Shoppers asking: Who moved my cheese...and milk, cereal, bread...?In the highly competitive market of grocery shopping,
customer retention is vital. In an industry that reports average profits
of 1.25 percent after tax, retaining existing customers rather than obtaining
new ones (which can cost six times more to attract) is fundamental to
maintain or increase store profit.
The participants were asked a series of questions, including:
What are things that you dislike about your favorite food store? What
are factors that would make you switch to another store? Do you consider
yourself a loyal customer? We discovered that most of our participants are frustrated
when grocers change store layouts. Constant changes and remodels do affect
their loyalty to that store. Loyalty to a store is rooted in familiarity. Consumers
do not enjoy food shopping and want to get it done as fast as they can.
One participant mentioned what he liked most about his preferred food
store was “the familiarity of where things are in the store so I
can get in and out.”
Besides the common frustration caused by layout changes,
this re-merchandising may result in a loss of sales and profit and promote
split-basket shopping from previously loyal customers. Many participants indicated that they shop multiple store
locations, including convenience stores for quick items, even if they
have a retailer that they consider their preferred or “loyal”
store. If the primary retailer moves merchandise and a consumer is not
able to find what he or she is looking for quickly, the consumer often
anticipates being in a competitor’s store at a later date and may
postpone that purchase—causing a loss of sale for the primary retailer.
The “mental map” that customers carry with them
is destroyed in the rearrangement process. This change may be so abrupt
to consumers that it will decrease the likelihood that they continue to
patronize their preferred store and/or elevate a competitor to the preferred
store status.
Large-scale grocers could benefit in creating a stable
floor plan that enables customers to feel confident about relying on their
mental map. For customers of multi-store supermarkets, establishing a
“branded” store layout would reassure them that, regardless
of location, they can enter their preferred store and easily find the
items they need. A participant voiced his frustration about layout differences
between locations, stating: “when you go into a store at a different
location—it’s not the same so you don’t know where anything
is.” Establishing a stable layout both across locations and
within stores will offer familiarity to the customer and enhance loyalty.
With the high cost of obtaining new customers, it would be wise to leave
the cheese, milk, cereal and bread where they are. This article was written by Amy VanAuken and Theresa Monterosso, students in Merchandising Management at MSU. |
Studies
have shown most U.S. consumers do not enjoy food shopping and say leaving
the store is their second favorite thing about it. With this in mind,
researchers at Michigan State University conducted six focus groups with
consumers from the Lansing area to find out if they are loyal or just
habitual shoppers. 
Conversely,
when asked what they disliked most about their preferred store, several
answered: “just when you know the whole store, you walk in and they
have changed it,” and “my number one frustration is when they
move things around.”
Many
apparel retailers, such as the Gap, have profited by making all stores
similar in layout and style. Therefore, the Gap “brand” includes
both products and store environment.