Micro markets - the business operators are still trying to figure out. The biggest question operators have regarding micro markets is how to increase profits. In the OneShow session entitled “Maximizing Profitability In A Micro Market,” Avanti’s Jim Brinton and 365 Retail Markets’ Joe Hessling offered operators nine straightforward ways to succeed in a micro market.
Hessling opened up the session reporting the need for all micro market operators to understand the importance of consumer intelligence. First and foremost, operators need to understand customers’ wants and needs. Hessling and Brinton suggested nearly a dozen ways in which operators could maximize profitability in a micro market, including using digital signage, using weekly promotions and eliminating commission talk to name a few. In order for this to work, however, operators must put aside micro market skepticism and try for themselves.
1. Find out who your top users are:
Both Hessling and Brinton stressed the importance of identifying top users in a micro market. It is possible to find out who the top users are in each micro market if they use a card or mobile app. And tracking those top users is important in order to offer them more incentives to come back. Hessling recommends that operators reward top users differently than they would the normal consumer. First, operators should reward the top 25 loyal micro market users with $5 each rather than giving all users $1. “It’s important to recognize your power users,” said Hessling. A live polling question asked How often do you recognize power users financially? The majority of respondents answered more than one time per week. When it comes to offering employees money at the opening of a micro market, it is recommended to give each employee $1 or $2 and determine top users from there.
2. Use digital signage:
Digital signage allows operators to deliver targeted messages through displaying content, advertisements or promotions on digital signs within the micro market. Operators can manipulate their information to make a profit through digital signage by repeating messages, showcasing new products and promoting the most purchased items.
3. Review item sales data at least once a week:
Hessling’s first live polling question asked respondents How often do you review your item sales data? The “correct” answer should have been “more than one time each week”, and while the majority answered as such, a large number of respondents answered that they reviewed this data only once per week or never at all. Reviewing item sales data more than once a week is important in a micro market in order to find buying patterns and understand which items, on a daily basis, consumers are purchasing.
4. Use promotions weekly:
Promotions were used by 26 people in their micro markets more than once a week. However, many operators in the room admitted to never using promotion in a micro market. One idea for adding promotions is to take an event or a holiday and use that bundle or discount items. Use digital signage and social media to let consumers know about these promotions. Offering promotions at least once per week can be simple and drive users into the micro market.
5. Engage in social media:
Social media makes companies appear tech-savvy, said Hessling. When looking for new business services, consumers will go to the Internet to read reviews, look up Websites and familiarize themselves with all potential businesses. Operators can use a third-party company such as Hootsuite to schedule when updates go out on Twitter, Facebook or LinkedIn. Social media is also great for sending out promotions to consumers and to potential clients. Operators should create their own hashtag on Twitter or start a LinkedIn discussion. The main point of social media is to stay fresh and fit into consumers’ daily lives.
6. Put your brand on your market:
“You have the ability to target people, use it,” said Hessling of branding a micro market. By branding a micro market, consumers will begin to associate your name within their daily routine. It is recommended to put the company brand on promotions, digital signage, social media, etc. within a micro market to target consumers.
7. Keep yourself and your customers safe by investing in good equipment:
Equipment is key in this day and age and Hessling and Brinton advise using hardware opportunities to profit. Operators need to invest in equipment that will prevent Internet outages. “Down time is the enemy, so invest in good parts,” said Hessling. Additionally, both Hessling and Brinton noted that customer safety was a high priority, so investing in a cooler/freezer that automatically locked for temperature control is a must. Hessling suggested that operators create an online temperature log to ensure that the equipment is working properly.
Power surges happen all the time so preventing hardware damage is necessary. Hessling recommends investing in line conditioners, which accept the stress of the surge instead of having it go into the hardware. Lastly, both men recommend securing each site; have route drivers do a physical inspection for credit card skimmers.
8. Increase profits through merchandising:
Organize your micro market by category, said Brinton. Profitability in a micro market comes from merchandising, so switch out products, move items and always keep the micro market looking fresh. Brinton also asked operators, Are you satisfying day parts?
9. Reduce potential profit loss:
There are many things that can lead to profit loss. Communication problems can lead to closed accounts. Spoilage can also lead to products thrown away. To combat this, Brinton recommends moving non-selling products from one market to another. He also recommends keeping an open line of communication with clients and consumers. Explain that employees will be videotaped, but that it will only be for theft activities. Be open with locations. Don’t be afraid to ask for a higher price on items. Eliminate commission talk in the beginning. Go into a location with a set plan in order to reduce potential profit loss. Explain how micro markets work. If need be, put signs up in multiple languages. And when it comes to theft, Brinton recommends treading lightly. “Be careful of accusing employees of theft,” he said. “That could lead to a closed account.”
Micro markets will only continue to thrive in this industry and it is best practice for operators to know the best ways in which to profit from their integration. Little changes can make a big impact for micro market operators and utilizing these changes can lead an operator to maximize profitability in a micro market.