Chains scolded for ignoring demographics

Chains scolded for ignoring demographics

Multi-site businesses are being taken to task over applying rigid stock and pricing requirements that overlook the demographic differences of various sites.

The one-size-fits-all approach to product ranges, pricing and stock volumes across multiple sites has been criticised as limiting sales potential, creating an ‘out-of-touch’ perception of the brand among consumers and creating needless waste.

And franchises have been singled out as some of the worst offenders.

“There is … a difference between inland and coastal, between rural and urban, between capital cities and everywhere else,” one My Business reader said in response to a story on business mistakes associated with interstate expansion.

“It can often be seen with franchises that haven’t worked it out (or refuse to listen). They will have products on the shelves that will never sell in that locality, but head office of the franchise insists every store be the same or else.

“I actually had a client that changed the franchise they were with solely on the fact that they were being forced to stock part of the range that would never sell where they were. The stuff they knew would never sell ended up going to landfill.”

My Business heard a similar account from a store manager with a company-owned homewares retailer, who said she regularly sends poor-performing stock to other stores in the network where demand is much higher from a different socio-economic customer base.

This, she said, enables the company to make more sales overall, despite it being against official policies.

In an exclusive interview with My Business and subsequent tour of its growing facility last year, John Sammut of Sydney Garden Centre chain Flower Power revealed that each store carries slightly different stock types and volumes specifically to cater to both the customer demographics and microclimates that exist just within the Sydney metropolitan area.

These differences can be as subtle as the flower colour of a particular type of plant, such as the cyclamen, which varies noticeably between sites. Identifying such trends enables the business to capture more sales and minimise waste.

Chains scolded for ignoring demographics
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