How to improve sales in a super market or any retail grocery & general provisions store, through effective data collection?

You have been managing and running a department store or a small general store since ages and business is not growing. You are unable to understand what you should do to improve sales. Or you have just started a retail store and are quite confused how you should go about to bring in more customers to buy from your store. This article will help you gain some clarity on how you should operate your retail business scientifically and systematically.

Because of low margins on most grocery and other day-to-day items, store owners are always under pressure to generate a high volume of sales to make a decent profit.

There are three primary challenges –

1. To get more and more customers to walk into your store,
2. To induce them to buy every time they visit your store, and
3. To ensure that customers return again and again and buy from you regularly.

How do you achieve all of the above? What mechanisms should you deploy for your store's success?

The most crucial aspect to success in retail business or for that matter any business, is your ability to get the true picture of your business, your customers and the market. It is a common weakness of most store owners to go by hearsays and perceptions. This is the biggest mistake you make. Never take decisions based on perceptions. You should always have solid metrics to support your understanding of the market. You need to build this through a diligent data collection exercise.

The raw data that you collect can then be turned into useful information with the help of software tools. This useful information will help you achieve a better understanding of your customers and gain market intelligence, thus enabling you to come up with better operational, marketing and pricing strategies.

There are several software tools available that can help you see patterns in large samples of data that you would have collected over a period of time. Once you begin this exercise, you will soon realize the importance of it. Several hidden patterns will emerge which you would have never thought about. You will be amazed at the amount of information a good data collection and analysis software can reveal, enabling you to take quick strategic decisions with more confidence and accuracy.

What Data to collect?

Here is a list of the most essential data that you must have about your customers.

1. Name and Contact information – This will include your customer's postal address, email address and phone/mobile numbers, so that you can reach them whenever you need to, either to directly market a specific product that they had shown interest in, or to inform them of any newly launched sale/special scheme.
2. Demographics – Information you need to collect include - gender, age bracket, religion/festivals they celebrate, physical disabilities, interests/hobbies, education, profession, income level, whether they own a home, etc.
3. Transaction History – Keeping proper record of customer's transaction history lets you know what products they regularly purchase and what products they occasionally buy. It will also let you know their spending habits and the total amount of money they spend at your store every month. From this you will also be able to create a list of your top 1000 high impact customers who are actually earning you your daily bread, and focus on keeping them always happy - for long term retention.
4. Birthdays and Anniversary dates - If possible, try and collect birth dates of all members of their family, so that you can send them personalized greetings and perhaps also send them a free gift on the occasion, especially if they are high impact customers. You can also use this information to market products they would need for celebration and offer them a special discount on the occasion. Perhaps you can even invite them to your store on their birth day or anniversary day and organize a small cake cutting ceremony. Believe me, this little investment will fetch results which even expensive ad campaigns will not. They will not only become your loyal customer, they will also bring in more of their friends and relatives to buy from your store.
5. Communication Record - Maintain record of all communications you make with your customer using various modes such as direct telephone call, emails, postal mails, etc. This will help space out your communication so as not to overwhelm/annoy your customer with too many calls or mails. You will also be able to analyze the impact of these communications by correlating this data with the actual purchases made by the customer.
6. Customer Feedback on service – You must devise means of knowing whether your customers are happy. If they are unhappy, what are they unhappy about – your service, impolite staff, lack of availability of a complete range of products, poor quality of products, uncomfortable environment inside the store such as products not organized properly, not within easy reach or there is no air-conditioning.

How to collect customer data?

The manner in which you collect various information about your customer and build a complete database is very important. You must ensure that all methods used are unobtrusive and do not annoy your customer. You cannot simply pass on a survey form and ask them to fill in all the details. You will have to use multiple channels to collect data in bits and pieces and then stitch them together in your software driven database.

Here are the various ways in which you can collect data.

When Customer makes the first purchase

While preparing the customer’s bill you can collect name and contact details. On the first purchase, take the customer's mobile number as a unique parameter attached to his record so that when next time the customer makes a purchase, you can simply ask his mobile number and fetch his record, not requiring you to ask for full contact details every time. While adding the new customer into your billing system, make a note of the following information - gender, age bracket (child, youth, middle aged, senior citizen), physical disability (if any). You do not need to ask. You can simply observe these and tick the appropriate options in the customer creation interface of your billing software.

Your transaction history will also get built when you do the billing through a good software system. Thus the moment your customer makes the first purchase, nearly 50% of the data is gathered.

Feedback Form

As soon as you generate the receipt at the billing counter, your software system should also print a small feedback form. Please note that the feedback form should be used only on first purchase and thereafter once in 3 months. Your software system should take care of this automatically and generate a print out only when it is due.

You may handover the feedback form to the customer and request him/her to take out a little time to give their valuable feedback. Provide a comfortable seating area in one corner of your store near the billing counter, so that the customer can sit and fill up the form comfortably. You must provide them with a writing board and pen so that they are able to fill up the form without any difficulty. The pen could be given away as a free gift and must bear your store name or logo.

Better still arrange for a cup of coffee/tea or soft drink which will ensure that the customer is relaxed and takes due time to fill up the form and is not doing a rush job. Believe me, these gestures will go a long way in building your store a reputation and gaining customer loyalty.

The feedback form should be personalized by addressing the customer with his/her name. Since it is generated by your billing software, each form can be printed with personalized data. Here is a sample feedback form.

Membership Card

Issuing a membership card to customers is a good way of increasing customer loyalty. While enrolling customers for issue of membership card, you may collect some more data such as - interests/hobbies, names of all members of their families, their age, gender, dates of birth and wedding anniversary, festivals customer's family celebrates (will help target specific products during festival time), etc.

If you launch a membership card, you must have a points building system and each point earned should be quantifiable into say 1 rupee. Such a motivation would motivate customers to take your membership card thus allowing you to collect some information while enrolling for the card. You can even ask first time walk-ins who did not make a purchase to take the membership. You must post a dedicated person sitting at a desk near the store exit for this purpose. Do not let the billing person do this job as it will create holdup at the billing counter. Make sure that when you are enrolling for membership card, the customer is provided with a comfortable chair to sit. If your store is big and has good number of people walking in you may need to deploy more than 1 person for this purpose. To save your cost, you can get hold of local students and get them to do this exercise for a decent pocket money or some freebie.

Other Modes of data collection

Additional data in smaller bits can be collected while issuing discount coupons or by running lucky draw. You can also run competitions for customers to suggest on new products you should introduce, service improvements you should make, comfort inside the store, product display, etc.

I hope the above would have given you a fair idea of the direction to go for retail success. Based on the specifics of your store, you can create your own list of data fields that you need to collect and get an intelligent software system developed that can convert raw data into meaningful information in the form of tabular reports, graphs and charts.