Supermarket nonfood executives are constantly on the hunt for new and exciting products.
Their expeditions might take them to other countries, or to multiple trade shows across the U.S. When they are in their home offices, it might cause them to give a small vendor offering something special in their marketplace as much importance as a representative from a large packaged goods company.
The increased quality of imported products sold for competitive prices are a key factor, allowing them to bring in more variety of good quality products at low prices, but ones that are higher than sometimes seen in supermarkets. In addition to the old standbys of housewares, toys and entertainment items, retailers are betting on more soft goods, such as apparel and home textiles, stylish carrying bags and luggage, nontraditional gift items, and the latest designs and fashions in a wide range of categories, including cookware.
"To be competitive today, we need to stay at the forefront and try to stay ahead of the colors, fashions and designs," said Mike Lumadue, director of HBC and GM, Weis Markets, Sunbury, Pa. "You can't be afraid to take chances in the future. If you're conservative and you do the me-toos and the this-worked-befores, you're never going to get ahead. You've got to take chances to differentiate yourself."
Among the shows Weis and other supermarket companies attend are GMDC's marketing conferences, ECRM's Efficient Program Planning Sessions, and the co-located International Home and Housewares Show and the Association of Retail Marketing Services Retail Promotion Show this month in Chicago, where the interviews for this story were conducted.
At the office, "I challenge our team to see just
about everybody that we can," Lumadue said. The retailer already knows for the most part what the big manufacturers are doing, "but when it comes to points of differentiation, the smaller guy is probably going to have something unique. [These products] bring a more exciting shopping experience to our customer."
Associated Wholesalers, Inc., Robesonia, Pa., goes out looking for new vendors, said Tom Merrick, GM category manager. "A lot of the smaller companies cannot go out in the field and this is the only shot they have, so they're very hungry, and we're looking for hungry suppliers," he said.
"A supermarket company has got to really go out and hunt and scratch, and basically peck, to find a unique type of item - an impulsive item that maybe the customer isn't going to see someplace else," Merrick said.
Such products are important to supermarkets, said Jon Hauptman, vice president of the consultant firm Willard Bishop, Barrington, Ill. "In today's incredibly competitive environment, retailers need to look for a way to stand out from all the other formats that are selling food, such as the supercenters. One great way to do it is through variety, particularly through unique products," he said.
FOREIGN MARKETS
In terms of sourcing such products, Hauptman said retailers are becoming very proactive for the first time at going out to foreign markets. "They're going directly to China, India and South Korea," among other places. "They're finding products that nobody else has seen yet and making sure that the first time the shopper sees it is in their stores," he said.
"In an environment in which there is very little growth, unique products can be a foundation stone for growth. That's something that every supermarket operator should be looking for," Hauptman said.
"The influence of imported product is very significant because of the cost relationships," said Jay Goble, vice president, merchandising, Valu Merchandisers, Kansas City, Kan. "I think you are going to see less branding and more new ideas, more new products."
Valu goes to between eight and 10 trade events a year in search of distinctive offerings, Goble said. "On the general merchandise side of the equation, they are equivalent to national launches of new HBC products. New items are very important to incremental sales and competitive growth," he said. Goble doesn't put the small vendors above the big companies, "but it would be foolhardy to restrict your offering to the larger suppliers."
Like others polled by SN, a nonfood executive with a Texas retailer said his chain relies on both trade events and buying office calls to find items the competition doesn't carry. "To me, we must have unique promotions to compete with the big guy," he said.
Compared to the big packaged goods companies, small vendors of unique items "are more of a priority because you get a big lift off of these kinds of products if you pick them right," he said.
Successful examples cited by the Texas retailer included promotions of purses, wallets, dishware and cookware. Looking around at the ARMS show, he observed, "There's some nice luggage here this year; I think it will do well." Good merchants are always searching for new and different things, especially if they are packaged well and presented in a way that's easy for the grocery retailer, he said.
BUILDING TRAFFIC
"We're here to look for unique products, unique categories, and to see what we can do to generate some additional traffic within our stores in the GM categories," said Jim Wonderly, who recently moved from Ahold's American Sales Co. to become vice president of nonfoods at the Dutch firm's Stop & Shop Supermarket Co., Quincy, Mass. Products found at the Housewares and ARMS shows "help us to differentiate ourselves from the other retailers that are out there and meet our customers' unique needs," he said.
Like new item introductions, "unique products are the lifeblood of our industry," said Mike O'Shell, director, GM and HBC, the Penn Traffic Co., Syracuse, N.Y. "We have the same customers shopping in our stores up to two or three times per week, so changing the mix so it doesn't become another mundane shopping trip adds more variety to the experience." This, in turn, leads to more impulse sales, he said.
"We're like everybody else. We're looking for items that can add to our sales," said Dan Spears, director of HBC and GM, Ingles Markets, Asheville, N.C. "We look for things that are a little bit different than what we see in some of our competitors and not too many of those companies come to you, so you rely on going to the trade shows to see these items."
To source those products, a GM executive with a West Coast chain said he relies on trade shows and specialty distributors. "It's incumbent on us as a retailer to stay very involved with trends, new items, customer solutions and lifestyle changes," he said.
Staying on top of trends and new ideas also means checking out what other retailers, particularly specialty stores, are carrying, he said.
ARMS AROUND UNIQUE ITEMS
CHICAGO - Once in its history, the Retail Promotion Show of the Association of Retail Marketing Services, Red Bank, N.J., was all about continuities, but now it has become a treasure hunt of unusual items that supermarkets can promote. Co-location with the International Home and Housewares Show of the International Housewares Association, Rosemont, Ill., has given supermarket executives that much more to look at in one venue.
Unique products are important to supermarkets "because the consumer is looking for the convenience of having them there so they don't have to go to other stores," said Gerri Hopkins, executive director, ARMS.
"These items give shoppers a chance to make impulse purchases. They say to the customer that 'we want to give you more than just a food shopping experience; we want to give you an experience that will help make your life easier,'" she said.
With retailers like Wal-Mart Stores and Target getting heavily into food, "we have to try to get more nonfood, unique items into supermarkets so they can effectively compete," said John Tucker, president, VAM Corp., Southboro, Mass., a former nonfood executive with Northeastern supermarket chains.
"They are now getting into soft goods and getting into textiles. They are doing a little bit of everything. I don't think anything is off-limits anymore," Tucker said.
This is not restricted to large supermarket formats, he said. "I'm talking about a typical 30,000-square-foot supermarket all the way to the superstore supermarkets - all over the board," he said.
"Supermarkets want to capture trends and appeal to the masses," said Adam Napell, principal, Hog-Nap Promotions, Warren, N.J. "They've got the traffic and anytime they can create incremental sales dollars with something that is going to catch someone's eye, that might cause them to buy something they didn't intend to buy while they're in the store.
"The future is bright as long as we can continue to come up with new and unique products because there is a dearth of them. It's our job as vendors to constantly be looking and sourcing and pushing to try new and unique things because supermarkets have traditionally been a little bit shy about being on the cutting edge."
"Last year was all about color. This year it's about pattern, color and style," said Kimberly Batarse, executive director, Megaware of California, Camarillo. "Having a unique offering on a consistent basis is probably the most important thing that supermarkets need to focus on, based on bringing something new and creative to your customer base."
