The Spring Reset: Chore or Score?

Steps to ensuring a relevant set

Published in Convenience Store Products

By
Steve Montgomery, President

Steve Montgomery

Ah, spring is in the air (well, it’s close), and everyone’s thoughts turn to … a spring reset? Probably not. But for a c-store retailer, they should.

There are three approaches the retailer can take to a spring reset:

1. I don’t need no stinking reset! My customers buy the same thing in warm weather as they do in colder weather.

2. What’s to plan? I can simply contact my vendors and tell them that they need to come in to do a reset.

3. Wow, I better get going. By taking some time now I can be ready to maximize my sales and profits for the next six months.

Put like that, No. 3 looks like a winner, but it sounds like work. The bad news is that it is work, but work with a high payoff.

Why should you put this effort into a reset? Because retail intelligence firm VideoMining has found that c-store customers spend on average just two minutes in your store. That doesn’t provide a lot of time to maximize sales. The trick is to expose customers to items they are likely to purchase at or on the way back from their in-store destination.

Indeed, while c-stores are known to be hotbeds of impulse sales, most customers come in with a specific destination in mind. Where that is will change by day-part, and you may need to move shelving, categories and items to maximize sales. Start by analyzing the customers’ current purchase patterns by looking at sales by category and day-part. 

For simplicity’s sake, we’ll assume you plan on leaving the physical layout the same and focus on the SKUs.

So how do you know when to hold them or when to fold them? Restated, how do you decide what items to keep and what to replace? Here are some scary factsfrom Convenience SuperStudy: 

  • Four percent of SKUs drive 50% of inside sales;
  • The next 5% to 50% of SKUs get you to 95% of inside sales; 
  • The remaining 50% of SKUs only get you an additional 5% of sales.

The question is, to which group does each SKU belong? If you have scan data you can access specific item movement internally and rank them overall and by category. If you don’t scan, then this same information should be available from your vendors based on your purchases.

This information should then be used to determine what SKUs are winners, which are keepers, and which are losers that should be cut or replaced.

Now that you know how your categories are performing and what items you may want to eliminate, take this time to look at what your competitors are doing. This used to be far simpler when we considered c-stores to be our only true competition. Today your competive set is far broader and includes drug stores, dollar stores and other retailers. This will give you some ideas on categories and items to add as well as how other retailers lay out their stores to maximize sales (doesn’t mean they are right, but it should provide food for thought).

Having done your internal analysis and competitor review, schedule meetings with your primary distributor and other vendors.  But don’t just assume they will bring you all the information you need; be prepared to ask questions. How do my store(s) purchases compare to other chains in the market? Why are we doing better or worse? Why? What are they doing that we should be doing? 

Be sure to explain if you are considering moving any categories and/or their space allocations at the outset of the meeting or perhaps even beforehand so your suppliers can come prepared to discuss. Each vendor will have recommendations regarding the reset. The dilemma you have is determining if what they are saying is based on your needs or theirs. In some cases you may have more than one vendor that supplies items in a category. Pick a “category captain” to work with, but keep in mind that they will often push to have more space devoted to their products.

Further, keep in mind that in many cases in order to qualify for certain pricing and/or rebates you are required to carry select items. Remember, it is your store and you have the right to make the final decision, but make sure you make it for the right reason: that it meets your customers’ needs and makes you more money by doing so.

Yes, seasonal resets are hard work. But it’s work that will result in increased sales and profit.  And just think, you get to do it all over for the fall/winter reset!