Time to Stomp Back
By Russ Ward
If you are ever going to talk to independent grocery store owners and managers do not even mention the “W” word. You know what word I am talking about, a certain box store chain headquartered in Bentonville, Arkansas. Just the mention of it can make otherwise rational people spit fire and throw you out of their grocery store lock, stock and barrel.
Claims of unfair business practices maybe a part of the reason why there is a palpable hatred but honestly, the “W” store comes into the local community and stomps with both feet on the little guy. The big store is so big, that almost everyone in their path is a little guy in comparison. Both regional and local supermarkets are in the crosshairs as that is the nature of competition in a free market system, survival of the fittest. However, if we take the time to read a few tea leaves and the March 2014 edition of Consumer Report magazine’s annual Supermarket Buying Guide, we may find that in their own way regional and local stores can stomp back, at least a little.
Consumer Reports magazine found that “no chain tried their customers' patience more than Walmart Supercenter, where 80 percent of shoppers had at least one problem. Shoppers who frequented Walmart…were most likely to be miffed about the lack of open checkouts, out-of-stock regular items, indifferent employees, spotty pricing, and confusing store layout.”
Now, how do you stomp back? It is time to do an honest assessment of how your store is doing in the above categories of weakness listed by actual Walmart customers:
Is there a long wait in your checkout lanes? It doesn’t matter how many lanes you have, what matters is the overall time spent in line. Think outside of the box about what strategies you can employ to reduce checkout time overall. Big chains are using technology like Quevision to track the heat signature of shoppers so management can deploy more cashiers at just the right time. But, a well trained staff and management can make a significant difference by being observant of the needs of the customer. I have actually witnessed this approach in action.
A small independent grocery store with three lanes had a proactive system where the lone cashier could call for others as she saw patrons approaching. She was processing a cart full of groceries when another customer approached with just three items. The call went out over the PA system and another employee immediately opened another lane and rang her up with a smile on her face and no interruption. That was great customer service! Also, affordable technology can speed the checkout experience. Processing credit cards can be a time killer. But, new Pin Pads can improve the speed of the transaction dramatically.
Are you running out of regular items often? If so, the back office may need to be improved or updated to assist with tracking in store items, ordering and restocking. Nothing drives a current customer to the competitor quicker than to not have the items they need or expect.
First, there must be smooth and simple integration between the front and back office. Then, check to make sure that you are getting the most out of the system you have. Sometimes the software package you have comes with powerful applications that can help. Too often they are going unused. The “bells and whistles” that have not been employed, may be the key to increasing your ability to keep the shelves full. Also, consider new solutions could be purchased as an upgrade for a minimal cost. Think about your needs and then have a discussion with your POS provider for a solution. You may be surprised at how easy it is to increase consistency of what you offer.
Are your employees indifferent? There is no software solution to this problem. However, that doesn’t mean throw in the towel. Indifference can take many forms, from a lack of a smile when greeting customers to an unclean, unsafe customer environment. Procedures can be put into place that gives specific tasks for each employee regardless of the size of the grocer. This should help keep the store looking and feeling like you care. Also, a new coat of paint, new flooring and better lighting can all give the impression that the customer is entering a well-organized business that cares about the shopping experience. To help keep an eye on new procedures and to ensure employees are completing tasks even when management is not onsite, integrated surveillance that can be viewed on any mobile devise can help.
Spotty pricing – The 2012 U.S. Grocery Shopper Trends Executive Summary found that the fifth most important factor affecting store selection was accurate shelf tags. This beat out sales and specials, fast checkout and store location, according to the report. Accuracy in pricing is very important to the consumer and also to you but, it can be very difficult to keep up with. For instance, if an ice cream maker changes the size of a product from 1.75 quarts to 1.5 quarts but keeps the same UPC, it can create inaccurate unit prices that will anger some customers.
Just hanging the wrong tag in the wrong place and other sloppy work habits can create many of the problems that can create shrink. There are solutions that are becoming more affordable every day. Electronic Shelf Labels (ESL) can reduce mistakes, create a savings in supplies to print tags and also save labor costs in hanging tags. Price changes come from one location and if the item is in several locations in the store, they all get changed at once. If ESL’s are not in the immediate picture for your organization, having consistent procedures can reduce mistakes and improve pricing.
Is your store confusing? If it was good enough for grandpa it’s good enough for me. You rarely hear someone go that far when defending the current layout of their store but, I can tell you that some items have probably not even been considered for a new location since the cornerstone of the building was laid. The layout has to be welcoming, well organized, with appropriate easy to read signage and easy to navigate aisles. That is not to say that the layout is designed for the convenience of the shopper. Quite often the opposite is true.
For instance, the staples are often in the back of the store, forcing shoppers that are just stopping in for a jug of milk to run the gauntlet of other products. The goal is to keep the shopper in the aisles as long as possible as that usually equates to stuffed carts and more profits. This is done by strategy not disorganization. Also, be ready to address trends in your placement. Where should gluten-free items go? How about organic? Would dry goods by the pound work? Where should it be placed? Keep an open mind and track success through an honest assessment of sales and do not be afraid to try something new.
With at least one study from a reputable consumer organization indicating weakness on the part of the “W” stores, there may be hope that the trend is changing and local and regional stores may once again be in a better position. This is also backed up by the study. It found that a full one-third of all shoppers in the survey have moved their shopping to a different store from where they were shopping. That means opportunity for new customers and new revenue for you if you attack the weaknesses of your competition. Ultimately, the big box stores will show weakness. All you have to do is be ready to stomp back.