Why consumer flow is crucial for a healthy business

Why consumer flow is crucial for a healthy business

Time to consume: 3 min

The flow of consumers through the physical store is crucial for a healthy business. The stronger the consumer stream, the better the business prospects. Therefore, it is of great importance to provide the best possible journey and a satisfying shopping experience. From an inviting entrance, through clearly delineated paths, leading to various service points ending in a simple and easy transaction at the checkout.


Shrinkage

For as long as the concept of self-picking in the grocery store has existed, shrinkage has been a challenge. An open and uncontrolled entrance creates an open environment for theft and less turnover and security risks through backflow. With retailers’ profits often being squeezed there is no margin for losses through shrinkage.

Studies from the Global Retail Theft Barometer have shown estimates that 50% of all shoppers are completely honest and would never steel, 10% of the society would always try to steal while 40% would consider theft if the opportunity is given. The main objective here is for the shopkeeper to hinder the 40% by creating a so-called mental barrier that shows loss prevention actions to minimise the temptation to steal.

So, how can we create “mental barriers” while still promoting an open and welcoming entrance for the genuine customer? The entrance shall be controlled, designed, and configured in a welcoming way, used only for entrance not allowing exits, other than in emergency situations.


How to prevent backflow

Have you ever snuck in through a store’s exit area to reach something quicker? That is what we call backflow – when consumers move in opposite direction or against the flow.

To limit the access to easily accessible goods near self-checkouts, it is important to prevent the backflow into the store. Backflow creates confusion and increases the risk of theft when several people move in both directions. Having consumer backflow also creates noise, can be a cause of stress and a feeling of lack of security for consumers as well as staff that are using the self-checkouts. This can create a bad experience and increase the risk of customers choosing conventional checkouts to pay uninterrupted. Backflow can also have a negative impact on impulse purchasing, leading to loss of turnover.

The exit needs to be secure and supervised, as according to the Global Retail Theft Barometer which shows that every 200th trolley leaves the store without paying. This is equivalent to more than €250 per household annually. This constitutes a major problem for retailers, as well as for the honest paying consumers who ultimately have to cover the cost.


Increase revenue through consumer flow

Consumer flow can help retailers increase their revenue. When a natural customer journey is created you increase the possibility that customers will add more products to their basket increasing the average number of articles per purchase.

A well-designed flow will also give retailers the possibility to promote marketspace to their suppliers. A more attractive marketspace will give suppliers the possibility to promote campaigns and new products to customers. The flow of the store is crucial for the healthy business.

 

Article written by
Olivia Holmlind
ITAB

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