The University of Michigan released its Consumer Sentiment Report a couple of weeks ago….and the results were unnerving…how does this bode for the supermarket industry?
- 56% believe the economy is in worse shape than a year ago, while only 36% feel conditions have improved
- Only 23% believe that economic conditions will be better a year from now
- 20% think their incomes are at risk of deflating in the coming year
What can supermarkets do to offer more value to customers? Where will growth come from? Innovation? Marketing? Increasing customer value—from product selection and availability? Reducing prices (but you need to reduce costs as well or margins will be further squeezed!)? increasing the number, varieties and quality of private label brands? Then what? How do you get your customers to try them? What else?
A recent article In Supermarket News discussed what Family Dollar was doing to add more value and build engagement among its 45,000 employees. The story focused on its private label, Family Gourmet and specifically, Family Gourmet cookies. It sent samples to all of its stores so that the employees could try them. It plans to run a contest shortly to see which store can sell the most cookies, giving cash prizes to the winners. The chain has such faith in its product that it:
- sent the cookies to the store for free
- encouraged the employees to try them
- is confident that their employees will be able to heartily and enthusiastically recommend the cookies….and sales will increase
- offered a guarantee of full price refund if the customer is not 100% satisfied with the product
This is a classic win/win situation….Engaging your employees so that they become your best salespeople! Isn’t that what every company should be doing? Compare that with my experience at the meat counter in Volume 2 of this blog….if the butchers behind the counter had honestly and enthusiastically recommended the turkey cheddar burgers….
Yesterday I was in Manchester NH with about 90 minutes to spare waiting for my daughter’s field hockey game to start. I had seen a Super Stop & Shop on my way to the field and decided to check it out. It is a big, bright, clean, beautiful store, equipped with Scan It! Technology. I scanned my Stop & Shop customer loyalty card at the Scan It! pick-up area. One of the digital hand-helds lit up, I removed it and off I went. I picked up a few bags so that as I scanned each item, I could also bag it.
I was like a kid in a candy shop; as I picked up each item, I scanned it, and bagged it. I felt like I was in Star Trek, putting my faser on stun – picking, scanning and bagging… When I scanned Thomas’ English Muffins, the hand-held immediately gave me a coupon for 50 cents off if I bought two packages. I did and the correct price was shown. It was a relatively small shopping order—I wasn’t buying produce and I didn’t have to remove any items that I scanned in error, but still, it was intriguing and fast.
When it was time to check out, I went to an unmanned check out counter, used the hand held to scan “End of Order,” scanned my Stop & Shop customer loyalty card and paid for the order. Done. This was a no hassle, no human interaction way to shop. It was, however, interactive in that as I put items in my cart, coupons came up or suggestions for matching items. So, is it more interactive….or less?
I knew that I was doing more of the work, but for this size order and this experience, I was OK with that. I noticed that few customers were using the technology. So tell me folks, what’s your experience been with this technology? Love it? Hate it?
Last weekend I took the opportunity to go to Costco and Trader Joe’s. I go to Costco 1 – 2X per month and Trader Joe’s less frequently, but I know that whenever I go to either store, I am going to have some fun and find something new: a treasure, an interesting product, or twist on a product. I shop at Costco for specific items and always end up finding a few treasures at great prices which is what the Costco experience is all about. Never mind all of the interesting samples that you can try!
In Trader Joe’s, I picked up a few items. When checking out, I didn’t have one of my recycling bags, so I added one to my basket. The cashier was friendly, and commented that I must be making fondue. He asked whether I had ever tried “fondueing” potatoes or chicken. I said no, but he assured me it would be wonderful! Then he asked whether the recycling bag was something I was purchasing (as opposed to arriving with it). I told him it was a new purchase, and he said that Trader Joe’s would give it to me for free! Compare these experiences with the normal humdrum of shopping in one of the “regular supermarkets”.
No wonder according to a recent article in Supermarket News, quoting an analysis from DSR Marketing Systems, “Supermarkets are losing share to alternate formats selling food. Figures from the 2007 Census of Retail Trade illustrated that although supermarkets sales grew by 18% between 2002 and 2007, sales at warehouse clubs and supercenters increased by 70% in the same time period”. The article went on to say that the supermarket share of the total grocery and foods market continued its long term decline from 66% in 2002 and is projected to be at 62% in 2009. As a matter of fact, last week my husband was in Target shopping for school supplies. When he came home, he asked, “Do you know how much food Target is carrying now?”
If you’re running a grocery store or chain, how can you compete with the above? What can you do differently to offer customers a better experience—whether it is fun, great customer service, ease of access, making it easy for customers to find the products that they are looking for, etc.?
What would it take to make grocery shopping more fun for you?
The proliferation of new and enhanced products has left supermarkets and their customers overwhelmed. How many options for Tide detergent does one really need to offer? How much shelf space can one supermarket allot to cereal—oat, wheat, natural, high in Vitamin X, no sugar, added sugar, cinnamon, raisins, flakes, shredded, kernels in four different sizes? Or salad dressings— low fat, no fat, creamy, and a myriad of flavors, recipes, and sizes? I get it. Supermarkets need to winnow out the number of SKU’s that they offer. The number of choices is overwhelming.
But….what if it’s one of your favorite SKU’s that’s cut? What if the brand of dressing that you specifically enjoy is one of the SKU’s that is removed? It happened to me. Lighthouse Dressing, a dressing in the produce section. One day, where my dressing is supposed to be, the section is filled with other product. I looked to see if it had been moved. No such luck. It’s gone. I asked the produce manager about it. He told me that the chain had stopped carrying it, saying he was surprised, because it was a “pretty good seller.” I asked how I could help to bring it back because for that Lighthouse Dressing, I would go to another chain (and spend more than the cost of the salad dressing). He said he would mention it, but it probably wasn’t coming back.
I wonder… relative to the SKU’s you have removed or are considering removing, how do you measure the result? Have customers changed to other SKU’s that you still stock? Have customers noticed? If so, have they spoken to your associates? Have you collected that data? Do you bring back SKU’s that customers ask for? Do customers go to competitors to find that brand or SKU? How do you know?
I had a delightful experience last week at one of the local supermarkets. This is a store that I am in 1 or 2 times per week, usually for a quick trip. It’s near the office, so I might stop in on my way to work, at lunch time, or even after work. These trips average anywhere from $20 to $40. It’s not where I do my primary shopping….. It’s an older store and sometimes it feels like it’s out of the Stone Age. Still….
I was checking out and the woman at the check-out was named, Charlotte. I remember that because, not only did she use my name when I gave her my credit card, but she looked at me and said, “Hmmm, Mrs. King, I’m pretty new here, but I’ve seen you in the store once or twice and I am trying to get to know some of the customers.”
WOW! And this is the store that I don’t use as my primary supermarket! Charlotte, I am going to remember your name and I put in a good word for you with the store manager, too. That’s customer service!
When I checked out of the grocery store today, the check out person asked me if I found everything I waslooking for. I did find everything, but even if I didn’t, so what? She didn’t look at me when she asked me; it felt like it was something that all check-out people are supposed to ask the customers… and it was too late! By the time I am at the check-out and ready to pay, I am ready to leave the store. I am not interested in hanging around, waiting for someone to go check the shelves, or even apologizing to me.
In the past, I have mentioned that I couldn’t find ‘X’, but then I didn’t see any evidence that the information was entered so that it could be tracked. So, why ask?
On Saturday afternoon, I needed a few items at the grocery store. It was a hot humid day and the coolness of the store was refreshing! First stop was the deli counter. The line at the deli looked like people were waiting in line for Santa so I picked a number and went on to produce, visually keeping track of my number. At this store, the produce department is right near the deli. The produce was outstanding—beautifully displayed and bountiful—luscious strawberries, so many kinds of apples (Pink Ladies are a King family favorite!), salad supplies, fresh herbs, red, orange and yellow peppers, and cantaloupe.
I was done in produce and my deli number was still 5 away, so I walked away, figuring I would pick up the items at the local corner store later. I then headed for the meat department, looking for teriyaki sirloin tips. I needed eight, but saw only 4 in the display bowl, so I asked the butcher if he had more. He did and went to get them. While I was waiting, I checked out the specialty meat display case and watched several butchers working on cutting various pieces of meat. One item in the display case grabbed my interest—turkey cheddar burgers. Hmmm. They were oversize and I could see little chunks of cheddar in the burgers. I asked one of the butchers, if he’d ever tried them. Unfortunately, he hadn’t…and neither had three of the other butchers working behind the counter! So, I passed. Next time I go to the store, maybe I’ll ask again. Depending on the answer, I might even buy a few to try them out!
$187.13 and 53 minutes after I entered the store (I did see a friend and chatted with her for a minute or two), I’m on my way.
See you on my next adventure!
Welcome to my blog.
Between shopping for my family, for the office, for charitable donations and for the entertaining that we do, I estimate that I spend in excess of $20,000 per year at grocery stores. There are other places I visit more frequently (and spend a lot less at!)—whether it’s a a favorite restaurant, hardware store, country club, the dry cleaner—at which people know me, call me by name, greet me warmly or at least with a smile or a look of recognition that says that they welcome my business. Not so in the grocery store….why?
I understand that supermarkets are big business, and I see that many of them spend millions of dollars on loyalty programs. Are these programs successful? Are they spending money on the right things? Could they change the way they do business and get real customer loyalty without the “loyalty programs”? Am I viewed as a commodity by the grocery store? Am I the only one this happens to? I’m generally a fairly low-maintenance person, don’t draw attention to myself, and am not looking to be the big “I AM”! I am looking for what I regard as basic customer service….
Within a five mile radius of my home, I have eight shopping options for groceries.
For a variety of reasons, I don’t shop at all of them. I don’t grocery shop at 4 -5 of them at all. I shop primarily at one of them and occasionally at two other stores. Someone could earn my business and my loyalty by making me feel like they valued my business. I wonder if you have other customer s like me. If you do, then for customers like me, you don’t need to spend millions of dollars on a loyalty program, just act like you appreciate my business or learn my name.
More adventures to come…