Strategic Marketing in Retail

Case example of how strategic marketing helped a small grocery store revamp itself.

This week’s newsletter is dedicated to one project wherein I was involved in imparting strategic marketing direction a couple of years back.

I use this case in sessions wherein I tell my audience about how to use marketing strategically in retail.

Subject – A neighborhood supermarket. (a small-medium retailer)

Target audience market –

A Residential and commercial vicinity with lots of offices & colleges and residences in Dubai.

?Issues –

Facing competition offering low prices, Questions at owner’s mind-

Should increase or reduce prices, should focus on adding organic food staples to earn margins, should keep cheaper snacks for the college-goers, open 24 hours, should distribute flyers, and invest more in marketing?

Methodology :

Listening and going over the site and looking at the problems, we identified the challenges that are described above.

Our foremost activity was to spend time at the store observing the customer profile, two segments came out prominently – Office goers and college goers, residents. Peak shopping hours were early morning 7 am -8 am and 12 pm to 2 pm and 5-7 pm and later 10 pm to midnight; we saw the average ticket size and value of both office goers and residents, college goers.

On talking with the store personnel, most customers were frequented or regulars since they were living near the supermarket.?

On tracking the Average ticket size and Basket size, office goers had better purchasing power than students but both had one thing in common- Lack of time.

We studied the invoice generation pattern from the supermarket MIS and it validated our observations.

Framing of the issues:

Instead of targeting all the target audiences and their issues, we narrowed it down to core customers i.e. Office goers.

By reframing the issues, we narrowed down our solutions to remove the complexities involved

Our Strategy –

Target? Busy professionals who have little time to cook.

Action plan-

Created isles containing “On the go” food items, and express checkouts, created 2-3 reserved parking spaces for the pickup orders. (curbside order for teas, coffees, and evening snacks)

The gondolas stocking fresh vegetables got squeezed to give way to the “Hot food counter” wherein the busy office goers could get their lunches, dinners, and snacks packed quickly.

The Hot food category became the biggest revenue grosser for the supermarket since post office or college classes both professionals and students started to hang out for fresh karak tea and evening snacks and pack their dinner parcels as well.

?Residents started flocking to supermarkets not only for fresh fruits and vegetables but to check the “dish of the day” etc as well.

The supermarket ran a weekend bonanza on bundle offers to counter the competition.

Morning became busier for the supermarket as they offered Breakfast options on the go without the hassles of waiting to get it prepared.

No price cuts on products, better margin value derived from hot food, and free deliveries ensured customer retention.

Additional operations cost saved which would have been incurred in 24-7 operations.

High Margin grossers – Hot food , fresh food and household amenities.

My learning from the project was –

Reframing the issues/questions helps in redefining the problem.

Insights by observing customers and their profiles is more important than any MIS or data analytics.

A good strategy must have 3 pillars to be successful

a)???? Correct Diagnosis of the issue

b)???? A methodology or clear path /policy

c) Plan of action.

The aim of penning down a case example is to educate my readers about the core pillars of Strategy and the importance of Reframing any given question or challenge.

?To learn more about “value wars in food chains”, read here.

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