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1 Active Retailing in a Self-Service World Herb Sorensen, Ph.D., Scientific Advisor TNS Retail & Shopper Practice “The Amazonification of Walmart”

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Presentation on theme: "1 Active Retailing in a Self-Service World Herb Sorensen, Ph.D., Scientific Advisor TNS Retail & Shopper Practice “The Amazonification of Walmart”"— Presentation transcript:

1 1 Active Retailing in a Self-Service World Herb Sorensen, Ph.D., Scientific Advisor TNS Retail & Shopper Practice “The Amazonification of Walmart”

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3 3 The Holy Grail – Active Retailing  To know exactly what each shopper wants, or may buy, as they come through the front door.  To deliver that to them right away, accepting their cash quickly and speeding them on their way.

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5 5 Personal Selling Fundamentals  Determine what people want  Narrow their choices to a manageable few  Make the process easy  Upsell them on related items  Close as quickly as possible

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7 7 Massification  Mass production – factories  Mass distribution – supply chain  Mass retailing – self-service  Mass communication

8 8  Early P&G Soap Opera Ad

9 9 80 years later

10 10 Mass Media Fragments

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12 12  In 1995, 3 commercials reached 80% of women 18–49 years of age and  In 2000, it took 92 commercials

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14 14 Rank of Single Items Contribution of Single Items to Total Sales The L - O - N - G Tail 500 out of 32,000 items contribute 25% of total store sales The BIG Head Item Share (Count) for the Total Store

15 15 Focus on the Few Products... Think About Those few Items, NOT Categories... that Sell the Best! (The BIG Head) 1,000 SKUs # By Count $ By Dollars

16 16 Item Management... “ Well, we have never been a category company – that was decided long before I came... We look at it item by item. That doesn’t mean we don’t have a fair representation with a category. But usually it’s only the top five or six items in that category, and we look at them as items ”... $1 million per day in their top store! Charlie Burnett, COSTCO

17 17 Focus on the Few Products that Sell the Best! (The BIG Head) 300 items dominate total store sales. 30 items dominate total category sales 3 items dominate total brand sales Typical household buys only 300 – 400 items per year! Half of those, 150 – 200, they buy regularly. Sell them what they are buying.

18 18 Item Management... “ So our traffic is up, our sales are up. We’re in the 3% range right now over last year ”... March 2010, Drug Store News Charlie Burnett, COSTCO

19 19 Call out the top sellers No technology!!!

20 20 Total grocery sales up 4% for the 1 st quarter 2009 over 4 th quarter 2008!!! ItemLift After “Top” Sign Corona 16% Angel Soft TP 67% Store Brand Butter 324% Ice Cream 116%

21 21 For the Brand...

22 22 For the Brand...

23 23 “Internet” in the Store?

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26 26 Personal Selling Fundamentals  Determine what people want  Narrow their choices to a manageable few  Make the process easy  Upsell them on related items  Close as quickly as possible

27 27 Herb Sorensen Stay in touch with our cutting edge retail and brand supplier research program and commentary m Read the Views (and subscribe! ) Read my RetailWire blog! Buy the book! Receive notices on Twitter!


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