Londis retailer Ramesh Shingadia had some scientific help from Unilever to help plan his new store in Southwater, West Sussex.
When Ramesh Shingadia and his family were looking at expanding their store, virtually doubling it in size and adding a lot more fresh and chilled products, they knew that any mistakes they made on the initial store plan could turn out to be expensive.
Fortunately, Ramesh has a long-standing relationship with Unilever by being a member of its Partners For Growth panel, and when he revealed his plan the company offered to help by carrying out a store review.
Nick Widdowson, range and merchandising manager at Unilever, looked after the project. In his 14 years at the company he has worked with a number of larger retailers, looking at range assortment, space planning, merchandising, planograms, shopper marketing and store formats. The company has developed an approach to store layout based on “missions” (food for now, food for later, CTN, top-up shopping), and “mindstates” (how much time shoppers have to spend in store, and how clearly they know what they want).
Widdowson is keen to stress that the team’s work is nothing to do with Unilever’s many brands. “We believe there are 10 key principles of store design. If these are followed, then total store sales go up, and if store sales go up then Unilever’s sales go up.”
He also believes the basic processes are within reach of any store owner. “While we have done a lot of filming, eye tracking, virtual reality simulations and so on with multiple retailers, it is expensive and complicated,” explains Widdowson. “In Ramesh’s store we have been more pragmatic. The simplest way of working is just to watch people.”
So that’s what happened at Southwater. For a day in November 2013, researchers watched shoppers from a distance and recorded how long they were in the store for, where they went and what they put in their basket. The age and gender of the shopper was noted, as was their shopping mission, based on the contents of their basket. Their path around the aisles was tracked on a store plan, and their footsteps colour-coded according to mission.
The resultant heat map provided Ramesh with valuable information to help plan his new store. For one thing, it showed that even though his existing shop measured less than 2,000sq ft, the space was not being well utilised.
Nearly half (46%) of customers went only to the very front of the shop by the till, with less than 3% making it all the way to the back. And while the store had always done well on the important ‘top up’ and ‘food for now’ missions, it was over-indexing on these and underperforming on ‘meal for tonight’ customers, and it is these who are most likely to shop the whole store.
“It was a real eye-opener,” Ramesh told C-Store. “The heat map told us that in many ways we were typical, with most customers using just the front, while the back was lying dormant, so we knew we had to manage the movement of people through the shop. Epos data can tell you a lot, but it is exit data; it doesn’t tell you what people miss. This was analysis of the entire customer journey.”
Unilever made three main recommendations. First, making the aisles wider would improve the customer experience and encourage a longer journey in store. There were parts of the store where shelf heights could be raised to stock more range, but it was also important to keep the front of the store open so that the categories were visible to shoppers.
Meal for tonight was a key, untapped opportunity, so items for this should be grouped more closely with top-up products.
Ramesh also made one more vital decision. The local post office was closing and he successfully applied to have it moved to the new store, as installing a fortress position would give customers another reason to visit the back of the store.
With the new store up and running, the Unilever team returned for a second tracking study in September 2014, to compare the results. The good news is the new shop plan and the addition of the post office increased traffic to the back of the store, with 5% of customers reaching there, and only 24% going no further than the till.
And while food for now, newsagent and top-up remained the top three missions, overall the missions and customer journeys were spread much more evenly. And the key ‘meal for tonight’ shoppers were spending more, putting an average of 4.6 items in the basket compared with just three before, showing that they were shopping more of the fixtures. Overall, customers were spending more time inside the store, up from one minute 23 seconds to one minute 42.
But the research also showed there are still opportunities. For example, only 10% of customers are using a basket, but those who do buy 4.4 items on average compared with 1.6 otherwise. And while the post office has helped traffic, only two out of 10 visitors bought something in the rest of the shop as well (this has since risen to four out of 10).
So Ramesh still has plenty to aim for. “One of the biggest learnings about the refit is that it was only the start of the journey, not the end. Sales are up 20%, but I believe there is at least another 20% to go for.”
To see the video of the impact of Ramesh’ refit, click here.