Tag Archives: 2016 retail trends

Can Digital Resources Solve Grocery’s Inventory v. Profitability Dilemma?

“The biggest challenges that grocery retailers face is excess inventory and profitability,” says Randy Evins, Senior Principal for Food, Drug & Convenience at SAP.

In a recent SupermarketNews article,  Evins explains that grocers face the dilemma of keeping their margins low by spending less while still delivering quality products. More labor requires higher costs, but without the additional attention to fresh foods, products will not be up to standards.

The solution: Grocery retailers should leverage digital resources and process improvement to more easily monitor, plan and execute their efforts.

“It’s critical that grocery free themselves from the constraints of doing everything manually.” Elvin says.

“Automation of simple tasks can help ensure manpower is used in more critical roles rather than routine monitoring and conditions management.”

The article goes on to present ways in which digital information can help supermarket management better-understand what products are most popular and what are consistently undersold, as well as which processes are the best candidates for streamlining. They would then be able to better manage some of the more challenging yet vital areas of the business, such as the fresh foods and perishable sections, which typically comprise up to 50 percent of sales and more than 60 percent of profits.

In addition to leveraging technology to improve operational efficiency, Elvins also stresses the importance of using data to better-understand customer preferences, and to drive the customer experience (CX).

“Stores must differentiate from online by taking advantage of consumer senses, drawing consumers into the store, and using experiences to convert the sale,” he writes.

In-store events like wine tastings, and providing local product representatives and vendors throughout the store to offer expert opinions, are often popular offerings that aren’t possible online, thus creating greater brand-and-store loyalty as well as a competitive edge over online retailers.

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…

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!

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!”

Grocery Stewardship Certification – Saving More than Just Money!

The Grocery Stewardship Certification Program (GSC) helps grocers enhance their operational sustainability with a proven methodology that provides for consistency and accountability. The key objectives are to review store-level practices and equipment with an eye to increasing energy efficiency, boosting revenue and lowering costs.

According to a recent post on LinkedIn’s Grocery Executive Network,  two retail chains – Hannaford Supermarkets and Weis Markets – have enrolled all of their stores in the program.

“Weis Markets has used the Grocery Stewardship Certification program to engage with our employees in new ways and as a tool to show our customers that we are always looking to adopt new sustainable practices,” said Patti Olenick, sustainability director for Weis Markets.

“Hannaford has found tremendous benefit from our work with the Grocery Stewardship Certification program,” said George Parmenter, Manager of Sustainability, Hannaford Supermarkets. “Using the workbooks for the second time, we’ve found a number of areas where our staff and procedures have significantly improved. Through assessing our work, the GSC has helped us to quantify our sustainability efforts as saving us more than $23 million per year.”

The article goes on to state that while there are a number of programs that focus on high performance buildings, the GSC program is the only certification program to expand into employee practices and procedures to engage all stores within a chain.

Customer-Driven Decision-Making on the Rise in Supermarkets

Businesses of every type strive to satisfy their customers, and certainly the supermarket business is not different. One key component to this decision-making should be the “voice of the customer,” and this trend seems to be on the rise based on a recent SupermarketNews article.

The piece focuses on fresh foods, which for some time have been surging at retail. But what’s interesting is the perspective shared by Editor-in-Chief David Orgel, who writes, “The biggest opportunities lie in understanding key trends and avoiding a one-size-fits-all mentality.”

The article goes on to report that retailers are being urged to diversify their decisions based on the needs of different customer-base segments and trends. Three of the trends that are being driven by consumer demand are:

  1. Transparency
  2. Convenience
  3. The digitally connected consumer

Another good example of learning from customers in an effort to better serve them!

Top 2016 Supermarket Trends

Interactions, provider of retail service and experiential marketing for retailers and brands, made the following predictions in a recent ProgressiveGrocer.com article:

1. Improved Transparency and Distribution: There will be “less bad, more good,” meaning more products will be introduced with less sugar, less salt,  fewer words you can’t pronounce, and so on.

2. Closing the Digital Divide: The digital shift in retail will continue, leaving brick-and-mortar retailers needing to find better ways to compete effectively in the digital space.

3. Retailers Take More Control of Shelves: Decisions about which items to carry and where to place items on shelves will be more driven by analytics than by brand bias.

Read the full article…