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Some might argue making center store more exciting is a lot like putting lipstick on a pig, but that analogy might not be too far off.
One study unveiled at the Food Marketing Institute’s Midwinter Executive Conference this past weekend suggests that creating a destination for health and beauty care, along with general merchandise, could tap underdeveloped opportunities for growth in the supermarket channel.
A panel including retailers and CPG suppliers discussed the findings of a joint FMI/Acosta Sales and Marketing study that reveal key opportunities for grocers, including vitamins, hair care, oral hygiene, cough and cold, tableware and cooking supplies.
Rather than ceding HBC and GM profits to the mass and club channels, grocers should tap the power of beauty care, whose growth is outpacing the total store, and GM, which has some of the highest margins in the store.
“No competitor has a greater opportunity to take care of these shoppers than grocery – we already have the food,” said Chris Skyers, VP of corporate merchandising for Wakefern Food Corp., who suggested employing “beauty ambassadors” to “truly listen to your customers.”
Lisa Paley, chief customer officer for Pfizer Consumer Healthcare, said grocers need to communicate the category better to consumers, who believe they can find better values in other channels. “You have the easiest hurdle because you already have them in your store,” she said.
Jane Novak-Cook, VP of North American grocery sales for Procter and Gamble, said beauty destinations are a great opportunity to best ecommerce in the category by creating a rich sensory experience because online retail “only appeals to one sense – sight.”
The study recommends five actionable steps: getting on shoppers’ lists, getting the products in their path, getting in their baskets, giving them a reason to come back and making it easy.
Skyers said retailers “have to have a go-to-market strategy that reflects your community, not just a margin play.”
Two other presenters challenged attendees’ notion of fresh by noting a shift among consumers driven largely by social media.
The “alt.food” movement – defining what’s good or healthy food by perception and opinion rather than fact or science – is “going to drive fresh,” said Ryan Mathews of Black Monk Consulting, which partnered with A.T. Kearney on a study identifying fresh trends that also include a drive for health and wellness, and in-store design trends.
Mathews and co-presenter Dave Donnan of A.T. Kearney offered global examples of fresh marketing, including open kitchens, center store fresh-prep stations and store layouts inspired by street markets.
It’s crucial, Donnan and Mathews asserted, for retailers to understand the ethical concerns of their customers, incorporate those values into their offerings and communicate this message to customers. Grocers need to be “fresh storytellers,” seeing fresh through their shoppers’ eyes and advocating heathy eating with consistent messages.
“It’s becoming paramount for grocers to take this on as a major mission,” Donnan said.
Big Data Connections
Leveraging shopper insights is key to maintaining reach, relevancy and consistency with consumers.
Tim Lowe, president of southeast regional grocery chain Lowes Foods, recounted how his company teamed up with Oracle on the grocer’s rebranding campaign that aimed to strengthen its ties to the community as a local, inspirational, passionate and provocative partner in people’s lives.
Big Data allowed Lowes to stress its “guest-centricity” and target key consumer segments with specific messages.
Coming up with the right process requires retailers to determine who to talk to and why, and the most relevant channels to use; developing a communication plan; and activating guest-centric segments, all aimed at driving sales with ongoing relevant digital content.
Other Saturday sessions at Midwinter focused on other aspects of Big Data, the digital shelf, and an update on the SmartLabel transparency initiative from FMI and the Grocery Manufacturers Association.
The conference ran Friday through Monday at the Fairmont Princess resort in Scottsdale, Ariz.