How retailers can create an efficient and tailored in-store experience

11-Jul-2023 - Last updated on 11-Jul-2023 at 13:32 GMT

Image source: Jacobs Stock Photography Ltd

By leveraging foot-traffic data, retailers can understand how their consumers are spending time in-store to develop a personalized and streamlined shopping experience.

As brick and mortar continues to drive business growth, retailers have the benefit of utilizing foot traffic analytics to understand how consumers are shopping and spending, according to a recent placer.ai white paper; while brands that do not have a standing store can benefit from leveraging third-party foot traffic analytics to improve visibility and operations.

Particularly during economic uncertainty, understanding these consumer segments will help consumer-facing companies tailor product offerings and promotions.

“By diving into consumer characteristics and habits on a store, chain, or regional level, retail stakeholders can gain a better understanding of consumer trends and segments and stay ahead of the competition,” the paper stated.

Unsurprisingly, inflation-driven prices resulted in a bifurcation of shopping habits between lower and higher-income households. Where lower-income households are shopping with value in mind at more than one retailer, higher-income households are shopping at mid-range retailers, including specialty grocery stores. The latter can be attributed to the location of these stores, typically in suburban areas, which saw more migration from affluent families over the last few years.

As the paper analyzes, “In a period marked by economic uncertainty, understanding which audience segments remain willing to spend – and which are looking to cut back – can be crucial for consumer-facing companies.”

Understanding the post-work shopping trip

According to the American Opportunity Survey by McKinsey & Company, 58% of Americans reported having the opportunity to work from home at least once a week while 35% reported having the option to work fully remote—which has ultimately impacted retail behavior, with many retailers focusing on the after-work shoppers.

Placer.ai analyzed CVS shopper visits between 6 an 9 PM, which grew from 16.5% in Q1 2021 to 19.9% in Q1 2023. The percentage of shoppers visiting CVS from the workplace grew 3.9% in the same period and the share of shoppers returning home after a CVS visit increased 5.5%--highlighting pre-pandemic shopping routines that complement “partial return to the office.”

This suggests that retailers seeing a spike in post-work foot-traffic have an opportunity to curate promotions and offerings that align with consumers who are making a stop on the way home.

Discount stores and private label, consumers are ultimately looking to save money

As previously analyzed in FoodNavigator-USA, “discount retailers are benefiting from a shift in consumer behavior” due to the rising cost of groceries.

More common in rural areas, Dollar General has expanded into urban and suburban areas (1,000 new stores in FY ’23), a strategic move that acknowledges value and convenience-driven shoppers (who are more frequently shopping in the evening) by offering kitchen staples and shelf-stable foods and produce, as well as publishing dinner recipes on its website, according to the white paper.

Shoppers (55%) are also turning to private label for affordability, quality, taste, perceived health benefits and sustainability, according to FMI – The Food Industry Association’s 2022 Power of Private Brands report.

Further, for retailers’ private label products, leveraging their existing supply chain and distribution networks is a built-in competitive advantage, particularly in response to product shortages and inflationary price pressures.