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Shopping Matrix

As a consumer goes through a typical day, he makes a shopping list. The shopping list is usually a mental list. After a while, he makes a decision to go shopping. There are two factors that influence his decision about where to go. He first looks at the variety of items and considers whether any of the items are urgent. The decision matrix looks like this:

	URGENT	NOT URGENT
FEW ITEMS	A quick trip convenience store	B quick trip convenience store Dollar Store
VARIETY	C quick trip convenience store Dollar Store	D planned shopping "big box" store discounter

When the decision-making process becomes complicated, the consumer will usually divide the shopping list into more than one so that it more conveniently fits into one of the squares.

There are several important known facts that this matrix confirms:

1. C-store shoppers buy only a few things at a time.
2. They buy things largely on impulse.
3. Hot food and fountain drinks play an important part in C-store sales because consumers tend to want to satisfy real or imagined thirst and hunger promptly.
4. Beer and cigarettes are part of the relaxation ritual; not something that the consumer would plan a day or so in advance.

There are several more generalities that this matrix seems to explain:

1. Dollar Stores meet the two mindsets that are between the quick trip to a C-store and a shopping expedition to WalMart. Their rapid growth is probably attributable to these two instead of only one intersections.
2. The observed strategy of the "big box" stores is to offer the consumer the opportunity to buy more of the upcoming URGENT-FEW ITEMS category of goods--including gasoline.

The matrix further suggests several strategies for the C-store owner:

1. Target new lines that increase inside sales.
2. Eliminate slow-movers to provide both money and space for more profitable lines.
3. Watch the market carefully for merchandise innovations.
   1. Experimenting with new lines is expensive.
   2. Let others take the risk of early innovations and watch for their success.
4. A useful tool is "sales per 1,000 gallons."
   1. This is the third step in Three Steps Toward Profitability.
   2. In 2004 Business Resources and Reports, Inc will add a new report in our clients' Management Report showing the monthly and year-to-date Sales per 1,000 Gallons.

Copyright © - 2003 Dutch Hawkins Mandeville, LA USA - All Rights Reserved

July 25, 2003