Tag: consumers

Beware the dark side of Black Friday

Deeply indebted consumers should think long and hard before plunging themselves even deeper into debt by splurging on luxury goods on Black Friday.

With Black Friday and the silly season upon us, finance experts are warning consumers to steer clear of any spending sprees that could exacerbate their debt situation.

It should go without saying, but the message is clear: don’t spend money you don’t have on things you don’t need.

According to Neil Roets, CEO of debt counselling group Debt Rescue, deals offered by major retailers on Black Friday often seem so good that consumers throw caution to the wind and blow their entire Christmas budget on single expensive items such as high-end TVs and other domestic appliances.

“(Black Friday) promises deals that would tempt even the most financially distressed amongst us,” Roets said. “The short answer is – don’t.”

Roets said that his company, for the past several years, has seen the impact that Black Friday and Christmas shopping sprees have had on consumers when they approach the group to try and get them out from under the financial mess that reckless spending has caused.

“Retailers who are themselves in deep trouble because of the contracting economy have come up with a host of clever ideas to tempt consumers to open their wallets and purses, which is how the idea of Black Friday was born,” he said.

“Black Friday was initially slow to take off when the idea was imported to South Africa. Once it took hold, however, it took off like a rocket ship, and many traders are now notching up a significant portion of their yearly sales on this day and over the Christmas holidays.”

Roets said many consumers also fell into the trap of feeling a degree of resentment, believing that they had been tightening their belts for so long that they needed a break and that Black Friday would be the ideal opportunity to splurge on something nice.

However, he warned that the current state of the economy did not lend itself well to this pattern of thinking.

“We are far from seeing the light at the end of the tunnel. It is our belief – and many leading economists share that belief – that we are far from staging a recovery.”

“In short, things are going to get a lot tougher before they get better. Now is not the time to act recklessly. On the contrary – it is more important now than ever to implement fiscal discipline and save whatever money is left over at the end of the month.”

The CEO said that consumers should plan around a budget, and bear in mind that December tends to feel like a long month, as the stretch between paydays is often much longer. Those who are paid a 13th cheque also get lulled into a false sense of security, he said.

“While we all feel that we desperately need a holiday and the end of a brutal year, keep those holidays within budget and don’t think that if you don’t have the money for school fees in December that the money will somehow, magically become available in January when the schools reopen,” he said.

According to Debt Rescue’s data, half of all South Africans are three months or more behind in their repayments, having collectively notched up R1.71-trillion in debt.

Source: Business Tech

ANC calls for debt forgiveness as consumers owe R1.63tn

As at the end of September 2015, South Africa’s gross debtors’ book stood at a whopping R1.63 trillion, while the total credit rand value of new credit granted to consumers was close to R124 billion, says Nomsa Motshegare, CEO of the NCR.

Members of the committee wanted to know from the NCR what measures it has put in place to ease the burden of consumers who are over-indebted and struggling to repay their loans, and how it will act against reckless lenders.

The ANC’s Adrian Williams suggested that the regulator consider a kind of “debt forgiveness programme”, which would reprieve lower income groups. “This shouldn’t be for the rich who have just been spending recklessly.”
Committee chairperson Joanmariae Fubbs from the ANC added that debt forgiveness programmes have been implemented successfully in both developed and developing countries.

The NCR’s Motshegare said in her presentation to MPs that the credit regulator is continuing its investigations into reckless lenders, the overcharging of fees and misleading advertisements. “Lewis Group has for example agreed to pay a total of R75m to refund consumers since we’ve started the investigation last year.”

Forty-four of the investigations have been referred to the National Consumer Tribunal for hearings, one of which is the probe into Lewis Group.

Fin24 reported last year that in one instance Lewis charged a customer repayments of R18 000 after buying a washing machine for R6 000. Another customer bought a laptop, but was charged a compulsory R650 for a delivery fee, although the customer carried it out of the store. There was also R741 charged for an extended warranty.

During question time, the Democratic Alliance’s Geordin Hill-Lewis said the NCR appears unable to exert sufficient control over alleged reckless lenders such as African Bank and the Lewis Group.

“In recent months there have been numerous exposures of nothing short of viperous conduct of lenders, such as the Lewis Group. It’s not good enough to refund R67m to customers who had been overcharged when they made much more money than that with the scams they were running.

“Why doesn’t the NCR, the Hawks or the Reserve Bank take serious actions against these institutions? This reinforces the perception that there are no consequences for such behaviours,” Hill-Lewis said.
Motshegare responded by saying it is often difficult for the legal representatives at the National Consumer Tribunal to agree on dates for the hearings of the investigations that have been referred to the institution.

Fubbs concluded by saying that the committee would request the tribunal to appear before Parliament to give an update on the hearings of the investigations referred to it.

Source: ITWeb 

Indebted consumers stretch SA to its limits

Credit extension is growing faster than job creation, and the moribund economy cannot carry that burden forever

A 2014-15 World Bank report declared that South Africans were the world’s “biggest borrowers”. Consumer credit-use statistics — a comparison of employment and credit consumer numbers — suggest that South Africans are failing to manage their debt responsibly and that some credit providers might be missing the mark regarding their criteria in affordability assessments.

Despite tougher affordability requirements and large-scale efforts to educate consumers, credit use is outpacing employment growth, and the over-indebted gap is widening.

There were 16.9-million credit-active consumers in 2007, the national credit regulator’s Credit Bureau Report reads. At the time, 6.38-million (or 37.7%) had an impaired credit record. In 2013, there were 20.21-million credit-active consumers, of whom 9.69-million (47.9%) had impaired records.

A record is declared impaired if a debtor is three or more months in arrears on an account, if the debtor is under administration or if there are judgments against the debtor.

In the fourth quarter of 2016, there were 24.31-million credit-active consumers, 9.76-million of whom had impaired records — 40%, or two out of every five credit-active consumers.

While employment has increased by only 18% since 2007-08, the number of credit consumers has grown by almost 44%. The percentage of consumers in bad standing grew from 37.75%, to 40.15%. There are now 24.31-million credit consumers — more than 8-million more people than the total number of employed people in SA.

Even allowing for the fact that some people such as financially supported students may not need a job to qualify for certain credit accounts and not all SA’s employed people will be credit active, there is a huge difference in the numbers.

The official credit statistics for 2016’s fourth quarter peg collective consumer debt at more than R1.69-trillion. A significant portion of this — R8.75bn or more than half of debt book value — comprises mortgages, which are considered a wealth-creation type of debt.

For most people, a home loan will be the largest personal debt they incur in a lifetime.

If we move from rand value to sheer number of credit facilities by type, the numbers shift significantly. Mortgages only represent 4.47% of credit accounts. Credit facilities such as credit cards, overdrafts and store cards make up 65% of credit accounts and unsecured credit 14.6%.

These figures do not account for informal debt. Credit bureaus do not list what consumers owe municipalities, in school fees or unpaid medical accounts. One estimate is that only 40% of consumer-debt information is captured by credit bureaus.

As private loans and lending granted outside the formal system, such as loan sharks or mashonisa loans, are not captured, the problem is likely to be much larger than official numbers indicate.

World Bank survey data from a sample of 1,000 people in the Global Findex Report showed that 86% of South Africans took loans in 2016, mostly from acquaintances or private microlenders.

If risk pricing is added to the picture, the poorer end of the consumer market is out in the cold. All credit on offer — from loans to store cards or hire purchase agreements — is priced for risk: the higher the perceived chance of default, the higher the interest rate charged. Low-income earners will, therefore, usually be charged more than high-income earners for the credit on offer.

Instead of excluding poor and risky consumers from credit, many providers allow access but at higher interest rates. Prohibitive rates, greater need — due to lack of generational wealth or more insecure income — and a lack of financial education collide, often overwhelming the most economically vulnerable.

Under apartheid, most South Africans were denied access to certain financial services including credit, either through direct policies or systemic barriers. When that political system was dismantled, there was a desperate need to reform the social system and the barriers to financial inclusion.

The government has been chipping away at the legislation ever since with repeals, new acts, amendments to existing legislation, patches and policy reimagining. The goal is a very narrow sweet spot — increasing financial access while limiting opportunity for abuse of the hungry-for-credit populace.

The Usury Act of 1968 was replaced by the National Credit Act of 2005. The National Credit Amendment Act in 2015 was a further tightening of the reins, especially in terms of the affordability assessments that credit providers are now required to perform. With each new piece of legislation, the government has tried to get one step closer to that dual target.

Their success is a matter of debate, depending on which side of the market you find yourself. One particularly controversial move was the credit information amnesty, or as the credit and legal fraternity know it, the Removal of Adverse Consumer Information and Information Relating to Paid-up Judgments regulations, 2014.

It compelled credit bureaus to remove information of judgments, defaults, and terms such as “delinquent” or “slow paying” from consumer credit profiles, provided that the capital amount owing had been cleared.

This became a requirement of the bureaus and the credit providers supplying payment information to them. It also meant that no matter how abysmal consumers’ track records of debt payments were, if it was paid up, they were given a clean slate by credit providers doing new assessments.

It was championed by the Department of Trade and Industry and one that caused some ructions between it and the Treasury. In 2015, the then chief director of financial sector development at the Treasury, Ingrid Goodspeed, said that the Treasury had “fought that credit information amnesty, we fought it to the last day”.

Credit providers needed “more information, not less”, she said at the time.

“The fact that you wipe it out has not … changed anything. The same people who were overindebted before are now even more overindebted.”

The Treasury was asked to update its position on the matter, but was unable to respond in time for publication.

Officially, two out of five consumers are credit-stressed, and unofficially, the picture is much worse. By omitting municipal, education, private or loan-shark debt, and education debt, our country’s credit numbers underplay a significant portion of the personal debt carried by the average consumer.

Add to that the pressure of crippling debt-recovery measures such as garnishee orders and asset attachment, insecure employment, stretched regulators, loopholes in the laws and the rising cost of living and the picture is far worse.

Economists say that the amount of consumer debt a country can support depends on the health of the underlying economy. SA may be about to find out what the limits are.

Source: Supermarket
Graphics credit: Dorothy Kgosi

Fewer seek credit as tough times bite

Consumers, many of whom are vulnerable in an environment of rising retrenchments and weak economic growth, are trying to pay down debt.

Consumers adopted a cautious stance to credit applications in the first quarter of 2017, figures from the National Credit Regulator show.

At end-March, credit applications decreased by 998,000 to 9.53-million, representing a quarter-on-quarter decline of 9.5%, the regulator said. Consumers, many of whom are vulnerable in an environment of rising retrenchments and weak economic growth, are trying to pay down debt.

Head of Absa home loans Carel Grönum said last week household debt to disposable income, at 73%, was at its lowest level since the global financial crisis. Credit bureau Compuscan recorded a 13% year-on-year increase in the number of accounts that were more than three months in arrears in the first quarter, suggesting consumers cannot afford to take on more debt.

The total value of new credit granted in the first quarter fell 5.6% from the fourth quarter of 2016 to R116.5bn, representing a 7.5% year-on-year increase, the regulator said. The largest increase was recorded in the developmental credit category, which nearly doubled to R5bn. The value of mortgages granted and of other secured and unsecured credit agreements, fell.

Credit facilities such as credit cards and overdrafts increased moderately, while short-term credit granted also declined.

By Hanna Ziady for Business Day

Consumers travel far and wide for bargains

People are deserting retail stores’ butchery aisles, cutting out the middleman and turning to buying meat in bulk. Seemingly, it is proving to be a great saving.

“If I were to buy the same amount of meat at retail stores, I’d need a loan the following day, meat is so expensive,” says Bongani Qansane, of Germiston, who spends R1,500 a month on meat.

“Once a month I make the trip to Heidelberg.

There’s an Eskort butchery where I get my pork cheaper than at retail shops, and I go to a Karan Beef butchery in the same area for beef and mutton. It’s great value for money.” Sipho Dube teams up with a friend to buy wholesale.

“I spend R400 a month and an additional R40 for fuel so I’m saving big time.”A mother of two says she travels close to an hour with her friends every two months to Eskort.

“We buy and freeze,” she said, estimating that she spent 40% less than she would pay in retail shops. “Not only is the meat cheap, it’s fresh. I’m glad I made this decision.”

Pieter Prinsloo, of the Red Meat Producers’ Organisation, said last year’s drought contributed significantly to the increase in meat prices. He said meat was more expensive at retail shops because “its convenience shopping”.

“If you take lamb, for example, you can buy it wholesale for around R70 a kilogram. The cheapest at a retailer would be about R99 a kilogram.

“You can buy beef wholesale from a farmer for R48 a kilogram. That will give you a 30% saving,” he said.

Zeyn Adrian Jenkins, of Durban, said he paid around R350 for 10kg of chicken quarters in Durban. “It’s R200 in Pietermaritzburg and Port Shepstone.”

For six Soweto women, bulk buying allows them to keep meat on their tables for longer.Thoko Nkosi explained that they put away R150 a month for 11 months. Come the festive season, they can afford to stock up on meat.

“Last year, we were able to buy a beast for about R6,000 and we told the butcher how we wanted it cut. We all walked away with different cuts of meat — from rump steak to T-bone steak, ” Nkosi said.

“If I hadn’t joined the group and I walked into a [retailer] with R1 600, I would only get enough meat to last me about two months.”

The Times found stewing beef at a City Deep wholesaler in Johannesburg was priced at R65.95 a kilogram. Pick n Pay sold it for R79.99. It went for the same price at Spar and Checkers sold it for R10 more.

A kilogram of brisket was sold for R65.95 at the wholesalers, for R87.99 at Pick n Pay, R92.99 at Checkers and R98.99 at Spar.

An Alberton butcher said it was important to note that it was not only the price of meat that could differ from one place to another but also the cut and grade.

Source: Supermarket & Retailer

South African consumers have hit hard times over the past few years as a creeping GDP growth, high unemployment and many political shocks continued to weigh on the economy.

In June, GDP data from Stats SA showed that South Africa has officially entered into a recession, with economists predicting tough times ahead for consumers, as more ratings downgrades are in the pipeline, which will ultimately put further pressure on the pocket.

One of the key components of South Africa’s slide into recession was a cut in consumer spending, in everything from recreation, clothing and transport, to even basic needs categories like food.

And South Africa’s biggest food retailers are feeling the pinch.

In April, Pick n Pay missed expectations for its full year earnings citing strained consumer spending as shoppers sought out cheaper options – which appeared to drive them to Shoprite’s doors, who reported a 14% growth in turnover in its latest financial year.

Woolworths, which has consistently positioned itself as a ‘premium’ food store, has seemed to weather the storm, with its latest results for FY2016 showing a 24% growth in profit from its food segment – which makes up 37% of the group’s total turnover.

A weakening economy and drought conditions hit South African food prices hard in 2016, with food inflation hitting close to 12% throughout the year. With a record yield from crops expected in 2017, some relief is on the cards – but the recession and other expected economic woes are likely to keep the pressure on consumers.

In the latest assessment of prices across South African retailers, we found that there has not been much a shift among South Africa’s food retailers.

When shopping for the BusinessTech basket of goods, Woolworths still checks out at the highest price – though it is apparent that, with the exception of Shoprite, competitors have struggled to keep prices low.

The BusinessTech Basket of Goods

For our basket, we look at some essential and non-essential food products. The basket contains 12 items, with store-brands priced for each item where available. The table below shows the pricing:


Prices were sourced in-store from stores around Centurion and cross-checked online, where applicable.Promotional prices, where marked, were not taken into account. Woolworths self-raising flour prices were determined on a per kg basis. In-store prices are subject to change depending on individual regions and promotions.

Prices have increased significantly in some cases, compared to the mid-2015 review. This is most notable in sugar and maize, which were impacted by drought conditions in the country during the interim period.

The most striking difference between the 2015 and 2017 reviews is that Pick n Pay, which was ranked as the cheapest basket in 2015, is now extremely close to being the second-most expensive, a few rands under Spar.

Checkers, which has positioned itself as the more affordable option, has lived up to that reputation, with many of its prices actually decreasing between 2015 and 2017.

Source: www.supermarket.co.za

As brick-and-mortar retailers seek to turn their physical stores into an asset instead of a liability to compete against online retailers, they will need to make sure they are heeding the demands of today’s increasingly mobile phone dependent consumers.

For one, while studies have showed in-store shopping remains important to a majority of shoppers, an International Council of Shopping Centers survey released on Monday showed that more than three-fifths of consumers expect that by 2020 they will actually prefer to be left alone to do their own thing while in stores instead of engaging with a sales person. The only caveat: stores have to provide easy access to products and sizes available there.

ICSC didn’t respond to a request for more details on any historical and other findings of the survey.

The survey of more than 1,000 people in February conducted by Opinion Research Corp. for ICSC also found more than half of the consumers said they prefer to virtually see how home furnishings and accessories fit in a home before they make a purchase. Separately, more than half said they want to compile a shopping list on a store app and receive a floor map to locate products.

The survey also showed how much consumers have come to rely on click-and-collect services, and how mobile is a key part of the experience: Nearly three-quarters of shoppers said they’ve made a purchase using their mobile device and picked up the product in store. Not surprisingly, millennials were even more likely than the average, with 87% of them saying they had made mobile purchase to pick up in store.

More retailers are trying to turn that to a traffic-driving weapon.

“We introduced buy online and pick up in store and buy online and ship to store” without any shipping fee, Crate & Barrel COO Michael Relich said in an interview earlier this year. “We are trying to use that to drive store traffic. When they come in, we give them bounce-back coupons. They use our stores as a showroom first. We actually see a lot of transactions start in one channel and finish in another. Brick and mortar is good for us.”

While retailers such as Crate & Barrel are capitalizing on the shifting consumer behavior, a late 2016 survey by PricewaterhouseCoopers (PwC) for JDA, a supply chain software provider, showed that most retailers are still behind when it comes to designing a digital strategy that would give them a leg up in winning consumers’ wallet share.

Against the backdrop that some retailers are debating the economics of whether to use their mobile sites or roll out their own apps to target shoppers, the ICSC survey suggested there’s demand for retail apps: 71% of consumers said they have one or more retailer apps on their phones and 74% of them access them at least once a week. Some 86% of millennials accessed a retailer’s app weekly, outpacing 74% of Generation X and 61% of Baby Boomers.

In another sign there’s room for growth for voice-activated personal assistants like Apple’s Siri or Amazon’s Alexa, 37% of consumers said they’ve used a digital assistant to build shopping lists or to place orders for in-store pickups. The survey also offered an encouraging sign for mobile payment: 35% of survey respondents said they’ve used that feature.

With personalization a key buzzword for retailers seeking to stand out and offer a product or service only available in their stores, the survey indicated it’s time for them to take a closer look at prices: more than two-fifths of consumers said they are open to the idea of retailers “personalizing” prices based on their shopping patterns and demographics.

By Andria Cheng for www.etail.emarketer.com

Demand for ‘green’ stationery grows

With growing concerns about the environment, office supplies are no exception to the consumer drive for products that promise wellness and sustainability.

More than half of small office and home office consumers buy environmentally friendly office supply products, according to Understanding the Small and Home Office Consumer, the latest report from global information company The NPD Group. That number increases to 76% among those purchasing for an office of 31-50 employees, who have a larger carbon footprint.

“Consumers today are becoming increasingly cognisant of the products they use and food they put into their bodies. With office products also part of everyday life, they are just as important,” said Leen Nsouli, director, office supplies industry analyst, The NPD Group. “The emphasis consumers and marketers are placing on green products presents a big opportunity for revenue and innovation within the office supplies industry.”

Paper products such as notebooks and janitorial supplies are the most popular green supplies purchased, driven by printer/copier paper, paper towels, and cleaning supplies.

Overall, purchasers are pleased with the choice of green products, with nearly 80 percent indicating they are very to extremely satisfied. In particular, green product users like the fact that they are using non-toxic products, and are doing their part to help the environment. At the same time, some feel they lack the quality of non eco-friendly products, and can be expensive.

“Environmentally friendly products are popular among office supplies purchasers; however, there is room for improvement and further development,” said Nsouli. “Manufacturers should take consumer dislikes into consideration, to further capitalize on this trend and get ahead of the competition.”

Source: The NPD Group, Inc. / Understanding the Small and Home Office Consumer 2016

Methodology

An online survey was conducted in July 2016 among a U.S. representative sample of males and females age 18 and older. Qualified respondents indicated they work in a home office or for a small business of 50 employees or less, and have responsibility for purchasing office supplies for themselves or their office location.

SA consumers under the cosh

From today, consumers will pay more for fuel and should brace themselves for further increases including meat prices by the end of the year, say experts.

The price of petrol will increase by 44 cents a litre and diesel by 22 cents.

Gwarega Mangozhe, chief executive at the Consumer Goods Council of SA, says the higher price of fuel, which is directly linked to the weakening of the rand against the dollar, will inevitably impact on disposable household incomes which are already under pressure from other cost increases.

“Consumer spending is subdued and some of our members have noticed a change in shopping habits as consumers search for bargains, while some are prioritising their overall spend on groceries in light of tighter disposable incomes.

“While we remain confident that many of our members will experience a fairly busy festive trading season, the overall outlook remains uncertain given the predicted low economic growth during 2016.”

Momentum economist Sanisha Packirisamy, says the 43c/l under recovery in the price of petrol last month was largely a function of a 1.7 percent depreciation in the rand against the dollar between August and September and a 0.4 percent uptick in average monthly international oil prices over the same period.

Packirisamy says the Organisation of the Petroleum Exporting Countries (Opec) caused a 7 percent rise in international oil prices late in the month owing to a largely unexpected agreement by Opec to cut production levels.

“If oil prices persist at these levels there could be a further increase in petrol prices next month, should the rand stay at similar levels as well.”

She added the rand was also under pressure from heightened fears around a sovereign rating downgrade by Standard and Poor’s rating agency in December on the back of weak growth fundamentals and persistent policy incoherence.

“In our view, the expected rise in petrol prices still leaves the year-on-year inflation rate in private transport costs in the Stats SA consumer basket at reasonably low levels.”

Standard Bank economist Kim Silberman says the outlook for the remainder of the year was for the petrol price to continue to rise, which will add pressure to consumers’ disposable income.

Silberman says consumers spent on average 5.7 percent of their income directly on petrol, which added pressure to consumers’ disposable income.

“However, the effects of the fuel price are far broader than that and will most likely feed through to the price of public transport and the general cost of producing goods and services.

“We expect meat price inflation to accelerate in December.”

Neil Roets, chief executive of debt management firm Debt Rescue, says he expected further increases in the price of fuel towards the end of the year.

“The ongoing political bickering within the ANC and an extremely sluggish economy is likely to impact on the rand and it looks as if the price of crude oil may also be on the rise.”

Roets says one of the major effects of the fuel price increase on the economy would be the continued rise in the price of food.

“The announcement by the Red Meat Producers Association that the red meat price could increase by as much as R8 per/kg in the short term and that it could take between three to five years to restore herds following the severe drought, is bad news for consumers who are dependent on meat for their daily survival.”

Roets says the real elephant in the room was the expected downgrade by the ratings agencies later in the year.

“Despite all the efforts by the government to persuade the agencies that the economy was on the mend, they are not buying into the narrative and the reasons are clear: widespread corruption and parastatals like Eskom and SAA that are burning through taxpayers’ money at an alarming rate.”

Damon Sivitilli, head of marketing at city debt management firm DebtBusters, says the price of fuel increasing put more pressure on the already strained budgets of many consumers.

He says not only would the fuel hike and the resulting increasing cost of commodities choke consumers, it would also have a huge impact on small businesses across the country.

Sivitilli advised consumers to start reviewing their budgets by looking at their needs and adjusting their spending on luxuries in order to survive the economic and political turmoil.

“The repo rate went unchanged last month due to stable inflation rates, but the upcoming increase in petrol costs may put pressure on this once again and continue the trend of rising inflation and costs into the new year.”

The science of retail shopping

According to studies by leading consumer manufacturing companies, the majority of people look and then turn to the left when they enter a store. This is a very good example of how, despite an increasingly sophisticated and tech-savvy society, people remain habitual creatures.

It also presents a conundrum of sorts to retailers and the way they design their shops – how do you stay ahead of your competitors without alienating customers and their ingrained habits?

Getting the tried and tested basics right will create a solid foundation and leave room for innovation; solidifying and enticing your shoppers.

First impressions

The adage “first impressions last”, remains true when it comes to shopping. Also known as the decompression zone, your shop’s threshold area is the space where your customers transition from the outside into what you have to offer.

It is the area where quick and critical decisions are made like how well put-together or haphazard your shop is and what the overall design aesthetic is trying to communicate. Customers will in all likelihood miss products and other signage as they take in the overall shop experience.

To the left it is

As we’ve already established, shoppers will then start walking to the left. The first wall or space they enter will have to be very impactful. It will provide the perfect platform to display your most important products, whether it’s big ticket items or sales products that you have to move quickly.

The bottom line is to make use of people’s left handed autopilot setting to create an experience with a bang.

Pave the yellow brick road

The trick is to keep your shoppers going, exposing them to the entire shop and its products. A well thought-out path is an effective way to strategically control the traffic in your store while avoiding potential congestion.

Stores often have a circular path to the left to get customers to walk through to the back of the store and come to the front again. These paths are often a different colour or texture with the promise of great products along the route.

However, make sure that you don’t rush your customers. With all the effort and time put into merchandising products, the last thing you need is customer hurrying along merrily without even giving it a second glance.

Create natural breaks on your road through special signage, seasonal displays or even a live promotion for the day. Special display fixtures – featuring products near the end of or in between aisles – also encourage impulse buys particularly if they complement other products in close proximity.

If your store doesn’t have specific aisles you can also, on your shopping path, group products together that are a natural fit. Also, remember to keep high-demand or products or promotion at eye level.

Lastly, ensure that you are constantly rotating or “re-designing’’ these displays without taking away the familiarity of the store layout.

The end of the line

Till or checkout counter placement can leave you with quite a headache. A good rule of thumb is to place it at the end of your path or shopping experience. In big stores individual checkout counters per department are also very convenient.

If possible, design a big enough counter for shoppers to place their products and personal belongings. Also, take advantage of the wall behind the counter to create interesting and engaging displays as well important exchange and return policy notifications.

With all the above boxes ticket, it’s important that you continue to evolve your store as new shopper needs arise. Furthermore, ensure that you observe customers and what they are drawn to, avoid, how they move and continue to tweak your design.

By Robbie Johnson, retail manager at Drive Control Corporation (DCC)

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