Encouraging consumers to increase basket size

Since the beginning of the super retail grocery store - the supermarket - retailers have been designing stores to entice shoppers to spend more. That's why they put the essential food basket items at the back of the store, things like milk and bread.

It's to make you walk past all the things you didn't have on your shopping list to entice you to buy more. And it's all about category management and the ways stores have been designed since the boom times of the last century which saw the rise of the big retail chains.

Despite all our technology advancements this century and increased leverage at the hands of consumers, many retailers haven't deviated from this model or tried to make stores more attractive to the average shopper to meet consumer needs - rather than just the retailer's bottom line.

Forbes.com reports that a marketing professor in the United States has done research that may make retailers change how they have been operating for decades. The study found that the average shopper spends $1 above their planned budget for every additional 20 paces they walk in the store.

Prof Jeffrey Inman from the University of Pittsburgh Katz Business School conducted his study using the following, more technologically-advanced tools at his disposal: store coupons delivered by smartphone; and RFID tags latched onto customer backpacks and clothing to track consumer movement through a store.

His core finding in the report came from interviews with shoppers before they went into a store to make purchases as per their shopping list; RFID tracking to trace the shopper's movements through a store; followed by an analysis of the till slips afterwards.

As Forbes.com reports, one of the most "significant" findings was in reference to couponing. With all the data from customer loyalty programmes available to retailers, it is inexplicable that retailers are not targeting consumers more efficiently with savings and coupons, and directing in-store traffic more effectively.

Retail renaissance

Inman divided his research group into two:
1. Those consumers who had received a coupon for a product situated on shelf near where they would have walked in store.
2. Those consumers who received a coupon for a product further in store, which forced them to meander on a longer path through the shop.

The research proved that retailers are correct that in forcing consumers to walk a longer path to find what they are looking for results in more impulse buys: $21 more was spent by those who were forced to walk further than they had planned to; and $13 more was spent by those who stuck closer to their routine - a 61% difference.

It is pretty logical that this is what would happen, but what is illogical is that many retailers haven't yet rolled out "meaningful plans to guide consumers through their stores in the direction the manager wants". I raised the lack of innovation in store in a previous column 'Shopper marketing: the new mass media'.

Reasons for this include privacy concerns over customer data and the fact that retailers continue to struggle with getting their apps up to speed or other technologies mastered to reach consumers. In South Africa, chains like Shoprite have rolled out mobile couponing very successfully, bundling basic foodstuffs together to provide airtime rewards to consumers, and such like.

The research showed that consumers have shown a willingness to sacrifice some privacy in exchange for savings and convenience, as Forbes.com reports and in global recessionary times where consumer spend is down across the board and margins are being squeezed, retailers should be looking at harnessing any and all technological advantage to steal a march on their competitors.

For the professor, it boils down to basics to increase revenue for retailers and brands alike: "Increase basket size," Inman advises.