Armed with critical data showing how consumers shop, Marsh Supermarkets to redesign 80% of its stores
More retailers are gathering insights about shoppers and their behavior in supermarkets, and using the knowledge to customize assortments, improve the shopping experience and increase sales.
Marsh Supermarkets is doing all of that and more. In an unprecedented and grand initiative, the Indianapolis-based chain of 104 stores is redesigning and remodeling some 80% of its stores this year based on an analysis of foot traffic and how customers shop for groceries. The company is owned and operated by Sun Capital Partners, a private investment firm based in Boca Raton, Fla., which acquired Marsh last year.
Two distinct formats will emerge. Marsh the Marketplace will be larger stores with a focus on variety, natural and organic products, and meal solutions. Marsh Hometown Markets will encompass a more traditional format with more emphasis on savings, ease of shopping and quality perishables. The latter stores will retain a price image with pallet drops and power endcaps. Both formats will feature an improved traffic flow to make the shopping trip more efficient.
“This program provides a huge opportunity to fine-tune category adjacencies, enhance traffic flow and improve exposure to key growth categories in both Marketplace and Hometown Market stores,” said Mark Heckman, marketing vice president. The original banners consisted of 82 Marsh Supermarkets, 16 LoBill Foods and six O'Malia's Food Markets.
The initiative is based on the notion that little is understood about the effect of store design and in-store shopper behavior on category sales and in-store media effectiveness. Marsh aims to understand how shoppers maneuver through the store and the measurable impact of this traffic.
To gain this knowledge, the chain is relying on the technology and methodology of in-store shopper behavioral metrics developed by Herb Sorensen, a shopper behavior expert.
The work involves sophisticated path-tracking and shopping quadrant analysis with help from Sorensen, global scientific director of shopper insights at TNS Sorensen in Troutdale, Ore.
The two executives outlined the rebirth of Marsh at a shopper insights conference last month sponsored by the Institute for International Research (IIR) in Chicago.
According to Heckman, much of the supermarket receives relatively little foot traffic, especially among short-trip shoppers. The stakes are high at Marsh where the average length of shopping trips is 12 minutes. In fact, more than half of them are eight minutes or less, and half of the shoppers buy five items or less per trip.
The redesign begins at the entrance of many Marsh stores where the Wall of Values has been removed because it funnels shoppers in one direction. The chain is replacing that “tunnel” with “power buy” endcaps of Center Store products that shoppers can buy on short trips. The change also provides easier and quicker access to the main supermarket floor.
“Aisles, while necessary to house products and categories, also serve as ‘barriers’ that often inhibit exposure to key areas of the store and categories,” said Heckman. “Much of the store receives relatively little shopper penetration, especially among ‘short trip’ shoppers.”
He said product categories vary greatly in terms of generating sales because of positioning in the store and the frequency of exposure to shoppers. In fact, categories with a lot of stockkeeping units typically require more time for shoppers to make a purchase decision. He listed bottled water, toothpaste and beer as examples.
The chainwide remodeling is based on an extensive study of shopper behavior at a 25,000-square-foot Marsh supermarket in Indianapolis. The work involves PathTracker and EyeTracker technologies developed by Sorensen. The former are non-RFID audits that employ trained observers who systematically count the number of shoppers in specified areas of the store as well as the predominant movement or direction of shopping for those shoppers they count. This is done on a repetitive basis throughout several days to yield maps for traffic flow and shopper density as well as for analysis.
EyeTracker, which Sorensen calls “the next generation of in-store behavioral science,” involves mini-cameras attached to shoppers as they move about the store. “We use this to track, not only what the shopper sees, but also track where the shopper is. We're doing this all over the world. The first store was a Carrefour supermarket in Bangkok, Thailand.”
In Marsh stores, hundreds of PathTracker audits showed that a perimeter-shopping pattern dominated. Numerous endcaps and interior aisles were void of significant shopper traffic. There was a typical “racetrack” traffic flow with “front-to-back” flow through produce and to the back aisle. The average “shop time” was only 12 minutes. Shorter-trip shoppers were exiting the store through wider frozen food aisles in the middle of the layout.
Meanwhile, dozens of more sophisticated EyeTrack audits showed that the right side of store (early in traffic flow) had more shopper density (time and volume of shoppers) in produce, bakery, and the cookies/crackers and soft drinks aisles of Center Store. The left side of the store (late in traffic flow) had less overall shopper density, but more around the dairy and meat departments.
Nineteen supermarkets have been remodeled so far based on the behavior principles, according to Heckman. Some early results include:
Double-digit sales increases.
Increased penetration of private-label and Center Store categories.
Increase in overall basket size.
Qualitative approval of shopper satisfaction and intent to return.
Retention of price image through exposure to pallet drops and power-buy endcaps.
The remodeling work will continue this year throughout the chain's network of stores. Marsh will continue to study shopper behavior in the test store and use the results to fine-tune and adjust category adjacencies even more.
Heckman said Marsh is looking for brand partners interested in pursuing joint research regarding the chain's remodels and resets. He and Sorensen are also looking into setting up a full RFID test in a supermarket to serve as an ongoing laboratory for tracking and analyzing shopper behavior.
“Looking at how people behave in the store gives you a radically different view that is very slowly percolating throughout the industry,” said Sorensen. “I believe that paying attention to the shopper in the store eventually will revolutionize people's ideas about how to retail.”
Another speaker at the conference also advocated paying attention to the shopper in the store and keeping in mind the basics of retail.
“At the end of the day, shoppers are time starved,” summed up Patrick Hare, director of the In-Store Merchandising Center of Excellence at Kraft Foods. “We need to create an interesting experience, but also need to organize our category and merchandise our products in a logical way that makes it easy for our shoppers to find both the products they're looking for and new product offerings on the shelf.”