Tailor your Competitive Pricing Strategies for Emerging Consumer Trends
I was listening to the television the other night and heard a Walgreens commercial. Their tag line was “we carry all of the things you need most.” What caught my attention was that they were not typical drug store items -but items that in the past have been considered traditional grocery SKU’s such as soda, milk, cereal, and even ice cream.
Every retail format is in the grocery business. No wonder retailers are bemoaning soft sales and pulling their hair out wondering where it has gone. IRI reported that the drug channel’s dollar sales growth outpaced supermarkets, and food, drug and mass merchants combined, in all but two of the 20 Center Store categories they profiled in their latest issue.
I was talking to a gentleman from the convenience store segment and asked him what his biggest competitor was in today’s times. He said that their research had indicated that it was also the drug stores-especially with the younger population. He shared no numbers but they are now within their strategic focus.
Staying focused on one more retail type is difficult but seems to be growing in importance. It is important to understand what categories your customers are purchasing in what retailers and who your real competitors are.
IRI also pointed out that there seems to be three shopping trends occurring.
- The first group is buying in bulk to save money on a per unit basis, as well as trips to the store. Who does this well in your market? What are the key items to carry in this area? Pricing these items appropriately is important in order to gain credit for that bulk price perception.
- Others are stocking up on items when they go on sale. Discounts and special offers receiving the most attention are those in categories that make at-home eating convenient.Drug stores are not yet carrying enough variety in the at home eating items-yet. They are discounting heavily though. Promotion planning is taking center stage in all formats and it must be effective in creating sustainable traffic and measured accordingly.
- A third shopper group is sticking with a consistent budget, opting for smaller basket sizes and more frequent visits.Who is top of mind with best price for the dollar in your market? How do I manage my margin mix in order to attain this perception?
Lots to think about! What other formats are creating an issue for you in sustaining sales? The Revionics team is in the thick of these questions everyday and would love to hear your thoughts and ideas.