As a small grocery store owner, you know that bringing new customers in the door — and keeping hold of the customers you already have — is vital if you want to survive in this competitive market.
Walmart can afford to lose money on milk promotions because they make it back on electronics. You can't.
So where do you start?
Should you offer sales? On which items? Maybe it’s time to wade into the waters of social media marketing. Or is that a waste of time for a store like yours?
Is your head spinning yet?
Fortunately, there’s a simple tool you can use to make data-driven decisions about where to spend your marketing dollars, time, and effort: your point of sale (POS) system data.
In this post, we'll show you how to use your POS data to develop effective marketing strategies that will draw customers in, increase sales, and help you compete with the big chains.
The Key to Small Grocery Store Marketing: Be Strategic
Let’s be frank: The same marketing strategies that work for massive names like Target or Walmart aren’t going to work for you.
Corporate chains have access to more resources that allow them to run big blanket sales. Trying to match the big guys on price (and tactics) is just going to end badly for your bottom line. Instead, to find marketing success, small grocery stores need to embrace what makes them different.
That means finding ways to craft strategic promotions tailored to your store’s strengths. In other words, don’t compete with the big guys on their terms — do it on yours.
The only way to do that effectively is by using data.
Modern grocery store POS systems generate invaluable data every day simply by being used for everyday tasks, like ringing up customers, managing a loyalty program, or updating inventory.
By leveraging the POS data that you likely already have, you can get a deeper understanding of your customers, what they love, and what kinds of deals they respond to the most.
7 Ways To Use POS Data To Improve Your Promotions
Now that you understand why a more thoughtful, data-driven approach is important for your small grocery store, the question remains: “How do I actually get started?”
Here are some easy, real-world ways to use the reports on your grocery store POS system to create effective promotions and events.
1. Identify Top-Selling Products To Draw Customers In
Examining overall sales numbers can be helpful, but it doesn’t provide a complete picture. It doesn’t show which specific products contributed to sales.
Your POS system can show you items that are bestsellers by volume and in terms of profitability, which will inform you on how to best use them in promotions.
In real terms:
- There are products customers buy every week, such as milk, bread, eggs, bananas, and ground beef. You don’t make much money on each sale.
- Other products, such as specialty cheeses, prepared sandwiches, and organic items, don’t sell as frequently. However, you make more profit when you do sell them.
When you put milk on sale, you might lose money on every gallon. Families will buy it, but you're not making a profit.
When you put specialty cheese on sale, you still make a profit and offer customers a good deal.
Here are a few ways that knowing your bestsellers can improve your sales strategy:
- If you identify the staples that consistently sell well throughout the week, you can place standing displays for complementary or seasonal sales items near them to make sure most customers pass by them. Think deli-made salsa near the chips.
- Look at non-staple bestsellers for a hint of the types of specialty items (e.g. homemade meals, specialty cheeses, unique meat cuts) that draw people to your grocery store over a chain. Running special promotions on these items could help drive foot traffic.
- Use sales on high-margin items that may not sell as frequently to incentivize new customers with the promise of a great deal.
- Create a product bundle that pairs a high-volume seller with a slow-moving item to clear it from your shelves.
Data on your bestsellers is a solid starting point, as it allows you to build sales around what your customers already love.
Why this works: Differentiating yourself from big competitors is a must as a small grocery store or food market. These reports will help you home in on the unique products your customers love, helping you further define your niche and stand out.
2. Identify Patterns in Customer Behavior
You can also use your point of sale data to identify customer behavior patterns and buying habits. What products do people tend to repurchase most frequently? How often are customers shopping in your store and at what times of day?
POS analytics data can help you answer these questions, providing a deeper understanding of your customers’ shopping habits. Reports like department sales by time or product category analysis will help you spot important trends.
Here are some examples:
- Pull sales reports by day and time to look for spikes that could indicate “trip missions” and other specific shopping visits. If you see spikes in demand at the deli around lunch, you could start running timed lunch deals (e.g. “mix and match meal deals from 11:30 - 1:30 on weekdays”).
- Look at product categories to see if certain categories frequently sell together (e.g. cereal and milk, chips and dips). When you know what pairs well together, you can place those items near each other or offer a deal on both.
- Look for patterns. Maybe weekdays are for quick trips — people grab milk, bread, and lunch meat. But weekends are for big family shopping — they fill their carts with everything for the week.
When you understand how your customers shop, you can create marketing campaigns that are more likely to resonate with them. These efforts can help you increase your sales and customer loyalty.
Why this works: Groceries attract a wide range of shoppers, from families and casual snackers to commuters and meal planners — and all of them interact with your store differently. Identifying these patterns helps you maximize the value of each area of the store and improve the timing of your inventory reorders to match peak use.
3. Personalize Your Promotions Using Customer Loyalty Data
Customer loyalty programs are a valuable tool for customer retention, encouraging repeat business by offering points for purchases. While most small grocery stores offer some form of customer loyalty program, they don’t make the most of them.
Once you have customers’ contact information, you also have a direct line to send them marketing offers and exclusive deals. At a minimum, you should put out a newsletter or some form of regular communication that highlights new product arrivals, along with upcoming sales and events.
However, this is just scratching the surface. To really take your customer loyalty marketing to the next level, you should segment your customers.
What does that mean? Essentially, it means filtering your customers by their sales history into different “buckets” which you can use for more targeted marketing. Here are some examples of different customer segments and how to market to them:
- Daily shoppers: Send deals on grab-and-go items like coffee, sandwiches, or single-serving snacks.
- Weekly family shoppers: Send deals on family-size items like ground beef, pasta, or bulk paper towels.
- Fresh food buyers: Send deals on produce, meat, and ingredients for cooking.
- Busy customers: Send deals on prepared meals, rotisserie chicken, or pre-made salads.
- Infrequent shoppers: Send deals on rare or specialty items that can only be found at your store to bring them back.
Why this works: If you send a deal on family-size cereal to someone who lives alone, they won't care. But send that same deal to a mom buying groceries for four kids, and she'll come in.
Related Read: How To Measure Customer Loyalty
4. Offer Member-Exclusive Deals
Speaking of loyalty programs, you can use the sales data on your POS system to see what categories of products your loyalty members buy and love the most, and start offering member-exclusive discounts.
This works similarly to how membership programs at larger grocery chains work, offering specific discounts on items that apply automatically when a loyalty member enters their information at checkout.
These deals help upsell customers and encourage more visitors to sign up for your free loyalty program (which, as we mentioned, gives you another way to market to them).
The good news is that modern POS systems make managing these discounts simple, so they can be applied automatically at checkout without cashiers needing to look up special functions or enter coupon codes.
So, which items should you discount? In most cases, member-exclusive discounts should be a mix of high-margin items and a rotating mix of staples.
Simple examples:
- Members get $1 off specialty cheese (you still make a profit).
- Members get automatic 10% off organic produce on Wednesdays.
- Members pay $2.99 for ground beef when everyone else pays $3.49.
This makes your best customers happy and brings in new rewards members. Plus, you still make money on the deals because you're discounting items where there’s room to cut prices.
Why this works: Everyone loves a good deal, especially if it’s free. Member-exclusive deals give new customers an incentive to sign up for a discount then come back to keep earning points. They also may encourage a regular shopper to make an impulse buy on an item they would otherwise pass up at full price.
5. Identify Opportunities for Cross-Selling
Do you know what products are often purchased together? If so, you can make efforts to cross-promote and cross-sell, increasing sales of both products!
You can offer special promotions and discounts when customers purchase complementary items. These efforts will boost each customer’s spend in your store, while also improving their customer experience through convenience and perceived value.
Common combinations include:
- Ground beef + taco shells + cheese
- Pasta + pasta sauce + parmesan cheese
- Chips + dips + soda
- Bananas + peanut butter + bread
- Milk + cereal + coffee
It’s also a great way to introduce new product lines by pairing them with existing bestsellers in a mix and match or buy one, get one (BOGO) deal.
You can also use this data to adjust your store layout. If customers frequently purchase cookies and milk together, it might be advantageous to place the cookie aisle beside the refrigerated section for simplified shopping.
Why this works: Cross-selling promotes upselling with impulse buys (“I might as well grab milk if it’s going to be 30% off!”) and is convenient for regular shoppers. Additionally, if you know your customers buy certain categories together regularly, cross-selling is a fantastic tactic for introducing new product lines and brands.
6. Boost Online Sales With Digital-Only Deals
Online sales are growing rapidly in the grocery world, and putting your store online is a great way to boost sales and show up higher in online search results. While it’s generally a good idea to match in-store and online deals for big events, having online-only sales can also be useful.
Here are a few ways to run a digital-only sale:
- Offer a fixed discount for first-time online shoppers: This is a great way to encourage people to try an online order for the first time — then, once they start using it, they’re likely to keep using it. You could offer $5 off their first order over $30.
- Hold digital-only flash sales on select items: If your inventory reports spot items that are overstocked, this is a great tactic to clear them from your storeroom (without having to put them on the shelves first).
- Offer online-only coupons: Use your customer loyalty data to send discounts on items shoppers have bought before, encouraging them to buy their favorites online.
- Offer free shipping on orders over a certain amount: Offering free shipping on larger orders is a good way to encourage customers to spend more. Instead of setting a random threshold, use your reports to find the right point that won’t eat into your profits.
Notice that each of these promotional ideas has a slightly different objective. Knowing the goal of your sales and events beforehand is essential because it provides a way to monitor their success.
Why it works: Online grocery is still relatively new, so discounts provide a low-risk incentive to encourage a hesitant customer to give it a try. Not only that, but online and in-store shoppers often behave a little differently (they’re almost their own customer segment), so crafting online-only deals is just a way of further personalizing your marketing.
7. Host Fun, In-Store Events
Local grocery stores have the potential to be community hubs in a way that most big chains could only dream of. Take advantage of your more personal touch by hosting promotional events, such as:
- Hosting local food companies for product tastings
- Cooking classes using ingredients you sell
- Cookouts, BBQs, and cultural events
- Local artists selling crafts while customers shop
Events are fantastic marketing for your small grocery store, giving you opportunities to connect directly with customers and show them (or their taste buds) exactly what makes you great.
Even for these in-person events, data can be incredibly helpful, both for picking an event theme and for the event logistics.
You might choose which tastings to host based on your most popular products or local suppliers. You can also review your reports to identify your peak hours, ensuring you plan your events for when there’ll be the highest food traffic.
For example, your data shows that you sell a lot of ingredients for Mexican food. Host a "Taco Night" event where a local restaurant demonstrates how to make tacos using ingredients from your store. People taste the food, buy the ingredients, and remember your store has everything they need for Mexican cooking.
Why this matters: Many shoppers want to do more home cooking or eat healthier, but aren’t sure where to start (and therefore aren’t confident in buying ingredients). Events offer a low-stress (and free) way to learn cooking techniques while also simplifying the process of tracking down the ingredients — and establish you as a helpful and trustworthy community resource.
Level Up Your Grocery Store Marketing
As a small business owner, you know that time is precious — and always too limited. Leveraging the data in your POS system can help you ensure you spend your time and money wisely on marketing campaigns that will move the needle for your business.
Of course, without a robust POS solution, you won’t have reliable data you can use for these campaigns.
On the flip side, the right POS system can help you with marketing, customer loyalty promotions, inventory management, lightning-fast checkout processes, and more.
If your POS solution is falling flat, consider upgrading to a system like IT Retail. Use our Build and Price tool to put together your dream system.
by Luke Henry
