Shopper Management: The Better Way to Center Store Reinvention

Over the course of time, many grocery retailers have defined themselves by their perimeter. But that's not so true any more. Today's progressive grocers are going beyond their perimeter to leverage key center store categories with similar innovation, excitement and careful attention to their consumers' needs. Their objective is to create the best in-store experience possible.

To plot this course to center store reinvention, and make their focus on core center store categories such as pet, baby and family meal solutions such as breakfast more meaningful, today's retailers are deploying a relatively new analytical tool: shopper management.

As defined by Nielsen, the shopper management concept asks the retailer to identify the shopper by segmentation, figure out why and where they shop, as well as understand what influences them and how they respond to promotion, assortment, pricing and other retail tactics. Part and parcel of this is a full understanding of mission-based shopping.

Nielsen sees shopper management as an eight-step process for retailers — from defining an objective to adjusting strategy and execution. One of the key steps is the third one: create and understand shopper segments.

In many ways the pet department is an ideal center store category to begin deploying shopper management. Says one industry participant: "Approximately 65 percent of the households in America have pets, for which there is an incredibly powerful emotional attachment  — pets are part of the family in many cases — and something like half of a grocery store's regular shoppers never even walk down the pet aisle, which is a huge missed opportunity, since the need to buy is certainly there. Segmenting those customers and really understanding what they want is vitally important to building a new, shopper oriented pet 'department' to help re-energize the center store."

Shopper management segmentation opens up a myriad of options. It's up to the retailer to determine the shape of demand, and there may be five or six segments they have to define. Urban dwellers look at, and buy for, pets differently than suburbanites. A shopper's dog may be a watchdog or a pampered family pet. This and a series of other questions help the retailer tailor the section to the market in which the store is located. This analysis may result in a section heavily oriented to treats or a smaller section to fit local demand.

Asking the right questions is vitally important. Center store categories can be extremely powerful so it's critical that they be really relevant to shoppers. Many of the key categories like pet are heavy-duty traffic generators that drive trips.

For example, the pet food household penetration is nearly 70 percent, and shoppers purchase an average of $188.41 annually, according to Nielsen, one of the highest levels in the store. HBC, another key center store category, has a 99.8 percent household penetration.

Pet food's purchase cycle is 16.7 days, so these shoppers are back in your store every two weeks, and 91 percent are repeat buyers. HBC has close to 100 percent repeat buyers.

Understanding how these shoppers purchase categories such as pet through careful application of shopper management can help reinvent your center store to help increase sales, profit and customer satisfaction. This type of focus helps make the in-store experience the best and most effective it can be.

A Free Resource for Retailers

Learn about shopper management and how it can be applied to center store by downloading Shopper Management: Analytical Framework for Customer-centric Marketing, from Nielsen and Nestle Purina. Use the form below to download your copy...

Coming In Future Tips:
Find out how shopper management and an understanding of mission-based shopping can reinvent one of center store's core categories, the pet department.