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Marketplace Scratch Pad

Blood from a wallet

Scott Jagow Feb 23, 2009

The recession is forcing retailers to hone the science of separating you from your money.
The Wall Street Journal has a story today about how stores are playing the paycheck cycle.
Pepsico noticed that sales of Frito Lay snacks were diving at the end of the month and picking back up at the beginning:

“The first of the month we might promote bigger sizes and at the end of the month we might shift down to smaller sizes in order to keep our sales growth going. It’s worked well.”

There’s also a really interesting interview on Time’s website with retail expert Paco Underhill.

Underhill says for one thing, stores look sloppier. People are carting things around the aisles and then deciding not to buy them:

Someone picks something up from their basket, takes it to another section, and then discards it. So the stores are just messier. And a basic rule of retailing is that you have to have a clean store.

He also says the days of big box retailers getting bigger are finally over.

As some retailer put it to me the other day, ‘we acquire these 40,000 square foot stores, yet our ideal format is 25,000.

They can’t move the inventory. And as much as people are looking for bargains, they’re really not in the mood to shop for them. As Underhill puts it: “Walking into Home Depot and seeing 28 coffeemakers, ranging in price from $16.99 to $116.99, is an overwhelming sense of choice. So that the merchant is going to have to edit.”

Yeah, I think a little editing might be nice for a change.

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