One major grocery chain is turning its stores “hyperlocal” and allowing each location to adjust products, prices and promotions according to neighborhood demand and needs.
A company representative told retail business publication Drug Store News that the chain’s hyperlocal business strategy will lead to increased sales.
For example, the grocery chain slashed the prices of core produce items. The produce department is a big draw for many customers, accounting for 10 percent of total sales. The change increased unit sales by 300 basis points, according to the article. Through next year, the chain will focus its marketing to attract customers to spend more and attract secondary shoppers to shop more often.
The effectiveness of hyperlocal business strategy will come down to neighborhood retailing. You have to know who’s shopping your store and what types of products they want to buy. This idea of hyperlocal retailing is a return to retailing as it was 50 to 70 years ago: paying attention to your customers and stocking the products that appeal to them instead of looking at a broader state or national picture. You have to understand your customer and your market, and then merchandise, sort and price accordingly. This is where an enterprise resource planning system can be very helpful. It can tell you how many, what sizes and what types of products are selling well so that you can better tailor your buying decisions.
Source: Drug Store News, April 2012