Have you opened up a grocery store, but ended up not making enough profit to cover for rent and staff costs? If the problem is relevant to you, it's time to start promoting. Let's see how you can attract customers to the grocery store. Small grocery stores are finding it harder to survive among giant rivals, such as supermarket chains. But it is possible to compete with them with simple solutions.
How to solve the most crucial mistakes in running a grocery store
Let's start with mistakes that, consciously or unconsciously, you might have made at the start. In order not to ruin a business, you will need to fix them. The faster you do this, the better for the company.
Problem: The store venue is situated in a not-so-right place; the building looks old and unattractive and is difficult to access.
Solution: To promote a grocery store in the wrong place, make a significant overhaul. Make out a driveway, install lights, repaint the walls, etc.
Problem: Employees in the store are rude to customers, trying to sell low-quality goods. Customers go to competitors.
Solution: Fire employees with unprofessional attitudes. Install cameras on the floor. Add standards of serving customers in the employment contract.
Problem: There are expired products on the shelves. Vegetables and fruits are rotten. With high competition, customers do not return to the store a second time.
Solution: Since it is impossible to raise sales of products under such conditions of service, train employees to keep order: incorporate a workflow that requires employees to remove the expired goods from the shelves.
Problem: Sellers cheat buyers by overrating goods and inflating prices. It is impossible to promote a small grocery store in such conditions - information on word of mouth is spread instantly.
Solution: Control cashiers. Arrange regular checks and impose sanctions. Make fine for the first mistake, dismissal for repeated ones. Experienced retail market participants give advice.
How to properly promote a grocery store: recommendations that work
Try methods that have already proven their effectiveness.
Invite customers to tastings
Take several products from the same group and have the customers choose the best one. You will solve two problems: creating an assortment and attracting customers.
To promote a grocery store, select several items from the assortment that are new to the city: an exciting variety of cheese, cookies from a small pastry shop, village milk, etc. Announce the tasting 5-6 days in advance. There are two conditions for success: the product is new; you give it a try for free.
Promotions and discounts
Do not think that regular promotions and discounts will ruin the store. Even if you reduce the price quite a bit, demand will increase. Besides, sales allow you to get rid of surplus goods on time. If you cut the price tag for products whose shelf life is about to expire in 3-4 months, you don't have to throw them out. Another tip on how to promote your business is to develop discount cards for the loyalty program. If a customer knows that he has bonuses in your store, he will come to you next time, not to competitors.
The correct display of goods
Be sure to think about the proximity of products in the store and their location on the shelves. The goal of merchandising is to increase sales. Have you ever wondered why bakery products are at the end of the hall? The goal is simple - to catch a buyer who came for bread for delicacies and sweets. The rule works, so using it is imperative.
Offer the sale of products with delivery to customers’ homes or offices, and make it possible to order by mail/phone remotely. To attract a group of people of retirement age, offer them this service at a competitive price. You do not spend much time bringing food to a resident of the neighboring house, but increase sales and the amount of average check.
Congratulations and notification of the receiving goods
Regular communication with customers will allow you to promote a grocery store in a residential area. Congratulate buyers on calendar holidays, and inform them about the new arrival of goods. To collect contact information, use standard profiles or accumulative cards. To participate in the bonus program, the client fills out a standard form with questions.
If the customer is hungry, he automatically makes more purchases than planned. You can easily create a business successfully by such a simple method as using intense and pleasant aromas: baked goods, such as fresh bread, and other finished products. Sales will increase by 15%. Clients spend, on average, 18% more time in the store.
Large shopping carts
Entrepreneurs who have built a successful retail business have long noticed that sales grow with the average check if you offer customers a more extensive shopping cart. Some stores went further. Now on the shopping floors, there are small shopping carts for children. Their secret is simple. Firstly, children do not distract the parents, making them not rush, and secondly, they make their purchases that were not included in the plans of adults.
Company information on Google Maps
The next way to promote is to add the company to Google maps. Hundreds of customers are looking for store information over the Internet using a PC or mobile device. It's strange not to take advantage of this, especially when the service is free. All you need to do is fill out a few fields in the directory. After the information is moderated, it will be available in a search.
How to evaluate the performance of the grocery business?
For raising revenue in a grocery store, it is essential to know what level it is currently at. How to decipher the leading indicators of a business.
The volume of sales. This is the leading indicator of transactions completed in the store for the selected period. Successful grocery store owners keep records not only in money values but also in the number of goods sold (in pieces or weights). The advantage of this approach is that it is easy to notice when the number of products sold changes up / down without being tied to prices.
Sales per square meter. This parameter shows the income for the selected period, divided by the area of the shopping floor (in sq. meters). To make it easier to do the analysis, let's see an example. Let's say you rent a 100-square-meter room. Revenue for the month amounted to $300,000. Thus, each square meter brought $3000 per month. This indicator is changing every month. If the dynamics are positive, this indicates the success of the business. Otherwise, you need to think about how to promote a grocery store.
Conversion rate. It shows the ratio between the number of visitors and shoppers. Let's say 200 people visited the store in a day; 150 of them made purchases. Divide 150 by 200 and multiply by 100. It turns out that the store's conversion per day was 75%. If you measure the conversion regularly, you can understand in which direction the store is moving and whether competition is affecting your revenue.
Average receipt amount. This indicator is obtained by dividing the revenue by the number of paid receipts for the selected period. The average receipt amount reduces if the discounts are applied. However, it can increase if, for example, you offer customers some goods directly at the checkout. It is quite simple to organize such a system correctly.
The number of returns. This figure is higher in non-food stores. If returns occur at the grocery store, it's terrible, especially in small towns and residential areas, because information about low-quality and expired goods spread instantly. And if you are dealing with returns, it means that your sellers are deceiving customers and do not remove spoiled products from the shelves on time. It's time to take action!
Labor-to-revenue ratio. It is the ratio of staff costs to sales. It's easy to count. Divide the salary of all employees (plus tax and social security contributions) by the monthly revenue and multiply by 100. If the store income is reduced due to growing payroll intensity, review, and optimize costs.
Specific of a grocery store
Every business has its problems. Since it is tough to raise a grocery store without knowing the specifics of an activity, let's see the main nuances.
Daily purchase and receiving of goods
Given the high inventory turnover, dozens of purchases will have to be made daily, and the same number of purchase orders will be processed. In this case, all products must be entered into the automated inventory system. These processes take a lot of time and money if you do not debug the logistics to the smallest detail.
High level of shortages
It is the pitfall of business, which has crushed thousands of entrepreneurs. The problem is related to the theft of buyers and sellers, errors in the receiving of goods, and the work of cashiers. A good Point of Sale system is helping to solve this, along with a system of liability and control equipment (for example, video surveillance).
Expiration date control
Since dairy, baked goods, and meat products quickly deteriorate, it is necessary to establish a control system for expiration dates and timely decommissioning damaged goods.
It would be interesting to know your experience of running a grocery store. You can share it in the comments section.