Customer feedback is heavily sought after in all industries, and retail is in a unique position in that every transaction is an important data point. In fact, the customer is already telling you what they want to buy. You just have to respond by looking at the data points and implementing the right actions as if they filled out a survey.
Your sales data is a treasure trove of information that you can use to improve your business. If you leverage it to inform your media at the dispenser and other shopper marketing strategies, the historical sales data you already have can help you promote the right products at the right times, increasing sales and overall profitability.
Categories, categories, categories
When you comb through your sales data, you’re looking for trends in product categories. For example, when are the spikes in unit sales of particular categories or subcategories? You should see trends on when hot beverages sell more compared to when energy drinks do well. Or, when do snacks sell more than meals? What trends are there with your grab and go section? Analyzing these trends can help you decide which categories to promote.
If you’re unfamiliar with this type of merchandising, this is a great place to start. As expected, you’ll likely quickly see from your sales data that coffee sales spike in the mornings. And while it’s easy to identify that trend, it makes perfect sense to add a promotion for coffee in the mornings to boost those sales even higher.
Within each subcategory, there are a multitude of products. If you have a proprietary product, you’ll obviously want to promote it for its higher profit margin. If you don’t, promote the product that is most likely to sell with that proprietary product. For example, if you’re going to promote chips and you don’t have your own proprietary chip product, pick a CPG branded chip for a 30-day period, or for two to three promotional periods. Then, transition to a competitive CPG chip product. This will give you more data on which chip products sell best with promotions.
Utilize market basket affinity
Once you better understand your historical sales data and identify what has a high propensity to sell, you can use that information to increase the sale of products and services by using market basket affinity. Market basket affinity just means what products sell together often. Take coffee as an example. You should be able to analyze your sales data and see which products sell well with coffee. It could be bakery items or a grab and go snack. By identifying which subcategory sells well with your anchor product—or the product that is highly likely to sell–you are able to use straightforward peaks in unit sales to promote products that have a high propensity to sell with your anchor product, resulting in the increase of average market basket size. If a straightforward promotion is your junior varsity effort, then this market basket affinity promotion is your varsity effort. It makes greater use of your data for higher impact.
Go beyond dayparting
Your sales data allows you to track transactions with dates and times. This allows you to divide your sales by daypart to better inform your promotions, which is pretty self-explanatory.
Partnering with Shep Digital allows you to take it one step further. Our predictive analytics platform can analyze your historical sales by key consumer buying variables like temperature and precipitation to help you identify how those types of data points impact your sales. This can be especially useful in explaining outliers. For example, if ice cream and candy bar sales are off the charts at a particular store at 3:30 p.m., you may be wondering why. Shep can help you understand that the store is located next to a school, which explains the surge.
You can and should use your historical sales data to help increase sales in the future. By using our technology platform, you can take it a step further to identify nuances in your data by collating with key consumer buying variables, and then use that to create more effective promotions.