Enclosed is the 2nd of 4 articles of
SIRS Shopper Insights & Retail
Solutions. These articles take you
through 10 Factors that some of the most
successful merchants have focused on to adjust to
today's new Shopping Value Equation caused by a
seismic shift in consumer demands &
expectations resulting from the current economic
upheaval. They also happen to be some of the
most common areas where merchants who DON'T get
credit for Value fall down. These 10 Factors must
be addressed in the Value Improvement Process for
it to work.
II.
STRATEGIC AREA: PRICING STRUCTURE... Meaningful
Differences (Perceived vs. Real) to Targeted
Consumer Segments &
Situations
The most
successful merchants don't necessarily have the
lowest actual prices (based on full Market Basket
Price checks). But they do have a clear
handle on the following 4 key factors
comprising a major part of their pricing
structure relative to competition & the impact
they have on their Targeted Shoppers in
predictable "where to shop" situations -
by category. And they do
make it easy for price-sensitive shoppers who
really want to save money to actually do
so.
They also recognize the different
paths they need to take if 1) their prices are
ACTUALLY HIGHER than competition or 2) their
prices are ACTUALLY LOWER but they aren't getting
credit they deserve.
Answering the
KEY QUESTIONS after each Key
Factor will allow you to create a strong
foundation with four important factors influencing
your Pricing Structure - an area that has to be a
major part of any value equation. Without
addressing the Pricing Structure Factors below,
you cannot have a strong Value
Proposition.
Key Factor #4: Lowest Total
Food Bill Position: Price Image vs. Price Reality
by Major Category among All Potential
Consumers.
KEY
QUESTIONS: Are you getting the credit you deserve
for the prices you have? Which retailers do the
best job of communicating the lowest total food
bill? Why? What do they do that you
don't? How much higher or lower do different
shopping segments think your prices are on the
items they consume than competitions'? Are
they right?
Key Factor #5: Weekly
Specials Image: Right Product, Right Price &
Right Quantities.
KEY
QUESTIONS: What messages are your weekly specials
communicating? To which shopper targets? Which
& how many of your items are building your
Brand Image, Value Position, Creating Traffic,
Influencing Your Shopper Targets? Do they
support a total savings message by passing along
good deals on meaningful items or do they only
convey how high your regular prices
are?
Key Factor
#6: Pricing Schemes: Variety, Credibility
& Impact.
KEY
QUESTIONS: Which pricing efforts are having the
greatest impact? Are they paying off? Which
ones are NOT - and just causing wasted gross
profit dollars? What categories/items have
the greatest impact? Which provide value
item alternatives for substitution? Are you
using your company's buying expertise and clout to
secure "good deals" for shoppers outside of your
core departments?
Around the World of
Retailing:
The
Vault in Cashel Mall in Christchurch was filled
with beautiful merchandise from New Zealand as
well as with international arts and craft items
not just for decorating your home but for
decorating your life. The unique merchandise
is matched by an otherworldly store design and
lighting effects. The store is so enchanting
with the distinctive and odd shaped displays and
differently merchandised products that it gives
you the feeling that you are either Alice in
Wonderland after a conversation with the
Caterpillar or Michael Phelps after a conversation
with the police. 
