How to open a new store and engage the target audience? Article two – Practical use of customer behavior data
If you are opening another store in a chain, then you have a clear idea of what to do for most organizational issues. However, when it comes to calculations and forecasting, there are many factors to consider, some of which are hard to predict. Want answers in numbers? Let’s continue our discussion about the analytical tool Num8erz.CustomersInsights with the founders of Num8erz – Andrii Shevchuk (CEO) and Denis Romash (Director of Research).
The main advantage of the IT tool – Num8erz.CustomersInsights is that it allows you to view stores with different aggregations – by locations, store formats, from the perspective of customer behavior, or through the prism of specific sales figures. Retailers’ data provide a full understanding of the market situation, allow you to assess traffic, and potential sales of a future store, and help choose an assortment. What other questions can deep analytics help answer?
How you can get all the necessary information about the target audience and the behavior of target customers you can read in the first part of the conversation.
Understanding how stores of different formats perform in the region?
If different formats of stores provide data to Num8erz.CustomersInsights are already present in the region or district, it’s easy to compare them and determine which one performs better in terms of sales per square meter of retail space. The dashboard of the analytical panel allows you to see the total traffic and sales for a group of stores united by a common feature. This way, you can “try on” the market.
Performance of product categories at the competitors
Yes, the analytical tool allows you to select stores by one or several categories and view traffic in stores by location. Typically, every retailer knows their strong side. But it may happen that in this region, products of this particular group are not in demand. How then to compete? Or conversely, you may find that the category has potential, but it is not fully exploited in any store at the location.
Planning the proportions of product groups in a store
To successfully open a store in a specific area, you at least need to understand the ratio of categories and how they should be represented in the assortment. By studying customer behavior, you can track which products and product groups are in demand. Accordingly, it would be wise to repeat them in the assortment of the new store and introduce your specific “image” categories. This will allow you to anticipate the audience’s expectations and stand out from the competitors.
Select the assortment structure based on the popularity of brands in a specific location. The popularity of a brand is noticeable through fresh category products. For example, dairy products are clearly local. Here, there’s a distinct dependence on the region and consumer preferences. Data from the analytics panel also provide an understanding of how much of a particular local assortment should be placed on the shelves in various product groups. That is, one can look not just at gross sales, but at the popularity and frequency of visits to these brands, and how often these brands end up in the baskets of your target customers.
Market data and analytical tools help understand your customer and their needs. For example, if you want to open a store that is more than just a convenience store, meaning you want to attract an audience that doesn’t chase discounts, then with the help of a service, you can select less price-sensitive customers, who often buy expensive items in all categories, have a wide basket, and a large average check. The Num8erz.CustomerInsights platform allows you to look specifically at the structure of their consumption, to then form the store for them.
The Num8erz.CustomerInsights platform allows you to look specifically at the structure of your customers’ consumption, to then form the store for them.
Can the number of POS points be predicted?
If you have correctly chosen positioning, Num8erz tools will allow you to assess the potential and traffic of the store, from which you can design the configuration of the retail point down to the number of cash registers. A bright example from practice can be mentioned when products of a social group were introduced into the assortment at the opening of a store for above-average category customers, who basically come to the store for expensive drinks, delicacies, and perhaps some home goods. As a result, they got high traffic, queues, and small average checks. Adjusting the assortment towards meeting the needs of the target audience reduced the load on the retail point, decreased waiting times at cash registers, but at the same time managed to increase the average check and margin.
This is yet another confirmation that to open a successful store, one should aim as precisely as possible at a certain audience, and most importantly understand its consumer behavior. With the help of tools, you can assess how the selected segment of customers behaves in a specific location: what’s in their baskets, how often they buy, and what not to put on the store shelves.