LAS VEGAS -- Best practices for the merchandising of ethnic fresh foods require defining a look, tailoring the offerings to ethnic shoppers, and enhancing the in-store experience to reflect native shopping habits, according to industry experts who spoke at the annual convention and exposition of the International Dairy-Deli-Bakery Association.
Willard Bishop, president of Willard Bishop Consulting, Barrington, Ill., and Terry Soto, president, About Marketing Solutions, Burbank, Calif., presented a breakout of fresh foods data contained in "Grow with America," a study published by the Coca-Cola Retailing Research Council of North America.
Defining a look can be as simple as re-thinking product sets to be more ethnic-friendly, or as involved as opening new banners, such as Nash-Finch's new Avanza stores.
"Probably two-thirds of all ethnic shoppers have just come to this country," Bishop said. "They need to be invited into stores."
Of all the fresh foods departments, produce is in a position to act as the gateway to the rest of the store. To that end, Soto said the lack of ethnic brand names in the bins can be compensated for by giving produce 20% to 40% more space to accommodate specialty items. Large waterfall-style displays should be the norm, though it's permissible to include fewer varieties of any single sub-category.
For instance, a retailer looking to attract ethnic shoppers wouldn't have to include 15 varieties of apples, as long as the basic three or four types favored by that particular group were stocked in number.
"Display your key products at the beginning of the shopping trip," Soto said. "Allow them to see mass merchandising displays of whatever those staple items happen to be."
In tailoring ethnic products to those customers looking for them, retailers should be careful to set prices that reflect ethnic sales volume, she said. Having the right sets -- but at the wrong price -- is just as bad as not having them at all, Soto said.
Recent immigrants may be intimidated by American stores. That's one reason why brand names are popular with these new arrivals, since they serve as a touchstone with their native country. In produce, however, familiar varieties of fruits and vegetables take the place of those brand names, Soto said.
"They come to this country with very Old World, almost European traditions, and as they travel along the continuum of acculturation, they do become more sophisticated, and they start to adopt more American products" she said. "But they don't come here with an [American] supermarket mentality, because they're coming from less industrialized nations with different socio-economic situations."
Implementing best practices to succeed in ethnic merchandising requires overcoming several obstacles. According to Bishop, the efficiency-oriented business models being pursued by consolidated retailers today are resulting in product-assortment decisions that are centralized. Such a strategy hinders development of ethnic food sales, which are often built on a store-by-store, neighborhood marketing basis.
"Frankly, senior executives in the retail business are preoccupied," he said. "Some of them haven't come to grips with the potential here because they haven't been out [in stores] enough to see it."
The effort is worth it, according to the Coca-Cola study, since ethnic Americans spent $142 billion on food for home at supermarkets during 2000. Furthermore, the statistics show that ethnic communities generated 37% of total supermarket sales, led by Hispanics ($54.4 billion), African Americans ($51.5 billion) and Asian Americans ($25.3 billion). The remaining groups purchased $10.8 billion on ethnic food items.
Retailers can enhance the in-store experience through effective communication, using all forms of media. Soto and Bishop said the study found that, among the more effective tools are using badges that identify bilingual employees; using service departments as springboards for ethnic customer intercepts and interaction points; mixing ethnic selections in in-store music tracks; repeating public-address promotions in other languages; and training staffers that such ethnic initiatives can enhance, rather than compromise, service to non-ethnic shoppers.
"You do get a little backlash, but you have to be prepared for that," the report quoted one vice president of merchandising and buying as saying when asked about employee education efforts. "I think that for the most part those are the exceptions, and I don't see us changing the way we do business because of it."