January 28, 2014

Increase Deli and Bakery Sales and Purchase Frequency Levels

Increase Meat, Deli and Bakery Sales 80% to 200% on promoted items — on high margin fresh items !
 
Prior to the start-up of MSC I worked with one of the highest volume stores from  the highest volume east coast wholesalers- Wakefern.  The store owner wanted to increase sales and average sales per customer levels without promoting “loss leader” type items. 
 
That was early in 2009.  At NGA in February of 2010 I hosted a workshop at NGA on this topic and had the store owner involved in the presentation to show the results of a “real, live” test in three of his stores. 
 
9 WEEK TEST IN 3 NEARLY IDENTICAL STORES 
 
      Bakery Sales increases               Deli Sales increases              Meat Dept Sales increases
   

Red= Digital Signage Store.    Top graph= units sold,    Bottom graph = $ sold 

 
The  store owner?  Harry Garafalo, owner of several ShopRite stores in Connecticut.  Harry agreed to team up with me to present his experience to those at NGA in the workshop.  Here’s a picture of Harry making a donation of $123,000 to the Connecticut Food Bank on behalf of his stores.  He’s a great example of an independent grocer who gives back to his community-   he can afford to since he’s a smart grocer.  
 
  
 
So, what’s the best way to encourage shoppers to buy more on each store visit — but add the challenge of getting them to buy more HIGH MARGIN items on each store visit?  It’s easy to get customers to buy “sale” items that are sold at or below cost.  The task was to increase high margin sales.
The solution?  Make shoppers hungry as they shop.  Make them hungry for items in the bakery, meat  and deli department that were NOT on their shopping list. Impulse items.
This week’s Idea of the Week shows how your store can benefit from the exact same strategy this high volume retailer implemented.
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Let’s look at the results first —- then look at the strategy used to accomplish the results
How did the store owner measure the results in his 3 stores?
1. We used one “live” store who implemented this idea and compared the sales of two other stores that are owned by the same store owner in nearby towns.  All three stores involved in this test had similar sales volumes, similar customer counts, similar store sizes, similar store layouts and similar demographics.  The owner wanted to measure the “live” store’s results to two other store he owns that did not implement the same strategy.
2.  The store owner measured his actual results in all 3 stores over a 9 week period.
3.  The store owner demanded that “NO SALE ITEMS” be used in the test.  He selected 6 items from the Deli, Meat and Bakery department each week that he would promote at “near normal” shelf prices.
4.  At all three stores he wanted customers to buy the 6 items based on appeal (beauty shots featuring the item) not on a sale price.
5.  All three stores sold the identical items at the identical retail prices each week during the 9 week test.  About 60 items in total were used to measure the results.
6.  The two “control stores” used traditional paper signage to promote the item and the price on the display or display tables.  The “test store” used digital signage to promote the same item at the same price.
The only difference between the “test store” and the two “control stores” was that the test store used a digital screen vs. a paper based screen.
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Sales results in sales units and sales dollars:   
 Deli

Unit Lift:                       115% over Control1, 82% over Control2

Dollar Lift:                    121% over Control1, 69% over Control2

Meat

Unit Lift:                       97% over Control1, 62% over Control2

Dollar Lift:                    107% over Control1, 56% over Control2

Bakery

Unit Lift:                       140% over Control1, 255% over Control2

Dollar Lift:                    120% over Control1, 245% over Control2

  

 Conclusion:  Digital signage using appealing movies/photos can motivate a customer to buy more high margin food products on their shopping trips.  In units sold and total dollars sold (in both cases), consumers buy more when they see digital based store signage.
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 How do I do this and what does it cost? 
1.  Buy a LED monitor (most likely a LED TV), a wall mount and a HDMI cable from your favorite electronics supplier.  Here’s a couple of 32″ screens to give you an idea of the cost. At the low end you’re looking at $180 to $229 for a 32″ LED to hang in your store.
  
2. Buy a digital media player that is Cat-5 ethernet and wifi capable.  It needs to had a Quadcore 1GHZ processor, 1 GB DDR3 Ram with two Micro SD card slots.  Needs to be ARM based Linux, have a single HDMI port and, most importantly, needs to be designed as a media player for digital signage.   We have these Linux based computers fabricated for us and they are $500 each.  You need 1 for each LED screen.  No, you can not use one media player for multiple screens – it doesn’t work in high def.  The $500 per media player includes our programming time to set up each media player with an IP address so you can get digital signage content online to the screen.
 This wifi and/or ethernet media player is $500- we can order them for you. It’s an ARM based media player (Linux) and it’s the least expensive and most durable player we’ve found for the supermarket environment. We can program these before they are shipped to your store. You take them out of the box we ship them in, plug in a HDMI cable to your TV, plug in the power supply and the content you’ve selected begins playing immediately.  Once it’s connected you can go online to change your content as often as you’d like – 24 x 7 x 365.  There’s no limit to the number of playlists you may select.
This media player is also wifi and/or ethernet capable.  Most media players you will find online are similar to this media player and they normally cost between $900 to $1200. We don’t recommend buying a media player that has Windows – you’re buying a computer not a media player.  We recommended this particular computer a few years ago but the new ARM based technology allows you to not buy a Windows based computer to run digital signage.
3. You need content.  That’s where we come in.  You can access to over 400 digital signage movies that are in our library for $10 per store per week.  If you have 15 LED monitors?  Doesn’t matter – the total cost, regardless of number of monitors is $10 per store per week.
If you’ll be at NGA in two weeks, come to booth #1110 to see a demonstration. Blaine, Janet and I will be there providing demos during the show.  To schedule an appointment time for your demo, just click on the link below and let us know of a time that works for you on Monday or Tuesday:
4. You need an online system to manage your content.  We offer an online system and hosting for $5 per media player per week.  This provides you with online access to a playlist system so you can select movies to play on your monitors.  You can change your playlist as many times and as often as you wish.  It’s $5 per player per week and you’re ready to roll.
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 How about some sample movies that could be playing in my store? 
We can provide links for you to view several hundred of our 11 second movies that are included in the $10 per store per week subscription.  To give you a general idea, here’s a few examples: