APT CEO Anthony Bruce discusses strategies that leading retailers are using to improve product assortment and merchandising decisions
APT VP Marek Polonski describes real-world examples in which convenience stores used a Test & Learn approach to make more profitable decisions about their labor & operations initiatives
APT VP Marek Polonski discusses how leading convenience retailers are using in-market testing to understand the impact of, and subsequently optimize, new initiatives.
APT President Patrick O’Reilly discusses trends and analytics in the manufacturing industry
Though there is certainly validity in some marketing activities designed to simply build brand awareness, the need to accurately measure all other programs is becoming increasingly important. Unfortunately, a common problem marketers face is proving the true incremental profit impact of their programs. Common “metrics” such as eyeballs, impressions, or redemption rate have typically helped marketing departments determine the success of their campaigns, but they do not clearly show the ROI of their investments. So while some executives will be thrilled to increase brand awareness, analytically-minded executives know that they also have to measure the direct cause-and-effect relationships between their marketing investments and profits. Marketing executives who use advanced data-driven techniques to prove the profitability of their ideas will drive increased trust, buy-in, and budgets from the rest of the c-suite. (more…)
APT VP Marek Polonski discusses important trends and analytics in the grocery retail industry
Jim Manzi, APT Chairman and Co-Founder, delivered the keynote address at THE Tech EVENT for the National Association of Convenience Stores (NACS) to over 400 CTOs, CIOs, and other technology professionals. Manzi explained that robustly using the growing quantity of data (including POS, loyalty, transactions, weather, and demographics) in making business decisions presents an incredible opportunity for growth and profits. Instead of merely warehousing this data, it should be leveraged to understand the overall KPI impact of each business decision, allowing retailers to maximize profitability and mitigate risk. According to Manzi, experimental validation of various business ideas is the new frontier of competitive advantage for convenience stores.
Manzi remarked, “I greatly enjoyed engaging with an entrepreneurial audience at the forefront of Big Data. We are seeing greater participation from CIOs, CTOs, and technology professionals in making important business and strategic decisions across their companies.”
A recent NACS Magazine article discusses steps convenience retailers can take to optimize business decisions by leveraging Big Data. Marek Polonski, head of the convenience retail practice at APT, was quoted on the expanding range of data available to retailers:
“Data is no longer reported just at the total store or category level. Instead, since the cost of data storage has dropped dramatically in recent years (with rapid improvements in POS and storage technologies), it is much more feasible for convenience retailers to collect transaction-level and customer data.”
Polonski also remarked on strategies for maximizing basket sizes through promotions:
“While larger retailers may have access to a wider breadth of data, smaller retailers can use their sales and transaction data to improve their decision-making processes,” Polonski said. The key is to analyze purchasing patterns to increase basket size.
An example: If you discover 80% of hot dog purchases include a soft drink purchase, instead of discounting that combination (margin negative, Polonski said, since it discounts a likely full price sale), “the retailer could attempt to drive larger baskets by discounting a second hot dog with the purchase of a soda and the first hot dog.”
Click here to read more about how retailers can optimize the profitability of each program through testing the impact of each initiative.
Best Buy recently announced that it will install Samsung Experience mini-stores in 1,400 locations, double the number of locations that currently have smaller Apple mini-stores. Store-in-store concepts have been introduced across the apparel industry (for example, Nordstrom’s Topshop boutiques or J.C. Penney’s IZOD shops), but the concept has been less prevalent in non-apparel retail stores. Some large big-box retailers like RONA have attempted to sublet space within their stores as they try to reduce the amount of square-footage of their stores, but Best Buy’s move represents a different strategy.
The Star Tribune reports that Best Buy, “hopes the move will generate buzz and profits at a time when the Richfield-based consumer electronics retailer needs both.” In past blogs, we have addressed the three key questions retailers need to answer to assess the impact of these store-in-store concepts. Namely:
1. Is the new kiosk/sub-store bringing in incremental profits or taking away floor space from more profitable merchandise?
2. Which stores should implement the new store-in-store?
3. What sub-store format is most impactful?
The best way to ensure that a particular store-in-store concept is generating incremental sales is to test the concept in a small group of stores before rolling them out broadly.