The latest results from the Cash and Carry Customer Tracking Programme show there are opportunities to develop and grow category sales by listening and reacting to customers.
Thirty four per cent of customers (up from 31% in 2003) said they failed to buy an item or product that they had arrived intending to buy, with “out-of stocks” given as the main reason for failed purchases.
Tom Fender, managing director of him! says: “This demonstrates that failed purchase levels are increasing year-on-year with the main cause still availability and I suggest that cash and carry operators introduce regular availability audits to help solve this problem.”
Fender also believes that category visibility, accessibility and clear signage are important areas for operators to focus on to help some customers find the things they want to buy on each shopping trip.
The products that customers failed to buy were in the following categories: confectionery (29% said they failed to buy a confectionery item); soft drinks (18%); fresh products ie milk, bread, fruit and vegetables and chilled (16%); beer (14%); household items (10%); petcare (8%); crisps and snacks (7%); cigarettes (4%); with other items accounting for 28%.
Moreover, only 10% of those who said that they failed to buy bought something else as a direct replacement. “This means that a lost sale really is a lost sale with fewer customers buying alternative products,” adds Fender.
Third on customers’ lists of failed purchases are fresh products. Fender believes that “fresh” holds a clear opportunity for cash and carry operators to improve and develop their offerings. This, he says, will in turn help satisfy the needs of independent retailers in a category which is crucial in driving footfall and basket spend.
Cash and carry customers arrived at depots intending to spend £940 but left only spending £910 on average – a £30 slippage. Fender says this £30 might not sound much but this equates to approximately £5,000 worth of lost or potential sales per customer per annum for cash and carry operators.
Customer spend specifically on certain categories also slips from intentions. Retail cash and carry customers arrived intending to spend £400 specifically on beer but only spent £350 on average – a 14% spend slippage or lost opportunity within the beer category. Similar opportunities exist within cigarettes, confectionery, petfood and bread categories.
Awareness and recall of cash and carry promotions is also patchy – one in two customers buying beer said they noticed a beer promotion. Only one in three customers purchasing confectionery could recall a confectionery promotion.
Why? Are cash and carry promotions turning into wallpaper for customers? Are they relevant to the customer? Suppliers and operators have a clear opportunity to improve the communication of in-depot promotions to drive sales and to satisfy the needs of the end consumer (ie shoppers at independent retailers).
Approximately one-in-four cash and carry customers say they also use supermarkets to source goods to re-sell in their store. Soon him! will be asking customers what products they typically buy when sourcing goods at supers for re-sell and how often they visit. However, the primary concern is that sales are being lost and/or diverted away from cash and carries in some instances.
Four in five independent retailers had a shopping list with them and him! is keen to find out what, if anything, prompts customers to buy something that is not on their prepared shopping list. We will soon be asking customers whether they bought something on impulse, and the reasons why, to find out which operators are best at driving impulse sales so they can transfer best practice across the sector.
Finally, when talking to customers him! finds that there are significant sales opportunities across certain parts of the day and week at cash and carries. We see lost or potential sales opportunities in the early part of the mornings and at weekends in a number of categories. And customers shopping in the early mornings and at weekends give their cash and carry lower ratings for availabilities.
Again, him! thinks it’s important for operators and suppliers to work together to maximise the potential of these exciting sales opportunities to better satisfy the needs of independent retailers and their customers.
* Harris International Marketing, the consultancy which carried out the Cash and Carry Customer Tracking Programme looking at customers behaviour in depots, has been rebranded as him!, with the new logo also appearing in a speech bubble to highlight the need for better communication and the added strapline of “turning answers into action”.