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United Fresh 2012: Retailers Still Face Reluctant Shoppers

United Fresh 2012: Retailers Still Face Reluctant Shoppers

DALLAS — The economy may be slowly improving, but consumers still have less money to spend on food than before the recession.

More than half of shoppers — 61% of the population — are “survivalists,” said Thomas J. Blischok, chief retail strategist and senior executive advisor of Booz and Co., at the “Understanding Today’s Changing Retail Trends” workshop at the United Fresh Show in Dallas last week.

“Every day they go to the store they think about, ‘What can I buy? What can I afford? And what can I not buy?’” Blischok said, noting these survivalist consumers are typically heavy coupon users.

In addition, 35% of consumers are “selectionists,” who opt in and out of different categories, he said.

A lack of emergency savings adds pressure on cash-strapped shoppers of all ages.

When surveyed, 61% of Millennials, 65% of Generation-X consumers, 60% of Baby Boomers and 47% of seniors said they do not have $2,000 saved in case of an emergency, according to Blischok.

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“This is the first time in history we’re seeing this kind of economic instability where shoppers don’t have access to $2,000,” he said.

With limited savings, limited spare time and more concern about retirement savings, retailers can bring in more customers by providing a comfortable experience within stores and simplifying shopping in store.

“The reality is that they’re looking for comfort,” Blischok said. “Whenever you have fears you look for comfort.”

Perishables departments in particular can do more to make shopping easier for consumers. Blischok pointed out how much longer it takes to find the right apple than to pick out a specific kind of canned soup.

One way fresh departments might change shopper experience is by looking at the way they merchandise.

“So one of the mistakes that I think most grocers make is they put categories in the store the way they want to put [them] in the store, not the way people buy,” Blischok said. “So ask yourself do you have the opportunity to change some of the displays.”

He advocated bundling products, such as creating a Greek salad display with all the ingredients in one place so shoppers don’t have to cross the store several times to put together a meal.

“Merchandising displays will drive an average basket up about 22% to 25%,” Blischok said.

Also, interesting displays can pique shopper interest, and large displays with lots of product can give category authority.

“I’m not suggesting you fundamentally go change what you do for a living. But I am suggesting that if you’re going to compete, you’re not going to compete by stacking and racking stuff the way you have in the past,” Blischok said.

With the many, many products available in grocery stores now, retailers could benefit from simplifying how to find products. Blischok noted that several retailers are moving from grouping by category to creating departments, and others are creating smaller stores with a limited assortment specifically catered to the needs of their surrounding neighborhoods.

“The question you have, is when you put products in stores if people can’t find them in 7 and 15 seconds, you’ve got the wrong display because what you want to do is take the 20-minute shopping trip and reduce it to 15 and give people 5 minutes to browse.”

There’s draw in consumer education in displays, too. Blischok observed that with some stores offering nearly 50 different kinds of apples, it’s important to teach customers how to use products, and what the different flavors and textures mean.

Spending time on merchandising and simplifying displays in perishables departments can have a big impact on which customers come to the store. Blischok said customers tend to say that the quality of perishables is a top concern.

Growing retailer emphasis on store experience reflects customers’ new definition of value.

“The American consumer has redefined value as quality received per dollar spent. It is critical that you recognize that phraseology because it’s not just price,” he said.

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