Convenience Store News - May 2018 - 34

SMALL OPERATOR

Leveraging Category Management to Provide Differentiation
Develop a simple store strategy to create the foundation
from which you make decisions
has been evolving and changing over the past few
years. Your competitors now aren't the
same ones they have been in the past;
small stores are the brick-and-mortar
stores of the future; competition has
increased and become much more
aggressive; and every day, we hear about
more disruption happening in the online
retail space and in omnichannel.

THE WORLD OF RETAILING

By Sue Nicholls,
Founder & President,
Category Management
Knowledge Group

As the retail industry continues to become
more challenging, and as stores try to
differentiate themselves from their competitors, what can you do better to compete in
this new and changing world?
The opportunity is to focus on and continue
to meet the needs of the all-important
shopper within your store. By considering
different factors associated with your
unique store, you can develop a simple
store strategy that helps create the foundation from which you make decisions.

2. Define your target shopper groups
Saying "everyone shops in my store" isn't
good enough. There are many sources of
information that will help you define your
target shopper groups, including: your
headquarters or wholesaler; the salespeople/
distributors that call on your store; in-store
observations; in-store surveys; and/or census
data based on the zip code for your area.
Who is it that you are trying to attract
(and keep coming back) to your store? As
an example, you may identify that one of
your target shopper groups is dual income,
no kids, well-educated and focused on
a fitness and healthy lifestyle. You may
have come to this conclusion from seeing them come into your store, coupled
with the fact that there is a fitness center
across the street from your business, and
many of them visit to buy meals after their
workouts. They are hungry and looking
for quick, fresh and healthy meal solutions
when they come into your store.

A Clearly Articulated Store Strategy 3. Determine your most important categories
When I refer to "store strategy," I'm
talking about the foundations from which
your store runs. At some level, as a small
operator or store manager, you need to
be aligned to strategies developed at the
wholesale or corporate headquarters level.
But there are still many decisions that need
to be made in your store. Think of these
strategies as the rules and principles from
which your store runs.
Your overall store strategy should consider
the following:
1. Define your overall services
They may be "low price," "exceptional
customer service," "broad product assortment," "educated and knowledgeable staff,"
"quick and convenient," "high quality,"
"local" or "fresh" - or a combination of
these things.

Determine your "destination categories"
based on the largest volume and profit
categories plus consideration of your target
shopper. There may be some categories
that aren't in your "Top 5" for sales, but that
are very important to your target shopper.
4. Define your pricing strategies
Proactive pricing maximizes value to your
shoppers and improves customer satisfaction. You need to develop regular pricing
strategies that don't just focus on margin,
but also ensure you maintain competitive
pricing - particularly in those categories
you defined in Step 3.
You can do this by doing regular price
checks at competitive retailers around your
store to ensure your prices on your most
important categories are competitive with
them. Consider competitors with a similar
format to yours (who are trying to attract
the same shopper with similar store trips).
So, other small stores like convenience
stores and gas stations.
5. Define overall assortment strategies
Making decisions about product

34 Convenience Store News C S N E W S . c o m


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