7 Things eCommerce Stores Can Learn From Supermarkets

The first self-service supermarket opened back in 1916 with a chain of supermarkets called Piggly Wiggly, which are still open today. Since then, supermarkets have dominated the world with both small operators and big names like Walmart competing fiercely for consumers.

With small margins and new competitors popping up all of the time, supermarkets have had to optimise and improve their businesses constantly with every part of a supermarket meticulously planned and fine-tuned to maximise profitability.

So, what can over a century of focus groups and sales data analysis in supermarkets teach eCommerce stores? Check out my recent video where I outline 6 of my key findings or read on where I outline those 6 and 1 bonus one:

1. Store Layout

One thing that supermarkets spend a lot of time on is the layout of their shops – it’s something they’re constantly improving so that their customers spend more.

Take the store entrance for example, through a lot of testing, supermarkets have found that when shoppers are exposed to ‘sensory’ items at the early stage of the shopping experience they spend more. You’ll commonly see departments that have products likely to activate the senses shown near the entrance such as:

  • Fruit & Vegetables – which are brightly coloured and excite the eye
  • Bakery – which has smells of baking and causes people to feel hungry
  • Flowers – which have bright colours and fragrant smells

Along with the entrance, every aisle is chosen to maximise spend including how hard they make it to get straight to the checkout if you want just one item. They also never stop testing their layout and analysing the results, which is why sometimes the aisles you visit regularly are completely different all of a sudden.

So what can eCommerce stores learn from this?
Whilst your eCommerce store can’t transmit the smell of baking, yet, the main learning here is to not to settle on your default or first eCommerce layout but to keep evolving and improving it.

For an eCommerce site, your entranceway is your homepage and this is something you should be constantly optimising to ensure that visitors are tempted to start their shopping experience – things like awesome photos, great branding and irresistible offers can all make an impact along with optimising which category and products you feature first.

Equally, things like your navigation, which may have a default alphabetical category order, should be tested and optimised to work out the best order to display them in.

Using heat mapping and click tracking to optimise navigation.

2. Product Positioning

Supermarkets don’t just work on the overall layout of the store, they also look at the layout in micro terms such as where products go on each shelf.

One way they do this is by looking at the levels of each shelf and which products to place on each to maximise sales. The middle shelf at eye level is considered prime real estate where they put the best brands and the best sellers. Cheaper brands are generally placed on bottom shelves with discount and bulk buyers more likely to search out a deal meaning they do not need to waste prime real estate on those products. Likewise, any smaller premium brands that they sell infrequently are placed on top shelves which are still in view but not taking up prime shelf space.

Another thing supermarkets have found is that people tend to scan prices from left to right, like reading. Because of this, they put more expensive items on the left which makes customers scan until they see a price they are happy with and grab the product, maximising what they spend.

So what can eCommerce stores learn from this?
An eCommerce stores shelf is their category and search result pages and again most eCommerce stores just leave the default order without a second thought.

Like the ‘middle shelf’, the prime real estate of an eCommerce store is the products at the top of the category or search results pages which are above the fold. Placing the right products in these positions can increase your conversion rate and your sales. Whether you choose to place products that are your best sellers or ones that generate you the highest margin is up to you but it’s important you test and optimise the products in each of your categories.

If you’ve got a big eCommerce store you could even look into selling this prime real estate at the top of categories like supermarkets sell shelf space to manufacturers – it’s something Amazon is already doing with their sponsored product ads.

3. Cross-Selling

Another tactic supermarkets like to use is to place ‘related’ products close to each other on shelves, something you’ll notice when you see salsa in the chips aisle. This has been proven to increase the number of sales of both products significantly. This effect can also be replicated simply by moving aisles of related producer closer to each other with one study showing that by moving chips just one aisle closer to Coca-Cola it increased sales for both items without them even being directly together.

So what can eCommerce stores learn from this?
If you have any products which are related or commonly bought together it’s important your website visitors know this and see them both. You can do this by optimising the product pages and introducing a new “Commonly Bought With” section which showcases other products that are commonly bought with the one they’re looking at and which gives them an easy way to add both products to their cart – again, something Amazon does well.

Another way of selling more related products is to simply add a brand new product to your store which is a bundle of the products which has a combined photo, a combined total price and an updated description. You can then feature that bundle in both categories which should increase sales of each product.

4. Pricing

Supermarkets spend a lot of time analysing pricing and they use a lot of different strategies to increase sales and profits. A good example of this is how they price items just below whole dollar amounts to give the appearance of something being cheaper – pricing at $9.90 or $9.95 so they don’t go over the $10 mark.

Another strategy they use that works well is ‘contextual pricing’ which encourages people to see value by offering a wide range of options. Studies have shown that if a customer is offered just one product at one price it can be hard for them to decide if it is a good deal or not and this can lead them to check out competitor’s offers. In supermarkets, every product category has different brands essentially selling the same thing but with slight differences in quality, price, and quantity. This gives the consumer the ability to compare options and find the item that is best for them. Interestingly, consumers usually opt to take the middle priced option when presented with three different products or offers.

Lastly, they analyse competitors pricing constantly and tweak their pricing daily to ensure they’re offering their customers competitive prices which although hurts their margins in the short term ensures customers keep coming back, maximising lifetime value.

So what can eCommerce stores learn from this?
Other than not using round pricing, which I hope you’re already doing, the main takeaway from supermarkets pricing strategy is ensuring you have different price levels of products in every category you sell. Adding lower and higher priced items in each category will give consumers context and allow them to select between several options on your website without needing to go off and compare your product to a competitor’s.

Another thing eCommerce stores should do is monitor all of their competitor’s pricing constantly and then tweak their pricing accordingly. Online shopping is even more price dependent than offline and if you don’t maintain close to the lowest rate on your store you’ll find you never get traffic from channels like Google Shopping and your conversion rates will be a lot lower. There are several services that now offer to do that for you which are worth looking into including Price2Spy, Competitor Monitor and Prisync.

5. Sales, Deals, Offers

Everyone who has been to a supermarket will know that sales, deals, and offers are a huge part of their strategy to make you spend more.

A great example of this is the “2 for the price of” sales offers – I’ve found myself taking advantage of these “deals” just because of the perceived value only to find out they weren’t a deal at all and were just 2 items at their standard pricing which is a great example of the psychology of “deals” in action.

Along with deals for buying quantity, you can’t escape a supermarket without seeing hundreds of “sale” signs. These work so well because a large number of consumers use pricing to determine the quality of a product and when faced with a “quality” product at a reduced price it is hard for many consumers to turn them down.

To help customers see the value, they’re getting supermarkets to make sure that every sale sticker shows the original price, the reduced price, and the saving. The colour of the sticker used in sales is not by chance either, with the supermarkets using contrasting colours such as red to catch attention.

So what can eCommerce stores learn from this?
It is extremely important that throughout your eCommerce store you put some products on sale. You should also create a “Sale” category for bargain hunters to head straight to and find what they’re looking for.

Each sale item should be clearly marked with bright contrasting sale icons and clearly differentiated before and after prices to show the consumer how much they’re saving and allow them to see the “quality” of the product they’re getting for the sale price.

It is also a good idea to experiment with different sale offers such as the ‘2 for the price of’ deals until you find one which resonates with your audience and which maximises your profit.

6. Upsells

Have you ever found yourself waiting in line to buy your shopping and added a magazine, a chocolate bar, and some chewing gum? Well, you’re not alone in this. The checkout counter is the most profitable area of a supermarket and one where they manage to easily upsell impulse products which you don’t need but when you’re looking at, have to have.

Supermarkets generally try and upsell:

  • Products that people buy on impulse such as confectionary & drinks – in small quantities rather than big packets.
  • Products people have forgotten such as batteries, pens, lighters.
  • Products that people can use (but not finish) whilst in line such as magazines, newspapers, quiz books.

So what can eCommerce stores learn from this?
Along with optimising and improving your checkout process so it’s as friction-free as possible, you need to be offering your customers upsells to help improve your average order value and your profit per order. These can be added during the checkout process or you could even offer a “one click upsell” on the success page after they have ordered. The products you feature should be inexpensive, easy to add products that are impulse buys and don’t require much research or they could be related product add-ons – such as batteries if they’re buying something electronic.

7. Loyalty Programs

Not only are supermarkets using checkouts to upsell more products but they also use this final step to build customer loyalty with almost every customer prompted to sign up for a loyalty program or to use their card to get points which they can then spend on rewards.

This not only ensures the customer will come back but gives the supermarket invaluable data to enable the optimisations I’ve mentioned throughout this article.

So what can eCommerce stores learn from this?
Whilst loyalty programs are not a common feature of most eCommerce stores – if you have an eCommerce store where you get repeat purchases from customers, the data and value that they can add to your store make it well worth the investment building one.

If your loyalty program works and it gets people coming back more often, you’ll start to develop a loyal customer base which will maximise your lifetime value and you’ll be able to use the data you generate to implement personalisation and improve your marketing campaigns.

To Conclude

To conclude, there are 7 main things you can learn from supermarkets:

  1. Constantly optimise your eCommerce store layout and design
  2. Test the product you show in category and search results pages
  3. Increase sales volumes by cross-selling related products
  4. Ensure you have multiple products in each category and competitive pricing
  5. Give the consumer the sales, deals, and offers that they desire
  6. Upsell impulse products that don’t require research in the checkout process
  7. Create a loyalty program to maximise customer lifetime value

Before you make all of these changes, remember that supermarkets have spent years and years analysing both quantitative and qualitative data before making the changes. Whilst learning from them is a great place to start, it’s important to note that what works in one industry may not work for your eCommerce store. Test each idea and analyse the results rather than blindly implementing them all and hoping they work.

If you have learnt any other tactics from supermarkets that eCommerce stores should consider I would love to hear them – let me know in the comments.

Duncan Jones

About The Author - Duncan Jones

I am a data-driven digital marketing specialist from New Zealand and im passionate about helping businesses and marketing professionals improve their digital marketing results. I have a focus on performance marketing, insist on tracking everything and love optimising & improving campaigns for clients across a huge range of industries. You can find me on LinkedIn here or you can contact me here.

One Comment

  1. Really interesting article analyzing supermarkets and the different tactics that are used. It was really cool to learn that supermarkets actually give customers the chance to compare their option by having different brands with different considerations. I’m kind of curious to learn more about this system they have set up, and what factors they think about when organizing their products, or how many they choose to have available.

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