Maximize Retail Profits by Tracking Consumer Buying Habits
Posted by Guest Author on May 6, 2013 in Retail [ 0 Comments ]
Do you know why customers purchase impulse items? Understanding your customers’ thought process is vital to product pricing, placement, and overall marketing. The Journal of Management and Marketing Research states that “product placements are associated with increased purchase intent and sales.”
Consider how many television shows use product placement during the actual program. American Idol is sponsored by Coca-Cola. During the show, Coca-Cola cups are always on display at the judges’ table.
Retailers can use consumer buying habits to facilitate their own product placement and retail strategy. From placing common impulse items near the register to displaying complementary products in the same location, your product placement tactics should always be based on your customers’ buying habits.
Increasing Sales with Similar Products
Watching your customers’ buying patterns can help you identify shopping trends and capitalize on those habits. Online stores are also thriving by promoting similar or complementary products to their customers.
- When a customer shops for a particular item, you can design your shopping cart to suggest similar purchases before checkout.
- You can also have your customers find add-on products when purchasing certain supplies. This is a common practice used by office supply stores.
A news article by Information-Management.com discusses how a particular store started tracking consumer buying behaviors. What they discovered was that beer was the product most often sold with diapers. On top of that, these purchases were made mainly on Friday afternoons by men between the ages of 25 and 35. After learning this, the store placed the diapers near the beer and saw a drastic increase in the sale of both products.
Guide Customers Through Your Store’s Layout
Many customers go to the store in search of just a few items, but they’re often open to buying other ones if they are in the right place at the right time. Placing impulse items near the register can boost sales of those products. In grocery stores, you often find gum, candy, magazines, batteries, and other small items near the register. Business stores, like Staples, often place pens, paper, and company-themed items near the checkout.
- You want to make the shopping experience as easy as possible for customers. The practice of putting similar products next to each other is often used in retail stores based on consumer buying habits.
Keep Track of Inventory
Knowing the pulse of your inventory levels is vital in getting return business and maximizing sales. With consumer spending stuck in a rut since 2008, many stores have cut down on the amount of inventory they keep in-house.
Utilize an inventory management system to stay on top of all your inventory levels. Stockouts will seriously hurt your store as potential customers may go elsewhere for the products they need.
- An inventory tracking system will allow you to stay on top of trends and consumer buying habits – helping you to understand who buys what, when, and how much. The key is to find suppliers who can meet your ordering needs so you can, in turn, meet customer demand adequately.
Data-mining technology is frequently used to determine internal and external factors related to consumer buying habits. External factors provide details on industry competition and the overall state of the economy. Internal factors relate to the price, product positioning, and employee-customer relationships. Use your POS, sales, or other business software to collect information about your customers, sales, and local economy in order to form a strategy for maximizing your retail profits.