Can Great Customer Service Reduce Shrink?

We all know about shrink… the loss of product inventory.

But a recent article published on datecheckpro.com offered some interesting perspective for supermarkets on how they might reduce shrink.

As you most likely are aware, shrink falls into two categories—operation management issues and theft. When shrink occurs in a supermarket, it differs from the retailers based on grocery items expiring. Supermarket shrinkage is usually higher than all retailers.

The article went on to cite a 2012 shrink study by The Retail Control Group, which indicated:

  • Operational factors contributed to around 2/3 of all retail shrink
  • Shoplifting accounted for 36 percent of all theft-related shrinkage
  • Cashiers account for 31 percent of theft and general employees another 25 percent
  • Vendor theft accounts for the remaining 8 percent of theft-related shrink

Solutions?

The article offered a few thoughts on reducing shrink.

  • Correcting ordering and receiving processes while maintaining an integrity driven inventory count, can help minimize losses from inventory problems
  • Minimizing damaged products by handling products carefully will add to the reduction of losses
  • The best ways to minimize theft is though great customer service, and by conducting thorough background checks when hiring employees
  • Train and compensate appropriately while maintaining positive working conditions (engagement!) to reduce internal theft by employees

For additional perspective on shrink and other common challenges faced by supermarkets, you might like to review this free whitepaper, “Supermarket Challenges & Opportunities” on our website.

Supermarket Shoppers Looking for “Customized” Solutions

Today’s consumers are looking for products that feel customized to their individual needs and wants, according to a recent SupermarketNews article.

The definition of “customized” may vary, according to a survey by Nielsen that is referenced in the article, and might include:

  • Convenience
  • Health and wellness
  • Package or portion size
  • Made-to-order deli meals

The bigger challenge for supermarket chains might be the simple fact that customer profiles can vary significantly from store-to-store, as noted by Jennifer Campuzano, director of fresh perishables at Nielsen.

“I think that to truly understand the personalization aspect, you need to understand the right products to carry by store. And to do that you need to understand who your customers are,” said Campuzano. “I don’t know that you can do this on a broad scale, because your customer base is going to change so much from store to store.”

It seems the trend of striving to meet customer preferences is continuing to grow, which we can only hope will lead to increasingly better levels of customer service and engagement.

Can the “Grocery Outlet” Concept Grow?

An interesting discussion about Grocery Outlet’s growth potential was shared recently on RetailWire.com.

As you may know, Grocery Outlet buys “opportunistically” — i.e., surpluses, seasonal closeouts, discontinued items, packaging changes, etc. — and offers these items at low cost. Each store is a local, independently-run business as well.

While the lure of low prices and the attraction for those among us who might be called “food adventurers” are assets, most people seem to think that buying “seconds” works better in the apparel market rather than the supermarket.

As one person suggested, “Wearing last season’s sweater isn’t the same thing as eating last week’s hot dog.”

In addition, since the focus is on low cost, others were concerned about the “shopping experience” and customer service (or the lack of it), and not being reasonably sure that the same items would be available week-after-week.

What are your thoughts? As the RetailWire article asks, do you think Grocery Outlet will become the TJX of groceries?

The “Customer of One” Approach to Supermarket Marketing

In a recent article posted on progressivegrocer.com, Gary Hawkins, founder and CEO of Center for Advancing Retail & Technology (CART) shared some interesting perspective on current marketing trends used in supermarkets and other sectors of the consumer packaged goods (CPG) industry.

Comparing traditional marketing practices and costs with the newer “customer of one” approach, Hawkins paints an intriguing picture of how supermarkets, manufacturers (brands), and consumers might simultaneously enjoy the benefits of leveraging today’s technology.

“Let’s imagine you are a brand manufacturer and you have just one customer to focus on; let’s call him Joe,” he writes.

“You would want to learn all you could about Joe, but most importantly, you would want to know how often he purchases from your product category and your share of his category business. You would also want to understand Joe’s brand loyalty and discount propensity.

“Armed with this knowledge, you would then want to promote to Joe just before he’s due to make his next category purchase, aligning brand promotion activity to Joe’s purchasing cycle, ideally communicating the right offer (knowing Joe’s discount propensity) at the right time (easy to do in today’s digital world), and in the right place (including in the store as he’s approaching the category).

Over time, you would want to grow Joe’s value to your brand by increasing his purchase frequency, up-selling and cross-selling into larger package sizes, multiple units, and related products.”

The “customer of one” method enables the brand as well as the supermarket to enjoy more regular patronage and sales revenue while spending less of their marketing budget, while the customer enjoys the benefit of shopping with less effort and at lower cost.

And, as noted in various other posts, it seems the trend toward customer-driven decision-making continues…

More “E’s” Coming to SupErmarkEts?

A recent SupermarketNews article reported that Super Foods, an independent operator in southwest Alabama, is launching an online grocery program, which is scheduled to begin in mid-August, according to the e-commerce provider.

Said Lillian Wilson, the retailer’s HR director, “Our customers have been asking for online ordering, and we’re pleased to be able to give it to them.”

The online offering will make available Super Foods’ entire inventory, with online prices that will always match in-store prices and a choice of curbside pickup or home delivery for what it called “a small fee.”  The chain is also building a mobile shopping app that will sync with online ordering, including a built-in bar code scanner that will let shoppers scan any item to add instantly to their shopping cart.

Along similar lines, in a recent Viewpoints editorial author Andrew Levi suggests that supermarkets might “cash in” by making each trip to the store more fun and “engaging” via some type of app like “Pokémon Go.”

As you may well be aware, the game launched earlier this month and has become quite a phenomena!

“It’s no wonder that retailers, advertisers and marketers are already beginning to explore how to capitalize on this momentum by using lure modules on a “Pokéstop” in the game to attract more users to a certain area, such as a store location, so there are more Pokémon to catch,” said Levi.

Looks like the “E” trend in grocery shopping is continuing!

3 Supermarket Shopping Demands & the “War on Big Food”

With more and more consumers becoming informed about the health benefits of natural and organic food products, it is inevitable that grocers will need to increase their fresh produce selections and increase their marketing efforts around these departments, which are typically located in the perimeter areas within their stores.

According to a recent article published by KDM P.O.P. Solutions, three specific consumer demands will reshape the typical supermarket over the next several years:

  • Healthy and natural
  • Local and fresh
  • Organic and unprocessed

These consumer demands will continue to rise and this trend effects the whole grocery shopping experience, the article suggests, noting that 75% of consumers choose which retailer to do their shopping at based on the store’s produce department.

And according to Supermarket News, 43% of health conscious consumers choose a shopping destination based on their organic food selection, while 32% seek foods grown locally, and another 28% look for natural, fresh foods.

Shoppers are indeed skipping the middle aisles, where most all “Big Food” packaged brands are located, and heading toward the store’s perimeter, where fresh foods are found.

Steve Hughes, a former ConAgra executive who now runs natural food company Boulder Brands, believes so much change is afoot that we won’t recognize the typical grocery store in five years. “I’ve been doing this for 37 years,” he says, “and this is the most dynamic, disruptive, and transformational time that I’ve seen in my career.”

 

Added Focus on Food Shoppers Aimed at Driving In-Store Traffic

Walmart’s  grocery aisles are getting an upgrade, according to a recent article in USA Today.

The company is hoping to entice customers and boost sales with more emphasis on organics, selection, wider aisles and new bakery goods.

“In the U.S., there’s been a really big step change in grocery retailing in terms of the standard of stores,” says Stewart Samuel, program director at IGD, an analytics firm that tracks grocery retailers.

The theory behind the change has been that by offering enhanced and more “exciting” products along with a greater shopping experience, supermarkets will draw more people into their stores; and the increased traffic will yield more revenue.

However the article also goes on to note that all supermarkets face multiple challenges to their overall business. First, a marked increase in on-line shopping, which means customers may be less likely to visit a store.

Plus, more big retail chains are making food a priority.

Looks like the battle for market share and wallet-share continues… and it’s nice to see that the customer experience has become a key driver!

Great Customer Service Story at Hannaford!

My wife is still recuperating from a broken ankle, and finds it difficult to walk through the grocery store. Consequently, I’ve been doing the majority of our food shopping, equipped each trip with a list and very specific instructions!

This past week, however, we were in need of a Boston Fern for our back porch and the odds of my selecting the properly-sized and conditioned plant were not good. So off we went, first to the nearest garden center, then to one of the big box hardware-and-more stores. Neither had a suitable choice, so we switched gears and headed toward the local Hannaford Brothers supermarket.

The effort of walking through the first two stores was taking it’s toll, so my wife opted to call the supermarket to see if they even had any ferns.

Our car is equipped with Blue Tooth, and I heard the person working in the produce department answer the phone with a cheery tone. He listened carefully to my wife’s query about the right-sized Boston Fern…

“Well we have one fern left in stock,” the man said. “And I think you’ll like it! It has done well under the store lights and we keep up with watering and care.”

“Okay, sounds promising,” came the reply.

“I’d be happy to put it on hold for you… how long before you can get to the store?”

“We’re actually pulling into the parking lot right now,” my wife told him.

And then, without having any possible way of knowing about my wife’s healing ankle, he offered to bring the fern outside for us to see!

“Just drive-up,” he said enthusiastically. “I’ll be the guy standing in front of the store holding a Boston Fern!”

Without having to leave the car we were able to determine that the fern was, in fact, in good condition; and it was the right size! The Hannaford Associate then waited while I parked the car, and walked with me to the “self checkout” aisle inside, where he helped me quickly process the transaction.

It was, I thought, a great example of customer service, which will keep us coming back!

 

Supermarket “Personality!”

A recent discussion by a group of grocery executives focused on some big changes in the marketing and customer loyalty areas.

“When a customer visits your business, you’re not just selling the items on the shelf…,” says author .

“But rather the entire in-store experience, so make that experience exciting! Engage with your customers from the moment they walk through your doors.”

In a recent American Express Open article, Beightol listed a number of best practices for generating customer loyalty and engagement, which include:

  • Extend the relationship beyond the transaction through the use of social media
  • Make prudent use of “personalized” email messages promoting limited-time special offers or products of interest
  • Target lapsed customers through personalized email campaigns that highlight what’s different about your store
  • Send push notifications to loyalty program members
  • Recognize it is a consumer-driven world, and it is important to keep up! Refusing to innovate can be annoying to customers, which may prompt them to visit a more contemporary and convenient competitor next time around

“The goal should be to turn every customer into a loyal one,” says Beightol.

“How do you do that? Show the personality behind your brand!”

Hannaford Opening “Next Generation” Supermarket in NH?

A recent story posted at unionleader.com announced the opening of a “new concept” store in Bedford, NH by Hannaford Brothers.

Not only is it the chain’s biggest store in New Hampshire , but it also offers more amenities, including:

  • Made-to-order food to eat at the store or take out
  • Hannaford “on the go,” so shoppers can do their food shopping online and pick up at the store
  • Customized cutting of fruits and vegetables
  • A brew room with more than 230 kinds of craft beer
  • An extensive wine selection
  • A “grab-and-go area” for popular items

“This is going to be a learning laboratory to figure out just how effective certain services are when put together and offered in a large store,” Hannaford spokesman Eric Blom said. “This will really inform the design and remodels of large Hannaford stores in the future.”