By Al McClain
At this week’s National
Grocers Association (NGA) convention in Las Vegas, RetailWire.com moderated
a discussion on the "Top 21 things grocery retailers can do to entice
shoppers in an economic downturn."
Panel members presented their ideas and audience members voted on them. Panelists
included BrainTrust members Liz Crawford and Ron Margulis, along with
"Supermarket Guru" Phil Lempert, who was a gracious last minute sub for Ryan
Mathews.
While the audience was
composed primarily of execs from small to mid-sized grocers,
many of the ideas were appropriate for a variety of types of retailers.
The top five ideas, as voted by the audience, were:
- Maintain your quality standards: never lower quality just to achieve
a better price. This one can be seen as surprising on two levels; the expectation
that retailers would go for some of the more futuristic ideas as a means
to differentiate themselves, and because we know that many are sorely tempted
to lower quality to cut costs in this economy. - Offer the best market price on
a key market basket: establish the standard market of food basics. That
this idea ranked so high points out how tough the economy really is, and
how important smaller grocers believe it is to compete with Wal-Mart. - Improve shopper marketing: encourage
shoppers to visit every aisle with signage, sampling, and incentives. This
idea was a bit of a surprise as a high ranker as well, as it indicates
a "back to basics" approach in engaging the customer in-store. - Use shopper feedback to increase
loyalty: use improved communications to enter a more meaningful dialogue
with customers. From Twitter to mobile technology to the old-fashioned
idea of walking around and talking to customers, the panel and audience
believe engaging in a constant dialogue with shoppers is important. - Initiate a school outreach program: teach children how to budget
and shop, skills that could be passed along to parents.
Other ideas that didn’t
make the top five but were intriguing included: hosting community events
in your parking lot to drive traffic; establishing a party registry similar
to a bridal registry; enabling employees to hand out "surprise" discounts
and coupons in-store; and running cross promotions with local groups.
While other retailers
may be more interested in online marketing, social media, mobile technology,
etc. it seems that local grocers are more inclined to engage with their
communities, improve in-store service, and keep their quality and prices
right.
Discussion questions:
Which of the above ideas do you like the most for supermarket operators
and why? Which ideas are most applicable to other retail channels?
BrainTrust
Discussion Questions
Poll
Loading …
Quality is good but price is better. Right now price is the overarching message in this marketplace–like it or not. You can do all the marketing you like and analyze consumer data until your eyeballs fall out, but if you don’t have the right market price you’re roadkill.
I like the first 4 ideas. They represent a back-to-basics approach: dialogue with consumers, understand their wants and needs and then offer those products at competitive prices in a customer-friendly environment. On paper this seems like a no-brainer, and yet so few grocery retailers actually provide an experience like this.
All retailers could benefit from returning to the basics. They never go out of style.
Offering the best quality at the best price is always a good idea in any economic environment when considering the tremendous amount of retail available to customers today. Competing with Walmart and the other “Big Boys” always requires mid-tier and small retailers to differentiate themselves on factors other than price. In the current environment, mid-tier and small grocers need to do more to positively reinforce their customer’s decision to shop at their stores. The best way to do that is with personal connections.
Grocery stores are lucky in that they can connect with all five of their customer’s senses during any store visit. Great smells from samples cooking, colorful decor, “good” music, and clean and neat displays are cues that make their customers feel better and more upbeat. Couple this with friendly, helpful and knowledgeable associates and the customer buys more and is happy about where and what they purchased.
It’s tough out there, but we still have to eat. Grocers get the chance to connect and build loyalty, in most cases, on a weekly basis. Adding a little fun and diversion to an otherwise weekly drudgery will build a customer base that’s loyal and will give most a better chance of survival in the long run.
I think most of the mentioned ideas are good ideas. The key is actually implementing the ideas. They look good on paper but unless there is some actual execution, all those ideas just end up being lip service on paper. Too many grocers are trying to cut expenses as a way of showing a profit.
Many of these ideas require time and capital. When you are a grocery company totally consumed with short-term stock price rather than longer-term viability, all these good ideas tend to remain on paper.
If I must pick one it would be Maintain Quality but I would like to word it differently…or maybe it is slightly different.
“Be for the customer and your employees and not against the competition and the market place.”
I love the list and would challenge all of my employees to pick the top 10 and set a goal of focusing on one of them a month for the next 10 months.
Some of the most intriguing points of the list have to do with community-building: identifying opportunities for shoppers to connect with one another and with employees in order for the retailer to engage them, create affinity, and build loyalty. We have recommended related ideas to our clients and believe that developing this active sense of community can be a key differentiator for retailers.
I’d have to say the audience got it right with their top choice, maintaining quality. Respect for your consumers includes maintaining your quality offering.
It scares me to see quality retail brands in the marketplace adopting discount mania as a means to drive sales in the short term. The long-term damage to their brand will be significant.
I have often wondered why retailers don’t do more to engage with customers. With the efficiencies of communications technologies today, it’s easier than ever to get far more personal. For example, why not invite your best customers to be on an advisory board? Have them meet virtually in a web forum. Do it by store–have them come to a catered lunch to tell all about their likes and dislikes about the store or the shopping experience.
But no matter what, if you ask, you better either do something about what they tell you, or at least explain why you can’t or won’t. Because engaging with customers isn’t about just getting them to tell you what they want–it’s about giving it to them.
Looking at this issue from a truly technical perspective, I would recommend that the NGA and its members improve their Internet presence. A great approach would be to work with the local Chambers of Commerce to establish a community presence on the Internet that represents all the local business. Prominent in this “Internet Village” would be the local grocers. The Village would include all the local businesses and tie into local events associated with the schools, churches, and other community groups or clubs.
With the Village in place, the local grocers can begin to compete against online retailers to get back some of the high gross categories that are being lost to online sales. The “buy online with in-store pickup” model would work very well for grocers who have a distribution channel in place and are frequently visited by consumers. Consumers could pick up their purchases during their grocery shopping and might even make extra trips to get items they have ordered.
Consumer promotions that link purchases to charity and school events would encourage shoppers to support their local merchants.
When times get tough and bucks are few
Quality is sought but low prices will do.
(And for this info you need a convention?)
While going through the self-service line and realizing I didn’t have my Kroger card, I got a wonderful smile from a Kroger employee who promptly swiped her card for me and saved me $2.
While the Kroger program is a rant for another time (see yesterday’s discussion on shopper loyalty data), the smile of the employee and her proactive response to me not having my card made me feel great about shopping there.
While there are countless things that grocers can do to build share and maintain their business during tough times, happily serving customers will provide the best value/cost leverage and can be done today.
Over the holidays, one of my clients stationed an ‘entertaining expert’ by the turkey section and they saw increases across the board with little extra payroll spent. Something like that could work year round. Have the ‘foodie’ in at peak traffic times and station them throughout key margin areas in the store.
The value proposition is more about perception than reality, as shoppers are quite unaware of what they are paying for most of their groceries. Hence, prominently featuring a very competitive market-basket is a good strategy. Also note that just as with produce setting the tone of fresh and attractive, early in the shopping trip, the price perception needs to be managed early in the shopping trip.
On the negative side here, encouraging shoppers to go up and down every aisle is a time wasting, sales killing exercise–not for the few who will actually do it, but for all those whom the store is largely unsuited to. Shoppers are shouting every day what they want by what they do, never mind what they say. Half of all trips result in 5 or fewer purchases, and only a few hundred SKUs contribute half the sales in the store. Moreover, typically 80% of the shoppers shop only 20% of the store–and its mostly the same 20%, over and over again. So just go ahead and try to create more stock-up trips. Someone else will take care of YOUR customers. :>)
Not surprised to see that I’m probably the only one so far who likes the school outreach suggestion. Outreach is the operative word and a way to get far more shoppers if you can capture whole families and encourage new ideas along with enthusiasm. Anyone for a bit of networking?
Great convention, great seminar. The best ideas are usually from this presentation.
We must continue to offer great deals around our perimeter, along with signature foods. Great service means a lot of things but until you personally connect with a customer, than you are just another place for them to shop. Go out on the floor and talk to people about what you do better than someone else and follow through on a customer’s request for a new product or cooking idea. Take care of your community, and hopefully they will take care of you.
Good job in Vegas!