” focus groups, joint purchases and sales analysis - the company receives a large and varied information:
Demographic profiles of visitors / buyers and specific types of buying behavior for each of them
· Dependence of customer behavior on the trading floor on the decision to purchase, selection of goods, amount of check
· Customer satisfaction matrices: strong and weak store position in terms of customers
· The attractiveness of certain product categories and areas of the sales area
· Patterns of routes in the store of visitors by groups, for example, gender.
· Perceived quality of goods and services
· The image of the store in the minds of both a loyal audience and casual customers
As a result, one can obtain not only traditional “passive” information about, for example, how many and what kind of purchases were made, but also an incentive “active” - which purchases did not take place and for what reason. This active information is the basis on which changes in sales are planned, in particular, in the assortment policy, and, therefore, in the upcoming purchase.
For example, for the vast majority of companies, the main basis for forecasting sales and, accordingly, ordering goods for the next year is sales data for the previous season. This, if you think about it, is the same as managing a company based on financial statements. All the time you analyze the long past. Of course, sales data is a very valuable source of information, but only a source, because this data becomes information as a result of analysis. Such an analysis can show what was sold, when, in what quantity, but it will never show by whom and why it was bought and, most importantly, for what reason it was not bought.
For example, why were all these shoes bought? Maybe the customers really wanted to buy sandals, but they had little choice, and they bought shoes simply because they went around five stores and decided to buy at least something. But based on an analysis of sales, we make forecasts for the next season, place orders, and invest in the development of the company. So that field active information obtained in stores will ultimately help make key strategic decisions based on which you can develop:
· Price positioning and pricing policy itself
· Customer Loyalty Program
· Principles and budgets of marketing communications: advertising in trading floors and beyond, promotions for promoting goods in stores, working with the media
· Standards for merchandising, zoning, testing and improvement of commercial equipment
· The seller’s work standard, identification of areas of inadequate competency and training programs
Active information will tell you and much more for successful sales. But, first of all, such information will make it possible to determine your customer, whose characteristics will become the core around which you can build a successful retail business.
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