Chapter 8Retail MarketingContents8.1 Increasing Sales from the Existing Customer Base8.2 Increase Sales by Expanding the Customer Base8.1 Increasing Sales from the Existing Customer BaseIt is generally accepted that it is less difficult to increase sales obtained from existing customers. It is not difficult to understand why this should be so. Existing customers are aware of the nature of the offer and support it to a greater or lesser degree. There are a number of possible ways in which sales of existing customers may be increased.Increase the Spend of Core CustomersEvery business has core customers, customers who visit and purchase both regularly and frequently. It is a relatively easy task to identify these customers and to ascertain their purchasing activities and to establish their preferences. By understanding their preferences (and their dislikes) it should be possible to increase the frequency of their visits, to increase the proportion of purchasing to browsing visits and to expand the size of their purchases.Expand the Core Customer BaseAssuming that the retail offer is well supported by the existing core customers, it follows that there should be an effort to identify other consumers sharing core customer characteristics. Given a target customer profile, store catchments areas should be searched for consumers with the same or similar profiles.Increase Company Share of Core Customers Total SpendThere are a number of factors to be considered. The first is to ascertain the share of customer spend the company regularly receives and in what merchandise categories.Another issue may concern customer perceptions of specific elements of the merchandise range. Adjust Space AllocationA regular review of rate-of-sale per unit of space can be helpful in maintaining an optimal level of sales.The combination of electronic of sale (EPOS) data together with space management programmers offers the merchandise manager a powerful planning facility.Add Service to Existing Merchandise RangesBy adding services to existing merchandise ranges, this is the opportunity to offer added value to the customer and establish differentiation at one and the same time.Adjust Merchandise and Service Offer FeaturesCustomers are both dynamic and discerning and are known regularly to visit competitors outlets to monitor merchandise and service characteristics. There have been significant (and major) changes in the circumstances of many consumers and the alert reflects these in the offer.Ensure Correct Levels of Availability of MerchandiseMany companies fail achieve maximum sales volume because they neglect to maintain an in- stock position across the merchandise assortment. Clearly the maintenance of unnecessarily high levels of availability is expensive and can be punitive.Offering Facilities that Encourage Customers to Spend More Time In-StoreThe length of time customers spend in stores is a function of their shopping intentions. We shall discuss the issue of shopping mission types in later chapters, at this juncture it is sufficient to make the point that consumers have a range of different purchasing motives which are influenced by their needs on any specific occasion and by their experience with the specific retailer offers. These result in six possible types of shopping mission:nDestination purchases; where a specific purchase is planned;nPlanned regular purchasing visits; which may or not be store specific but, during which a planned regular purchase occurs (e.g. a weekly food shopping visit);nPlanned comparison shopping visits; during which information is sought but a purchase is not necessarily made;nPlanned browsing visits; which are part of a conscumers leisure activities, which, in turn, are social activities;nDistress purchases; made for forgotten items for which there is an immediate requirement;nImpulse purchases; which may, but not necessarily, occur during a planned shopping visit.Thus, if the consumers perceptions (based on experience) of a specific retail company are that the offer is limited to their making a series of regular but shot visits to purchase a few items the reasons for this view should be explored.8.2 Increase Sales by Expanding the Customer BaseGiven that the suggested options for expanding sales form existing customers have been evaluated, and where cost- effective implemented, the focus should then be directed towards the potential offered from new customers. Again there are a number of options.nExpand the Number of OthersnExpand into the Peripheral Customer GroupnAdjust the Positioning of the Total OffernUnderstanding the BusinessConsider Alternative Formats and Delivery AlternativeCustomer Alternative SegmentsnExpand the Merchandise and Service-Product RangesnMerchandise selection: meeting customer expectationMerchandise characteristicsBranding policyKey merchandise groupsPrice Policy and Price Point LevelsWide