The Right Paths for the Right Shoppers
Layered merchandising allows the retailer to provide instinctive-distinctive paths appropriate to each shopper segment. That is, when all shoppers arrive in the store, they intuitively recognize, even if subliminally, that all of their most common needs are right around them so that they can efficiently access the “big head” selections from those categories in their pathways to checkout. Some retailers, for example, put a selection of dairy at the entrance instead of forcing quick-trip shoppers to make their way through the entire store to reach the dairy case. The first segment (quick trip) can proceed to the checkout as soon as its members have shopped the common area, whereas the second, the “medium” group (fill-in), needs to pass through and shop a secondary area that should be welcoming and intuitive to them, and again, conveniently on the path to the checkout. The “long” group (stock-up) needs to pass through a third area before passing through the same secondary area as the medium group did, and then to checkout. In every case, the goal is to provide an intuitive, instinctive path, distinctive to the shopper segment, which delivers just what they need from a preselected, high-margin offering, speeding them to the checkout.
The path outlined here would deliver a high volume of sales to shoppers from the 2,000 to 4,000 items they are most interested in, with no compromise of margins. Selective margin reductions are reserved as motivation to entice shoppers to look at more complete selections of the specified twenty categories, plus all other categories, in the long tail portion of the store. But this approach can only be pursued if the retailer recognizes the different segments, understands what they buy, and designs the store accordingly.
There are other motivations/inducements for shoppers to extend their trips beyond the convenient, higher-margin area. One obvious motivation is to benefit from a much wider selection of merchandise. Both price and selection benefits for the long tail can be advertised in the big head portion of the store, without eroding the convenience of the big head experience. Successful execution of such a communication plan will obviously affect the success of the long tail, without compromising the big head. Retailers need to manage not just the big head versus the long tail, but simultaneously offer the long tail to shoppers engaged in big head purchases.
The problem here is somewhat analogous to managing quick trippers at the same time as stock-up shoppers. As noted before, quick trippers are stock-up shoppers, just not on a stock-up trip at the time. So the challenge is to predispose a “soft drink and personal care only” buyer on this trip to return to purchase their laundry detergent or other staples at this store. This problem is one of connecting a single shopper’s quick trip with the same shopper’s later stock-up trip.