If I’m honest, I’m a little confused. A little confused on the following issues. First, we know that out-of-stocks remains the single biggest reason why retailers fail to buy an intended item in a cash and carry. But I can’t quite understand why no one really knows the true availability of products in cash and carries. By true availability, I mean on-shelf availability, with the product accessible for retailers to buy right here, right now.
The only way this true availability can be identified is to conduct independent branch audits. But until these audits are completed, no one knows the extent of the problem … and if you don’t know the scale of the problem, can it truly be conquered?
All the evidence suggests that product availability is as big an issue in the cash and carry wholesale industry as anything else. Or the perception of poor availability is an issue. Which leads me to wonder how long it’s going to take before a cash and carry operator is going to turn the negativity of availability into a positive marketing opportunity by introducing an availability guarantee to its customers. Just think of the positive publicity waiting for the first cash and carry operator to introduce such an initiative.
Another confusing issue is the role of promotions in cash and carries, which is not clear. Do they exist to drive incremental purchases, to offer retailers choice, to improve a chain’s price image, to help the wholesaler’s bottom line … or do they exist because they’ve always existed and it’s easier to continue the status quo rather than question the need for them in the future?
Has anyone tried to measure the true return on investment for promotions, by factoring in the time invested by supplier and operator head office executives in negotiating the promotions, and frontline branch staff to implement them? Does it seem right that branch staff can introduce and remove up to 1,000 promotions per month and for only 40% of the category customers to notice them? Does that sound right?
Wouldn’t everyone benefit if fewer promotions took place during each period, but with greater focus on each promotion in terms of implementation, execution and customer awareness to help achieve greater sales uplifts?
Another area that could do with an explanation is depot layout. I am not sure why cash and carries are laid out as they are currently. I haven’t seen any work to understand traffic flows, category adjacencies and missions, but I wonder whether dedicated zones within cash and carries could prove useful to retailers. Watch this space – we’ll be undertaking such a study in 2006.
Then I have a question regarding cigarettes. The top cross purchase with cigarettes is confectionery. Is there any reason why tobacco rooms couldn’t have a confectionery promotional stack in them to help drive impulse sales?
I also wonder why only 16% of independent retailers have given more space to chilled products in their stores in the last year when we know that many of them were starting with very basic small chilled ranges in the first place.
I think it’s good to wonder why once in a while. If we always do what we’ve always done, we’ll always get what we’ve always got…
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”.