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How To Compete Against Big-Box Retailers
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Article 7: Make Technology Your Partner In Success
The big-box stores are famous for their use of technology to control inventory. There’s no doubt that computerized tracking of individual merchandise items, from vendor to distribution center to store, provides the big boxes with the capability of offering the lowest prices to the public.
Your own store, though, can use technology to compete effectively against the huge chains. And while computerized inventory tracking is certainly part of the picture, it is not the critical part for the independent operator.
“It’s a funny thing about technology,” says Jim Dion, president of Dionco Inc., a Chicago-based retailing consulting firm. “While it’s a boon to a lot of retailers, it only works when you know how to use it.”
Technology helps independents, says Dion, in understanding customer shopping patterns. That can help the retailer reach decisions that increase sales. Dion points to these examples of vital questions computers can answer.
- How many people who buy product One are also buying product Two? The answers will help you arrange merchandise on the shelves to increase sales.
“One grocery found that 80 percent of people who were buying diapers also bought a six pack of beer,” says Dion. Apparently, husbands were using the need for more diapers as an excuse to visit the store. “This discovery led the grocer to position the beer near the diapers.” That further increased sales.
- Who are our best customers? Where do they live? What are they buying? “If I have a customer who buys a particular brand or product and I get another one in, I can call that customer or send a postcard,” says Dion. “That kind of proactive marketing is really powerful.”
- What days of the week and times of day are people buying the most? The answer can help you adjust store hours and staffing.
- What price points are most popular and most profitable? The answers can help you sharpen your pricing.
As these examples show, technology can be a partner in profit. Says Dion, “Technology really helps the independent businessperson proactively market to customers.”
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