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Store Optimization – Hot Zones within your store – Part 1

Where do customers spend the most time in your store and how are you interacting with them in these areas are both crucial questions for store optimization.  Answering these questions can help you unlock the potential to gain those incremental sales that we are all looking for.

Understanding ‘traffic flow’, that is, how customers make their way through your store, is the first part of the formula. In all stores there are areas that receive low, medium or high attention from customers or have the corresponding low, medium or high traffic passing through that area.  These areas translate into cold, warm or hot zones for incremental sales opportunities.  Examples of some of the more obvious hot zones would include the cash area, a lottery kiosk or the cold drink coolers.

When looking to define the hot zones you need to have an unbiased view of the traffic flow in your store – don’t make assumptions.  Look at how the shelving is set up and how the aisles are formed within the store as this has a direct impact on how customers navigate your store.  Understand how they get from the front door to the till and what they have to walk past in order to get there.

How do you measure customer attention?  Handing each person a GPS unit as they walk in the door (it’s been done – with the tracking device built into the store’s shopping carts) would be the best way, but not necessarily realistic on a smaller scale and budget.  Rather, a proxy for measuring attention or traffic is to look at sales for each of the categories (category management) within your store – that is, how do the sales of soft drinks compare to dairy or to cleaning supplies, etc.  Identifying sales within each area of the store will help you to understand where your best opportunities are to interact with customers.  In addition to evaluating sales in this way you can simply ask your customers if they noticed a display that you placed in the hot zone – tracking the answer to ‘Did you see the sale on DVDs we have on right now?’ can tell you whether or not you are taking the right direction on getting the attention of your customers (and might even gain you an incremental sale in the process).

Ripping the roof off of a store, virtually, and drawing a map of where each section is located is the next logical step for your store optimization.  Combining this map with the data gathered as mentioned above will allow you to understand how customers are shopping and will give you a good visualization of the traffic flow in your store.

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October 29, 2012 | Micheal O | Category Management, Merchandising

33 Comments

  1. Dave Olsen Says: March 22, 2013 1:58 pm Reply

    Understanding how customers move around the store is a key element in understanding how you present merchandise to them. Great blog!

  2. Don Says: March 22, 2013 1:59 pm Reply

    Mobile tracking via free WiFi on cellphones would do it. Good article.

  3. Jason Says: March 22, 2013 1:59 pm Reply

    knowing where you customers are going is key to assortment optimization

  4. Fred Says: March 22, 2013 2:01 pm Reply

    Having the most efficient planograms and effective merchandising is essential for a store to increase profitability.

  5. Jason Says: March 22, 2013 2:02 pm Reply

    I can’t tell you the amount of times I’ve bought something from the “impulse” section just before you reach the registers. Good merchandisers are aware of “hot spots” and continually use them to their advantage.

  6. JohnA Says: March 22, 2013 2:03 pm Reply

    One of the interesting pieces of information to analyze is what people didn’t buy… what category did they stop infront of and made no purchase from. Technology that Micheal speaks of can capture this and lead to analysis to understand why there was no category conversion.

  7. Stephen Says: March 22, 2013 2:04 pm Reply

    Tracking consumers within stores is a great idea to determine areas of high traffic and potential cross merchandise planning opportunities.

  8. colleen shepherd Says: March 22, 2013 2:05 pm Reply

    Points of interruption with categories that stimulate impulse purchases like Chocolate bars are highly will drive incremental sales. Changing up assortment based on time of day. I.e. Breakfast sandwiches on the counter from 8-9 and snacks at 2-3.

  9. Mike Everson Says: March 22, 2013 2:05 pm Reply

    Consider also that basket analysis is a great way to take a look at what parts of the store customers frequent together. This sort of insight goes a long way to helping sales reps understand their merchandising opportunities.

  10. Jeff Says: March 22, 2013 2:07 pm Reply

    I can picture this solution in a visual form – with hints and guidance from a “ripping the roof off of the store” perspective. Where you can take a truly visual look at hot spots in your store from a sales perspective – and make planogram decisions & changes based on it. Sounds like an extremely useful category management tool to be sure.

  11. Brenda Says: March 22, 2013 2:08 pm Reply

    Understanding the traffic flow in your store goes a long way towards building better planograms and identifying more effective ways to engage your customers. Many of the reporting solutions ToolBox provides are excellent tools stores can use to maximize sales.

  12. Michael Says: March 22, 2013 2:08 pm Reply

    Ever wonder why stores are laid out in a particular fashion? Hot Zones are the reason why….They draw the customers in, and when looking at space optimization retailers are looking to setup the traffic flows to ensure that the customer is shopping the store the way they envision it. The sections and planograms are built to reflect this.

  13. Tommy Says: March 22, 2013 2:08 pm Reply

    Traffic flow study for category management is so important because it helps to maximize sales and discover opportunity.

  14. Monica Kharbanda Says: March 22, 2013 2:09 pm Reply

    This is a great article to understand the role of category management in todays competitive world. What customers buys in each product category can help in establishing the hot zones in the store and this way customer buying behaviour can also be related to planogram planning for the stores.

  15. Tammie Says: March 22, 2013 2:13 pm Reply

    I love the concept of “Ripping the roof off a store, virtually…” and mapping where everything is. What a great way to tackle merchanising from a different angle. By then overlaying that map with typical traffic patterns it can really help a retailer determine if they have the best product assortment and placement to generate the best possible sales.

  16. Jonathon Says: March 22, 2013 2:14 pm Reply

    Using hot zones is a great way for stores to boost sales!

  17. Marenos papadopoulos Says: March 22, 2013 2:15 pm Reply

    Interrupting the consumer shopping trip with the right skus and promotional items will certainly provide for incremental sales. Ensuring the right assortment and placement is critical for traffic flow and ease of shop.

  18. Aylw Says: March 22, 2013 2:18 pm Reply

    Very interesting. I like the idea of being able to compare the display and promotional material to the actual impact on sales – something you can do with the right sales and retail analytics.

  19. Wingfai Says: March 22, 2013 2:19 pm Reply

    Interesting how much information we can get by cross referencing sales data with store layout; planogramming and assortment optimization are powerful tools when done properly.

  20. Paul Says: March 22, 2013 2:21 pm Reply

    Love the technology angle. Another innovative way would be to use the smart phone of the people shopping in your store. If there were a chain specific couponing application or store helper to help you locate items you could piggy back off the GPS in the device. Love where this space is going great article.

  21. David T Says: March 22, 2013 2:24 pm Reply

    This assorment optomization within your category management would really help understand the buyers habits, and help add value to their buying experience in your stores

  22. DonWuan Says: March 22, 2013 2:24 pm Reply

    Understanding and proper planning of space management is key. Getting those retail analytics analyzed and optimized will greatly affect your stores retail ability.

  23. Amir Jafary Says: March 22, 2013 2:24 pm Reply

    Many more parameters have to get involved in this kind of analysis.

  24. David S Says: March 22, 2013 2:27 pm Reply

    Knowing how a consumer shops your store is a problem as old as merchandising, and can have a significant impact on the bottom line. Following your customer virtually through category management is a great and cost effective solution.

  25. Amir Jafary Says: March 22, 2013 2:28 pm Reply

    Many more parameters have to get involved in this kind of merchandising, planogram, planograms, category management or assortment optimization analysis.

  26. Matt Pope Says: March 22, 2013 2:34 pm Reply

    Understanding consumer traffic flow patterns offers a wide range of business insight that can not only “unlock” the potential for incremental sales, but improve the consumer experience and optimize operations. This insight can be utilized within the category management and merchandise planning process to plan category adjacencies, new innovation placement, assess the impact of marketing programs on foot traffic to name a few. Other operational benefits include store comparisons for remodels and new concepts and when combining traffic patterns with understanding peak and non-peak traffic hours you can effectively manage labor for restocking times and resets across stores.

  27. Mark D Says: March 22, 2013 2:46 pm Reply

    I wonder if the falling costs for GPS chips will make embedding these chips in shopping carts more feasible. This would be great for analytics because not only will you know where the customer went but you know the path they took to get there. This could help with deciding future display locations, etc….

  28. Marcell Says: March 22, 2013 3:12 pm Reply

    Very interesting. I like the idea of being able to compare the display and promotional material to the actual impact on sales – something you can do with the right sales and retail analytics.

  29. silvio Says: March 22, 2013 3:19 pm Reply

    This is a great idea. The amount of data must be incredibly big, but the information on it is invaluable.

  30. Curtis HL Says: March 22, 2013 3:38 pm Reply

    I have to say I’m pretty impressed at the ingenuity of placing a GPS unit in a shopping cart. The retail analytics retrieved would be priceless and outweigh the cost of the units themselves!

  31. Mike Says: April 25, 2013 1:40 am Reply

    Taking time to just watch customers shop your store/products is vital information. Apart from this, having access to loyalty data to perform this analysis will help you design a better box.

  32. Kristine Says: April 25, 2013 1:54 am Reply

    I think this is a great opportunity for retailers to capture incremental sales especially on Skus with a high profit margin.

  33. Tim Says: April 25, 2013 3:21 am Reply

    Understanding the Hot & Cold zones within your store is critical when placing displays for Incremental, high margin and highly seasonal items