GIC 2018: consumer confidence, omni-channel trends and merchandising magic

The food retailing industry gathered in Toronto last week to listen to experts discuss the challenges and opportunities facing Canada’s grocery business during the conference portion of Grocery Innovations Canada—a two-day exhibition organized by the Canadian Federation of Independent Grocers.

 

Here’s some of what we learned:

Perception is more important than reality

Despite the markings of a healthy economy—declining unemployment rates and an increase in minimum wage, to list a couple of indicators—consumer confidence is wavering. It's not that Canadians are feeling a financial pinch, said Ken Wong, distinguished professor of marketing at Smith School of Business at Queen's University; it's that they haven't kicked the shopping habits they adopted during the 2008-2009 recession. And, from Costco to Amazon and private-label brands, consumers are constantly told lower prices are available and they go hunting for them, he explained. But, when you're cutting price you aren't adequately communicating the value of that product, he noted.

In Canada, it is estimated that 75% of all purchases are based on price, and pursuing these price buyers can be a dangerous practice, said Wong. For instance, if a retailer cuts prices by 1%, profit falls more than 10%; and if it cuts prices by 10% profit falls more than 100%, and so on.

Wong isn't suggesting retailers remove price-cutting from their strategy. He's asking retailers to recognize that not all shoppers are the same and to price accordingly. Wong identified three types of shoppers: The economic consumer (they need lower prices because they don't spend what they can't afford), the value-driven consumer (someone who looks for the best price-to-quality ratio and is willing to spend more if the they perceive the value to be there) and the frugal chic consumer (someone who derives value from the hunt of a good deal).

The importance of being “all-line”

“Technology is the single-most influential driver of food decisions today,” said Natalie Green, head of industry for food, beverages and restaurants at Google Canada, during her keynote speech titled “Winning the customer journey in an omni-channel world.” As Green explained, “You need to find ways to engage with people around food moments, regardless of who they are or where they live.” She stressed three main themes that she hoped would help grocers begin to think about things a little differently: being “all-line,” leveraging your data, and grounding yourself in what makes you great.

Being “all-line,” she explained, is about having no boundaries in terms of sales channels—with today’s consumer being more dedicated to speed and convenience than brand loyalty, it’s important that grocers be present and visible at every step along the way, online and in store. “More than half of grocery store sales are influenced by a digital touchpoint,” she said. “Before customers go to the store, they’re looking for recipes, price comparing or assembling lists; and once in store, they’re checking off their lists, searching for coupons, seeking discounts and nutritional details—all using their mobile phone.” Grocers need to view the customer as the channel, and take every opportunity to get closer to them, offer choices, learn, listen and adjust strategies where necessary. “Wherever your customer is on their purchasing journey, whatever they’re looking for, your goal should be to be there ‘all-line’ in those moments.”

Merchandising magic

Pete Luckett, founder and former owner of Halifax’s Pete’s Frootique, presented a lively and informative session called “Merchandising magic!” He focused on the produce department specifically, offering helpful tips on how to make your produce department stand out and ultimately sell more produce. Your merchandising strategy “has got to be exciting, you’ve got to feel the buzz, it’s got to be personal—add a little personal element and interaction with your customers as they’re shopping the store,” urged Luckett.

Sampling is key, according to Luckett—and not just at an organized sampling station. “I always empowered my employees to sample at will any time,” he said. “I’m a great believer that what you give away today comes back tenfold tomorrow, so I’ve never been shy about sampling on the floor.” Strategic sampling stations are great, he said, but you can’t beat the excitement of offering the customer a chance to sample on the spur of the moment—for example, cutting open a papaya for them to try as they’re deciding what to buy. “That is a piece of magic that the customer will remember,” he said. “So not only have you planted a seed that they might buy a papaya, but you’ve made a little special moment for the customer.”