I have spent the last 20 years mining store sales data to find useful patterns and trends that can predict successful retail opportunities. As a retail scientist my goal is to make sense of huge volumes of retail data and to use this knowledge to show retailers how to make smarter, more profitable decisions.
One of the most surprising things I continue to come up against is the strongly-held belief by individual store staff about what their customers want. Even when I provide data that disproves their view, people often refuse to change their mind.
The 80:20 rule
In every category, for every need, there are many different product options. But in a clear example of the 80:20 rule in action two or three market leading brands often represent 80% of sales. It makes sense to make these leading products easily available in your pharmacy.
Here are some examples that illustrate this point, using year-to-date RPM Retail sales data from 130 independent pharmacies:
- Top selling service: Passport Photos
- Top selling medicine: Flixonase
- Top selling vitamin C: Livon LypoSpheric Vitamin C sachets
- Top selling brand of supplements: Go Healthy
Customer demand
The examples above are derived from the sales data gathered from pharmacies in all parts of New Zealand, of all sizes, and across all types of socioeconomic communities. Therefore, these results represent the New Zealand-wide popularity of these products. I like to think of it as the demand signal.
Missed opportunities
When I present lists of top-selling products to retail pharmacy staff and recommend that they should stock them if they want to increase their sales, I am surprised by how often I hear: “But my store is different.”
While I understand each retailer has some local, unique product trends, our measurement has consistently shown that the most popular products are being sought out by customers everywhere. If your customers are not buying the best sellers from you, it is because they are buying them from your competitors!
Knowing what to stock and what to recommend is one of the critical success factors in retailing because it enables you to invest in the products that are most likely to satisfy your customers’ needs.
Focusing on the top selling products not only increases the likelihood that customers will find what they are looking for, but it also makes the job of retail sales staff so much easier.
Recommendations
With thousands of products available to stock and the high turnover of retail employees, it is no surprise that many pharmacy sales staff lack the necessary knowledge about what to recommend.
Putting up-to-date market data containing the wisdom of the crowd in the hands of your retail sales staff will improve their confidence to make product recommendations. The result will be more sales from more satisfied customers.
Get in touch with me at john.saywell@rpmretail.com to enquire about the RPM benchmarking and reporting software for your retail store.
