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"I'm all lost in the supermarket, I can no longer shop happily; I came in here for that special offer, guaranteed personality."
This lyric from the classic punk rock song "Lost in the Supermarket," performed by The Clash in 1979 (on the eve of a double-dip recession in the U.S.), was meant to capture youthful alienation, but it also contains a germ of truth about the challenges facing supermarket brands as we roll into 2013.
“Food retailers are arguably at the front-lines of economic stress," Leslie G. Sarasin, president and CEO of the Food Marketing Institute (FMI), recently noted. "And they are best prepared to listen to the changing consumer.”
The food consumer is indeed changing, dramatically. Since the recession in late 2007, 19 million more households have scaled back on carefree shopping, according to an FMI study, and are taking a more cost-conscious approach to consumption. Food shoppers today are not only willing to accept living with less, they are making shopping decisions based primarily on lower prices, discounts, product assortment and convenience, rather than based on their favorite supermarkets.
In fact, most consumers visit multiple stores to get everything they need – shopping one place to save on staples like milk and canned goods, for example, but going elsewhere for fresh produce, meat, and other specialty items. Today, 76 percent of Americans visit at least five “channels” for food – such as supermarkets, drug, and dollar stores, according to an August 2012 report from SymphonyIRI Group. Only 3 percent visit only one or two channels.
So, how do brand name food retailers – those that have invested considerable sweat and treasure in differentiating themselves in the marketplace and building brand equity – overcome these challenges?
At the moment, they are staying the course leveraging tried-and-true tools such as sales promotions, couponing, and ad circulars – and mixing these up with modern methods such as email marketing, giveaways, and fuel reward programs. Unfortunately, these tools do not help marketers align with their core customer base, but instead make them increasingly vulnerable to the fickle behavior of bargain shoppers who will jump to the next brand for a better deal. How does a food retailer on the front lines create long-term brand advocates and brand loyalty, while staring down the realities of true economic hardship? Here are five tipping points:
1) Start at the very beginning: how to capitalize on a differentiating idea
In today’s modern economy of ideas, creativity is the capital that is most often rewarded by customer loyalty. And creativity can come from anywhere and anyone. Start by going back to your roots – What got the company started? What unique belief or trait does the founder have? Then think about how you could create a customer experience around this thought. If, for example, your founder began the supermarket because he or she was a gifted vegetable gardener, consider offering in-store tips, advice, even a class on “getting your kids to love vegetables by growing your own.” It’s these kind of personal, authentic and creative ideas that help you stand apart from the competition, connect your business with consumers, and build stronger loyalty.
2) Looks aren’t everything…or are they?
A consistent brand is your best asset. Grocery retailers are notorious for jumping from deal to deal. However, a strong and consistent look-and-feel can help communicate an attractive, interesting brand that makes customers feel comfortable. A confused, uncoordinated one will communicate just the opposite. Because signage is so important, hiring a professional firm is recommended to create a branding package and standards guide that your internal marketing and merchandising teams can follow.
3) You do the thinking, so they don’t have to
It’s the job of product vendors to design products and deals that will sell, but your job as a retailer is to make sure those offerings resonate with your customers and add value. Don’t let a product vendor dictate deals in your store. Understand your consumer and mold those deals and discounts to fit their needs – for mothers, this typically means “make it easy” (for example, “buy one, get one”). Additionally, provide shoppers with solutions featuring complementary products (for example, an endcap with graham crackers, chocolate, and marshmallows for s’mores). These solutions can help consumers solve problems that are important to them – like health, meal and party planning, environmental responsibility, saving time, etc. By making their lives easier, you will both encourage engagement and motivate purchases.
4) Help your loyal customers feel like VIPs
Grocery is a competitive industry and there are a lot of new players stealing a piece of the consumers’ weekly food budget. Since consumers have so much choice, you have to give them a tangible reason to spend their money with you. This is the very genesis of the wide crop of today’s “loyalty programs” that reward customers for shopping regularly at a specific retailer. A perk or incentive impacts a consumer’s mindset in a very different way than a discount because it’s akin to a gift. And who doesn’t like receiving gifts? Moreover, making these gifts personal – that is, tailoring perks to the individual customer – will produce the greatest impact because they will be relevant, meaningful, and thereby more appreciated. These can go far beyond the traditional incentives to true value-added experiences, such as personal shopping or nutrition consulting.
5) Be there where they need you, when they need you
Focusing on customer service is a must. Not a new idea, but one worth repeating. Customer loyalty absolutely is the result of strong consumer connections – both in-store and online – and your team makes a stronger impression than any advertisement or press release. In fact, the better you do this, the less money you’ll have to spend on those things (a little secret most advertising and public relations people don’t want to admit). Plus, today, budget-conscious consumers are planning meals and shopping trips at home. So, ensure you’re connecting via online and mobile channels before they even head to the store. With the right timing and relevancy, you can get on your customers’ shopping lists. The idea is to become as helpful and top-of-mind as possible. What’s more, if you do it right, they’ll be singing your praises – and word-of-mouth spreads faster than ever before thanks to social media.
The bottom line: although today’s customers are extremely value-driven, just having the lowest prices in town won’t win them over and keep them coming back. You have to find a way to be more meaningful and indispensible in their busy lives. That is, don't let them get lost in the supermarket… make them happy.
Sacramento, Calif.-based Glass Agency serves large and small clients that include Lucky Supermarkets, Save Mart, FoodMaxx, Togo’s Sandwiches, California Office of Traffic Safety, and the NBA’s Sacramento Kings. Glass Agency was awarded Advertising Age’s Small Agency of the Year Gold Award for Best Agency Culture in 2012.