STORES - September 2010 - (Page 48)

NUTS AND BOLTS / CUSTOMER CENTRICITY “The importance of fresh Milking Dairy BY CRAIG GUILLOT airy accounts for 19 percent of an average supermarket’s profit while taking up just 3 percent of store space, according to the Willard Bishop Store SuperStudy 2009. It generates more than 2.6 times return on space than produce and 6.2 times higher return on space than grocery in general. With performance like that, it’s no surprise that many retailers are looking for ways to reinvent their dairy departments. D Dairy Management (DMI), which supports the Innovation Center for U.S. Dairy, recently released a 24-page guide to help retailers reinvent their dairy departments. The Dairy Department Reinvention Activation Guide is the result of more than three years of research by DMI, Kraft Foods and Dannon. Since 2006, the coalition analyzed 343,000 shopping trips, audited 22,000 retail grocery stores and spoke with 2,500 consumers. With milk penetrating 96 percent of U.S. households and acting as a trip trigger that often leads consumers to the store, putting a focus on dairy can be a great way to increase profitability. Rebecca MacKay, vice president of 48 STORES / SEPTEMBER 2010 sales and marketing for DMI, says extensive store audits and customer interviews helped the coalition develop a set of best practices. Putting those practices into play in tests at more than a thousand stores nationwide, DMI was able to incorporate shopper insights into a concept that would work in the retail environment. “The beauty of the guide is that it is generic enough that it can be adapted to any retailer’s go-to-market strategy and any retailer’s store format,” MacKay says. “It can help them leverage their dairy department.” Aligning with shopper needs drives store loyalty, which increases shopper perceptions and can lead to increased sales. Pre-reinvention and post-reinvention surveys showed dramatic increases in shopper perception of things such as layout and odor. Average items purchased also increased from 1.4 to 1.8 per shopper transaction in reinvented stores. At a time when retailers are trying to squeeze every last ounce of profitability from their floors, relatively minor changes in a dairy department can have a big impact, especially for large chains. The coalition’s research found that removing underperforming SKUs and adding 24 feet of space to the dairy department can increase net profit by as much as $821 per week. That translates to an additional $43,000 in net profit annually. Listening to the customer “Our recommendation is that space for dairy in general should be increased and is already underutilized,” MacKay WWW.STORES.ORG for All it’s Worth Department reinvention, expansion can boost overall sales dairy products to customers is evident in their shopping practices. Customers tend to observe the expiration or ‘best if used by dates’ before making their selection.” – Maria Brous, Publix http://WWW.STORES.ORG

Table of Contents for the Digital Edition of STORES - September 2010

STORES - September 2010
Table of Contents
Editor's Page
President's Page
Retail People
Favorite 50
Retail Showcase
Concept2Watch
Customer Retention
Social Shopping
Sustainability
Gift Cards
Business Intelligence
Networking & Communications
People
Customer Centricity
Payments & Credit
Virtualization
Return Fraud
Green Issues
Software
ARTS Update
Point of View
NRF News
Retail Industry Calendar
End Cap

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