Store segmentation provides the means to optimise ranging, promotions, price and merchandising at store and estate level in order to target sales and marketing activity more effectively.
The reasons people shop and where they shop, will affect their buying decisions. Understanding their affluence, ethnicity and household composition, for example, helps shape store segmentation by aligning price, range, promotions and merchandising to specific target groups.
Brands and retailers need to understand how each of their stores will perform, based on different factors. For instance, the site’s location (high street, residential, retail park), nearby proximity drivers (transport hubs, attractions, transient work force), local competitors and the consumer profile within catchment.
All too often, retailers forget that each of their sites, albeit part of a larger chain, will have differing characteristics and potential propositions dependent on its location and site attributes.
Store segmentation improves sales and marketing effectiveness by focusing limited resources and expenditure on the greatest possible return on investment.
Retailers and brands are increasingly focusing on segmenting their stores and aligning marketing effort to deliver more meaningful engagement with customers.
Understanding your stores and how to optimise the right mix of products, merchandising and promotions will improve overall profitability for each. The more you can tailor your offering for the relevant audience, the more sales you will generate.
“S2’s analysis acted as the foundation to develop segmentation models to reflect WHST shopper missions. WHST could then tailor their outlet brands and introduce targeted campaigns which reflected the optimum product mix offering in a consistent and intelligent manner.”
Ian McConville, Head of Marketing Insights, WH Smith
Our store segmentation services include:
- Investment prioritisation based on store opportunity and retail landscape performance pressures.
- Catchment analysis of consumer, workplace, competitor, proximity, foot traffic drivers and retail opportunities.
- Store portfolio mix impact analysis by store location, town and region.
- Market sizing to define opportunity for category growth based on consumer occasions.
- Optimisation of store level activity including ranging, pricing, merchandising and promotions that are suitable for that particular segment of store.
- Identifying store differences to move forward from a blanket approach to more targeted sales and marketing activity. This extends to developing different price and ranging strategies.
- Optimisation of store and category space based on potential uptake of specific products.
- Ability to size the market opportunity around each store based on its segment type and catchment.