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Store Brands Key to Positive Shopper Experience

May 3, 2010
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New research from online news and discussion forum RetailWire confirms what many retailers already suspected: When it comes to maximizing the shopper experience, nothing offers a better return on investment than a high-quality private label program.

Designed by Dechert-Hampe & Co., Northbrook, Ill., the study included an online survey of nearly 500 retailers, manufacturers, consultants and other members of the RetailWire community. The third in a series designed to analyze emerging trends in retailing, the study set out to determine the relative importance of the shopper experience to retailer success, key contributors to the shopper experience and which of those contributors offer the highest ROI.

Loosely defined as "the things retailers do to differentiate an otherwise common purchase experience," shopper experience clearly plays a critical role in determining customer satisfaction, the report revealed. In fact, survey respondents ranked it most important, just ahead of customer service and factors such as product assortment, deals and promotions, low prices and product information.

How do retailers influence the shopper experience? According to the report, 11 of 26 factors presented to survey participants seemed to pull away from the rest, led by customer-centric store design, availability of national brands and, in the No. 3 spot, quality store brands. Other important factors included signage and navigational aids, localized product assortment, inventory management systems, shopping buying history/data, ambiance (lighting, music, etc.), loyalty marketing programs, rationalized SKU assortment and research and shopper insights. However, all 11 seem to fall into one of three groups: the design of the store itself, the products sold in the store, and factors not physically represented in the store that influence what is there and how it's merchandised.

"Regardless of how we cluster the top-rated factors," wrote study authors Ben Ball and Ray Jones of Dechert-Hampe, "the common survey opinion is quite clear: The fundamentals of retailing still matter most when it comes to shaping the shopper experience.

The study also asked respondents to rate factors influencing the shopper experience by return on investment. This time, participants ranked quality store brands highest, followed by inventory management systems, shopper buying history/data, availability of national brands, research and shopper insights, customer-centric store design, loyalty marketing programs, rationalized SKU assortment, localized product assortment, signage and navigational aids and promotion evaluation systems.

"The perception among industry professionals … is that private label margins are so high that they would naturally provide the greatest ROI to the retailer," Ball told PL Buyer. "In fact, I would have been surprised to see any other factor at the top of the list." He noted, however, that the survey was based on opinion, not actual financial results, which might have led to different conclusions.

The survey also asked respondents to choose three "leaders in shopper experience" from a list of 60. Those named most often were Apple Stores (28.0 percent), Whole Foods (22.1 percent), Nordstrom (21.6 percent), Target (19.1 percent), Trader Joe's (18.6 percent), Wegmans (17.5 percent), Starbucks (15.1 percent), IKEA (12.9 percent), Best Buy (11.6 percent) and Costco (10.8 percent). Of the three supermarkets listed, all three support strong private label programs, as does Costco on the club store side.

For more information, or to download a copy of the report, go to www.retailwire.com/Downloads/ShopperExp_ExecSum.pdf. - Denise Leathers

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