Competing trends around convenience and customization are playing out in the bakery department.
Retailers are seeking to balance consumers’ desire for quick-and-easy, self-service shopping solutions against demands for the individual attention afforded by full-service bakery cases and the added labor costs that go with them.
For many companies, a combination of full-service bakery cases for custom orders and self-service cases for standard products can help meet the diverse demands of today’s customers.
At Riesbeck Food Markets, St. Clairsville, Ohio, the company is migrating toward the implementation of full-service bakery offerings, but at the same time is seeing good results from a test it has been conducting for the past several months with stand-alone freezer cases, said Peter Barbaro, bakery program director at the regional chain.
“Our sales went up, shrink went down, and profitability went up” in the initial test of a five-door freezer in a single store, he said.
The longer shelf life of products in the self-service freezer case reduces shrink and helps the company maintain a more complete inventory of products that might not move as quickly as products in the full-service case, Barbaro explained.
“I can put the full cake set out any day of the week, even sugar-free items,” he said.
In addition to sugar-free items, Barbaro said Riesbeck’s also is merchandising “standard, everyday cakes” in the freezer cases, along with its new quarter-sheet filled cakes, which have a high ring and thus need to be protected from shrink.
Another benefit of having a combination of full-service and self-service cases is that they can alleviate the need for service bakery personnel to leave the counter area to search for stock — customers can often find what they need in the self-service cases without the need for a worker to leave the counter area.
Small grab-and-go items, such as single-serve cake slices and parfaits, should be merchandised separately to optimize foodservice sales — next to the deli or salad bars, for example, Barbaro pointed out.
Despite the success of the self-serve freezer, Barbaro said full-service is the wave of the future at Riesbeck’s.
“Full-service cases are the way to go,” he said. “One of the main benefits is the one-to-one interaction with the customer. It gives you opportunities for different things like suggestive sampling, and the ability to talk to customers about other areas of the bakery department where you have sale items.”
In addition to creating opportunities for customization and upselling, full-service cases also provide more opportunity for customer feedback, Barbaro pointed out.
“Most of the time, the feedback is good, but sometimes a customer will tell you that you ran out of a certain product they wanted last week,” he explained. “With a self-service case, you are not going to get that feedback for the most part. With full-service, you can have those opportunities for additional sales.”
Opportunities to upsell
Pete Hejny, executive director, service deli/bakery at Unified Grocers, Los Angeles, agreed that the potential to drive increased sales through customer interaction is one of the strongest arguments for full-service bakeries.
“You can have a customer service representative try and upsell customers to a bigger cake, or a more expensive cake, or something in addition to that,” he said.
In addition, the bond that customers and bakery personnel form through regular interaction can help drive loyalty and increase customer satisfaction.
Full-service bakeries also connote a higher level of quality in the mind of the consumer, he noted, and create more opportunities for creative and attractive presentations.
“There’s obviously benefits to both — it’s a matter of what you want to be to the consumer,” said Hejny.
Both Hejny and Barbaro pointed out, however, that retailers have to carefully weigh the costs involved in operating a full-service case. Those costs include not only the cost of training so that workers can accurately answer customer queries but also high levels of staffing so that workers are always available to provide service.
“Staffing a service case takes a lot more labor, and if that case isn’t staffed, you are likely to run into frustration on the part of the customer,” said Hejny. “It’s likely to leave a bad taste in their mouth, not just for the bakery but for the entire store.”
Matt Lally, Chicago-based manager of analytics and insights at Nielsen Perishables Group, noted that the evolving composition of consumer households is driving shoppers’ bakery shopping habits. Smaller households, the growing divide between high- and low-income households, and the growth in ethnic populations are all driving consumer preferences, he said.
The trend toward smaller households, for example, can be seen in the increasing popularity of “mini” and single-serve dessert items, such as mini pies. Unit volumes of single-serve pies rose 56% in the last year, according to Nielsen.
Several retailers have accommodated this trend by expanding their array of individual-sized desserts, including Riesbeck’s, which in the past year introduced single-serve parfaits and tarts in 3-inch, 5-inch and 8-inch varieties.
Bakeries need to allow consumers to have the flexibility in their shopping to meet their individual budgets and taste preferences, Lally said.
“You may know that not everyone in your household likes glazed doughnuts, or blueberry muffins, so you need to be able to pick and choose the product offering that suits your needs,” said Lally.
“Personalization has become critical,” he said. “People want to have a small degree of control.”