“When you can measure what you are speaking about, and express it in numbers, you know something about it, when you cannot express it in numbers, your knowledge is of a meager and unsatisfactory kind; it may be the beginning of knowledge, but you have scarcely, in your thoughts advanced to the stage of science.”  …British Mathematician, Lord Kelvin  

During my thirty-year retail career, most Monday mornings were consumed by a weekly review meeting where senior leaders routinely examined seemingly every measurable aspect of the prior week’s business.  Certainly sales, profit margin, promotion impact, transaction size and customer counts were mandatory topics.  

What was never discussed was lost business due to out of stocks, service failures, and certainly not more abstract issues such inconvenient product placement, confusing messaging, visual overload, cluttered aisles, and a myriad of other sources of shopper frustration that negatively impacted the amount of money shoppers spent during their visits.  

Accordingly, when shopper behavioral experts talk about those topics, they have a shallow ring to the ears of retailers essentially because they have not been cogently monitored and measured in terms of Monetary Opportunity Costs. 

Logically, these Monetary Opportunity Costs have the potential to be substantial.  For example, the Food Marketing Institute tells us that average supermarket shopper basket average is about $44 with average weekly transactions of 13,500, producing weekly sales of $595,000.   Given those numbers, if retailers could add just one more item to the shopper’s basket, conservatively valued at $2.50/item, that same store would add $33,750, (an increase of 5.6%) to its weekly volume, annualized at over $1.7 million dollars. That is just one store.  

So, the stakes are high.  The opportunity is real, but retailers will tell you that it is no easy task to add an item to every basket, without cutting prices and impacting margin.  However, building to that goal by mitigating in-store shopper frustrations and creating an environment where the shopper more efficiently connects to the items on the list does not touch margin, in fact reducing shopper impediments can often reduce the retailer’s operational costs through merchandising continuity and labor efficiency.

Where does a retailer begin in the quest to build basket size through shopper efficiency?  

Lord Kelvin might tell us that it begins with measuring how many dollars the shopper spends on a per minute basis in the store.  From there the retailer has a baseline from which to measure improvement.   The next step is to better understand the existing impediments that may be preventing shoppers from adding the one additional item to the basket.  Shopper Scientist has the tools to provide a road map to set of new metrics that finally will help retailers understand the revenue they are missing each week and the steps needed to begin to recover those lost sales.