In today’s competitive environment, supermarkets can’t just sell food. They have to sell an experience. That reality informed every presentation and shaped almost every conversation that happened at Supermarket Sense, a food retail training conference that recently wrapped up just outside Atlanta.
Sessions on saving the center store, reinventing the perimeter, tapping restaurant trends to drive supermarket sales and designing and merchandising delightful in-store spaces reflected grocers’ need to remain competitive amid unprecedented industry change. Two data points offer a view of the challenges:
- Online grocery sales in the U.S. grew 11% annually from 2011-2016, according to IBISWorld’s market research report. It’s now a $12 billion-a-year business.
- Meanwhile, supermarket trip frequency decreased by 19 trips a year, on average, during that same period, according to global research firm Nielsen.
The solution, industry experts say, is engaging supermarket customers with an in-store experience that beats shopping online (or anywhere else). “Shoppers have more ways than ever to buy groceries. Even perishables like produce are now available through major online retailers,” noted Henry Pellerin, vice president of marketing for Hillphoenix, which hosted Supermarket Sense at its Learning and Design centers in Conyers, Georgia.
“Shoppers may not need to go to their local supermarket as they once did,” he said, “so food retailers must create a relevant, captivating experience that makes them want to go there.”
Saving the center store
Supermarket Sense kicked off with a critique of the center store by well-known food retail industry expert Harold Lloyd. He told participants, who represented food retailers and suppliers from around the U.S., that the centers of their stores are stuck in a time warp.
“We’re going up against online shopping that’s fast and entertaining, and products in the center store are particularly vulnerable to online competition. Yet, those long, boring, rectangular aisles haven’t changed in decades,” Lloyd said. The center store still drives some of the strongest margins in the supermarket, but he warned that won’t last if grocers don’t take a hard look at how to make those aisles interesting to shoppers.
He pointed to the prevalence of “dippers” — shoppers who leave their carts at the end of an aisle and run halfway down to grab what’s on their grocery list — as evidence of the problem. “It’s such an uninviting environment that shoppers don’t even want to push their carts all the way down the aisle,” he said. “That’s a serious blow to impulse buys.”
Lloyd recommended grocers begin combating the center store problem by breaking the category management and shelf optimization cycles. Then he advised giving up shelf space to allow for creative, inviting merchandising. Put a cascade of bananas in the center of the cereal aisle. Give away coffee in the middle of the coffee aisle. “The bottom line: Sacrifice four feet of slow-selling SKUs to help everything on the aisle sell faster,” he advised.
Showing products’ true colors
Hillphoenix’s Margie Proctor and Jack Sjogren led an educational session on how to use lighting to set a mood and display products to their best advantage.
“Whether it is lighting in the display case or around it, the right choices in colors and brightness help set the stage for enhancing products. Colors evoke emotions. The proper use of them in lighting can engage supermarket shoppers,” Sjogren said, noting it isn’t a strategy aimed at deceiving the customer. “Proper colors and lighting techniques simply highlight the best of a food product, allowing shoppers to see the silver scales and white flesh of fish or the freshness of lettuce.”
Proctor noted that advances in lighting technology are giving grocers more merchandising choices than ever. “Grocers who embrace these strategies are potentially blazing a trail and gaining an edge,” she advised.
Making every package count
Prepared foods are an essential part of the modern supermarket experience. A good program offers not only craveable food, it also delivers it in smart, consumer-friendly packaging, said Dr. Keith Vorst, director of the Polymer and Food Protection Consortium at Iowa State University. He advised food retailers to take control of their prepared foods packaging by working with — and guiding — suppliers.
“Strong, interactive relationships with packaging suppliers are crucial to successful food retailing,” Vorst advised. Often, these relationships have a “legacy quality” in which grocers simply accept the products offered, he said.
Food retailers should ask suppliers plenty of questions to ensure packages meet the needs of the store and their shoppers:
- Are the food items frozen, refrigerated, at room temperature or hot?
- How will the packages be stored? Will they be stacked? Nested?
- Will the packages fit into a specific type of refrigerated or heated display case?
- Will the consumer need to reheat the food in the microwave?
The right packaging can help grocers control costs, reduce waste and create more enticing prepared food offerings. “Retailers are not at the mercy of packaging suppliers,” Vorst said. “They can ask for packaging options that work best for them.”
Supermarket Sense sessions like Vorst’s addressed the challenges grocers face as competition and innovation reshape the industry. Presenters covered a wide range of topics, but the experts all offered one key piece of advice: To thrive in today’s environment, supermarkets must create relevant, engaging in-store experiences that keep shoppers coming back.