Actionable Insights From APT's Retail Practice

Is Your Limited Time Offer Profitable? Should it be Extended?

April 24th, 2013 | Posted by CCorman in Restaurants - (Comments Off on Is Your Limited Time Offer Profitable? Should it be Extended?)

A recent Businesweek article talks about some interesting menu items which have made their way onto select restaurant menus, often for a limited time. Though limited time offerings (LTOs), such as glazed donut sandwiches, pizza with a cheese pocket crust, or the famous McRib, often garner media attention, understanding whether they are truly profitable can be difficult. Using in-market testing to answer the following questions will help solve this challenge: (more…)

How to Retain Customers While Closing Branches

April 24th, 2013 | Posted by Jatin Atre in Financial Services | Uncategorized - (Comments Off on How to Retain Customers While Closing Branches)

“How to Retain Customers While Closing Branches,” a byline from APT SVP Will Weidman, was recently featured in American Banker. Click here to read more.

Should You Implement a Guest Loyalty Program?

April 11th, 2013 | Posted by CCorman in Marketing & Media - (Comments Off on Should You Implement a Guest Loyalty Program?)

FSR Magazine recently published an article by Jonathan Marek, APT SVP, about strategies to consider both before implementing a loyalty program and once one is in place. Here is the link to the article:

Leading Retailers are Testing New Ideas in Smaller Spaces to Increase Sales per Square Foot

April 2nd, 2013 | Posted by Carter in Uncategorized - (Comments Off on Leading Retailers are Testing New Ideas in Smaller Spaces to Increase Sales per Square Foot)

Rents are rising, and some retailers are struggling with how to increase their sales with limited store space. The key to success with these stores is maximizing space productivity. It may seem easy at first: retailers can simply increase prices and the amount of merchandise, while decreasing store size.  However, lessons from the leading retailers measured by sales per square foot would say otherwise.

Apple, Tiffany & Co, Lululemon, and Coach are all noted for their sleek, uncluttered store formats. They also top USA Today’s list of the top 9 retailers, based on sales per square foot. What sets these companies apart from all others is their unwillingness to accept the status quo.  Even after topping Tiffany & Co, which had the highest sales per square foot for years, Apple continued to reinvent and test new store formats. Their latest in-store experience includes iPad sales stations, called “smart signs,” which enable customers to tap a button to ask for help.

The constant drive to increase space productivity has propelled Apple, which now generates over $6,000 in sales per square foot, to the top of USA Today’s list. For reference, big box stores traditionally generate sales of $250-$350 in sales per square foot per year, and second-place Tiffany & Co. had $3,000 in sales per square foot.

While Apple puts all of their products on display to increase ease and accessibility, True Religion takes a different approach. True Religion displays different styles of Jeans on a single wall or shelf in extremely limited sizes, often only a single size. Sales associates help customers find their preferred style in the right size.

While there is no single formula to successfully increase space productivity, there are multiple levers retailers can pull in order to do so. Retailers can adjust their pricing strategy, increase transaction size or numbers, or test new store layouts to increase sales per square foot. No matter which approach they take, these retailers need to test their new initiatives to determine whether new business programs have the desired effects on their particular customers.


First, retailers can determine how to optimize promotions, pricing, and product placement in order to shift customers towards higher priced and higher value products.  Retailers often test different promotional strategies and levels of discount in order to see which offers customers respond to best and ultimately which offers will be most profitable for the store.  Other retailers are decreasing initial price points in order to find ways to sell high ticket items without being as promotional.  Tiffany’s, ranking #2 on the list, sells over $13 M per store annually by maintaining a focus on high-ticket items.

Transaction Size:

Retailers are also finding the best ways to increase customer basket size. Leading retailers are promoting products with high loyalty or those associated with larger basket sizes. Stores like Lululemon are demonstrating that you do not have to sell big ticket items, like computers or jewelry, to maximize sales per square foot. Instead, Lululemon has instituted programs to increase basket size and number of transactions by focusing on customer loyalty. For example, Lululemon provides free yoga classes during traditionally slow business hours to bring customers back into their stores. Their focus on yoga accessories and product placement increases basket size, as well.

Coach has increased space productivity by selling new types of merchandise, like shoes and accessories, as add-ons to their famous handbag collections. Additionally, eliminating under-performing products can focus attention on higher-value products. Transaction level insights can identify products with lower productivity, low customer loyalty, or low attachment rates.

Store Layout:

Store layout can also impact customer purchasing behavior; optimizing layout and signage can maximize attachment rates and add-on purchases.  Basket level data can identify items commonly sold together, and retailers can leverage that data by maximizing adjacencies in stores.  Retailers, especially those in mall locations, can leverage front-of–store signage to take advantage of high trafficked locations to get new customers into their stores.  Once in the store, product placement and in-store-signage can influence a customer’s path through a store and encourage add-ons of high-margin items, like accessories.

Whether by refining pricing and promotions, store layouts, or signage, retailers have a great opportunity to leverage historical data in order to learn more about their customers’ purchasing patterns.  With enhanced customer and transaction level insights, retailers can continually find ways to improve their in-store productivity.