CPGmatters: Analysis of Data Underscores Importance of Best Shoppers
Through a special arrangement, presented here for discussion
is a summary of a current article from the monthly e-zine, CPGmatters.
of over two million grocery shoppers by Concept Shopping shows that the top
10 percent of a store’s customers visit the store more than twice a week,
spend over $39 per visit, and represent nearly 40 percent of the store’s total
study also found that these most valuable shoppers tend to remain very loyal
to the store, with 95 percent continuing to shop there throughout the year.
Conversely, only 34 percent of the store’s worst shoppers – those who visit
the store less than once a month and spend only $9 per visit – remain customers.
Shopping’s analysis of the two million shoppers divided them into ten equal
deciles based on their spending levels during a 12-week period. Only 11 percent
of the dollars spent by the best shoppers were on markdowns, making these heaviest
shoppers the most profitable as well. In contrast, over 35 percent of the dollars
spent by the worst shoppers were on sales items, making them unprofitable,
assuming a 33 percent profit margin.
Most retailers have some form of segmentation
or deciling, according to Michael Schiff, managing partner of Partners in Loyalty
“CVS does the deciles and they are probably the
savviest,” he said. “Kroger does some other segmentation. Wegmans is another
good example of a retailer that’s segmenting and trying to make stores more
about the experience than necessarily about shopping.”
“Other retailers know
about segmentation, but whether or not they really act on it is completely
different. I think most of them don’t. If you look at any of the promotions
or anything that goes out to consumers, the vast majority of it is talking
in the voice of that average shopper,” he said.
William Young, vice president
of sales and marketing for Concept Shopping, explained that it wouldn’t be
so bad if the lowest-spending customer shopped elsewhere because they tend
to “cherry pick” and largely buy items on sale. But it would be a major concern
when the best shoppers begin leaving.
“We help retailers look at their loyalty
card data, identify top shoppers who are in decline, and more importantly identify
what are the key categories that signal they are heading to the doors. What
do you need to do to promote those key categories better to those shoppers,”
Questions: In what ways can retailers do a better job reaching their
best customers? Can vendors help?