The retail landscape is more challenging than ever before. Consumers lack confidence as they face economic hardship and high unemployment. In the face of economic contraction, the retail landscape appears filled with all too many channels, banners, and SKUs. Supply chain management and other scientific management techniques have discovered operational efficiencies. Profit margins are at an all-time low; because of low margins, investment capital is at a premium and demands precise targeting.
Consequently, to optimize capital planning, branding, marketing communications, merchandising, assortment planning, and operations, retailers must understand the drivers of trips and loyalty across all channels.
Traditionally, loyalty factors - overall shopping experience, corporate image, assortment, store environment, quality of products, store associates, navigation, unique/innovative products - are viewed in isolation and as affecting loyalty in a linear and one-dimensional manner.
SmartRevenue provides Structural Equation Modeling to reveal the dynamic relationships between the drivers of trips and loyalty:
By understanding these dynamic relationships, SEM drives the prioritization of business initiatives to help retailers properly allocate investment on those initiatives that will drive the success that they seek at the level that they require.
By identifying a retailer's competitive positioning in the minds of customers vis-a-vis key loyalty factors, SmartRevenue supports the development of competitive strategy. Based on cross-channel comparisons, Structural Equation Modeling identifies opportunities to strengthen differentiation and overall equity, guides strategies to shift share from competitors within channels, and identifies specific strategies for high-value behavioral, demographic, and attitudinal shopper segments.