Is Your Store Full of Holes?

Written by Matt Taylor, Director of Insights, Featured in CHNR magazine March/April 2022 

Because your customers shop around, you have something called leakage, and it comes in two forms. For example:

1. The Converted: customers who buy VMS from you, but also buy some VMS elsewhere
2. The Unconverted: customers who buy all their VMS elsewhere

This leaves you with your share of wallet. For instance, if your average shopper spends 70% or their VMS budget outside your store, you’re left with a 30% share of wallet. (And that could be very generous.)

Your customers don’t buy everything they need from you. They’re naturally promiscuous; buying their usual products from a variety of locations.

Consider your own life. Do you purchase your groceries from a single store? What about your home décor, retirement investments or personal electronics? See, you’re promiscuous too.

VMS is No Different

We recently asked vitamin, mineral and supplement (VMS) specialty shoppers where else they buy their VMS¹. We learned:

• In the last 6 months, only 22% were loyally buying VMS exclusively from specialty stores
• The average specialty store shopper also purchased VMS from 2 other channels (e.g. drug, online, grocery, etc)

Your Store is Leaking & Your Share is Small

Because your customers shop around, you have something called leakage, and it comes in two forms. For example:

1. The Converted: customers who buy VMS from you, but also buy some VMS elsewhere
2. The Unconverted: customers who buy all their VMS elsewhere

This leaves you with your share of wallet. For instance, if your average shopper spends 70% or their VMS budget outside your store, you’re left with a 30% share of wallet. (And that could be very generous.)

Which Holes Are Leaking Most?

Just imagine: your customers are spending most of their VMS budget somewhere else! Which holes need filling first? Here are a few to consider.

1. Out of Stocks: When shoppers can’t find their regular products, many will search somewhere else.
2. Missing Assortment: Your customers are buying specific brands, products, sizes and/or formats that you don’t carry. Your shelves can’t fit everything, but there’s value in finding the biggest gaps.
3. Confusion at Shelf: Most shoppers want to grab-and-go. If shelf navigation is difficult and time consuming, they’ll buy less or nothing and all.
4. Inactive Goals: Shoppers buy to resolve goals, such as immunity, energy or indulgence. So unless you activate additional goals—through merchandising, signage, staff assistance, etc—buying more simply won’t occur to them.
5. Insufficient Return Triggers: If shoppers don’t come back often enough, they’re buying what they need somewhere else. Prompt them with special offers and personalized messages while teaching them to think of you when it’s time for a quick VMS restock.

You’re leaking sales—it’s unavoidable. But while you’ll never achieve 100% share of wallet, you can make meaningful improvements that capture lost sales. Which hole will you fill next?

Matt Taylor is the Director of Insights for Jamieson Wellness and has been in the natural products industry since 2005. The opinions expressed are his own and not necessarily those of the company. You can reach Matt at mtaylor@jamiesonlabs.com.

References:

¹ Survey conducted by Jamieson Wellness, August 18-25, 2021 with a representative sample of 752 online Canadians who purchased VMS in the past 6 months and are members of the Angus Reid Forum. Results are generalizations of all Canadian VMS users and not specific to any one company or brand.