Engaging the new shopper
Who is today’s shopper? It’s a simple question with a very difficult and complex answer. The fact is that shoppers are difficult to pigeonhole these days. They have access to more information than ever before, and their expectations are changing constantly.
Ever-changing consumer needs make it harder for retailers to keep pace and are forcing merchants to do everything in their power to understand who they are dealing with. This means developing strategies to figure out ways to not only get them to return to their stores, but keep walking out with purchased merchandise.
Some say that retailers just need to embrace the new culture and cater to their customers’ needs. For example, one of the biggest changes. Bill Bishop is noticing among retailers is a shift toward consumer advocacy. Bishop, the chief architect and co-founder of the Barrington, Ill.-based food industry advisory website Brick Meets Click, points to the new advertising campaign launched by Longo’s, the Canadian supermarket chain based in Toronto.
In an attempt to attract younger shoppers, the campaign stresses Longo’s family standards and emphasizes the grocer’s desire to offer millennials food they would not hesitate to serve to their own family members. The campaign’s objective is to show that Longo’s wants to meet consumers’ high standards and promote trust in its brand.
To illustrate his point, Bishop tells how a bakery might offer a well-behaved child a free chocolate-chip cookie. The cookie is a reward for the child, and it shows the store notices and advocates for good behavior.
“People will go out of their way, in my experience, to work with a retailer who they think understands them,” Bishop said. “That is not a normal tactic for bringing people into the store. It has nothing to do with price or item or promotion.”
This marks a shift and highlights the new role of shoppers-as-advocate, as Daymon emphasized in its global retail study, “From Shopper to Advocate: The Power of Participation,” released in June. Among the insights on the new consumer that the Stamford, Conn.-based retail strategist’s report offers is the fact that a large group of consumers now are interested in co-creation — having their ideas and feedback incorporated into the business strategy of a retailer they frequent. Keeping apprised of what shoppers want from their stores, the report says, is the key to innovation.
“The whole advocacy idea, I think, is rooted in a cultural shift that’s taking place where there’s increasing distrust of institutions, whether it’s the big medical establishment or government or big business,’’ Daymon’s director of thought leadership Carl Jorgensen said. “People feel that they really need to take matters into their own hands, whether it’s their personal health or whether it’s a change they want to see happen at their retailer, so you get this advocacy or activist mentality.”
The Daymon study points out that the new shopper expects “greater engagement with and personalization from retailers and brands.” It notes that segmenting shoppers by such traditional demographics as age, gender and nationality, is no longer enough, and that they must focus on shopper values, attitudes and lifestyles must be emphasized. To attract the new shopper retailers should make the store into a destination; stretch the concept of “fresh” to include prepared meals and local products; use technology to communicate and inform; and somehow, the study said, streamline and simplify the shopping experience.
“We’re fond of saying here that the pace of change has accelerated,” Jorgensen said. “As the consumer changes in ways that were unimaginable a few years ago, retailers and brands need to adapt with equal speed. Standing pat is no longer an option.”
Nicole Peranick, Daymon’s senior director of thought leadership, added that digital empowerment is not the only factor driving shoppers’ higher expectations. The pervasiveness of health-and-wellness trends, as well as more information about what constitutes a good diet, are also influencing consumers. The result is that shoppers look for new and better over-the-counter health and beauty products, as well as different foods and beverages to try.
“When you add to it just the overall economic uncertainty and skepticism, it’s really important for retailers and brands to take a stronger position on topics and be a catalyst for change to make a more positive impact on shoppers and their in-store experiences,” Peranick said, adding that although the economic indicators are positive, people are spending strategically and have new perceptions of value.
John Stanton, a professor of food marketing at Philadelphia’s Saint Joseph’s University, said supermarkets must focus on the shopping experience because it is something online competitors can’t duplicate. In his study, “The Changing Retail Environ and the Impact On Produce Marketing,” Stanton noted the increase of in-store restaurants. Kroger, for example, is opening comfort food restaurants in or near its stores, and West Des Moines, Iowa-based Hy-Vee is revamping its Hy-Vee Market Grille restaurants to cater to on-the-go consumers while offering a full-service bar for those who want to stick around. Hy-Vee also is set to soon open the first of 26 Wahlburger restaurants.
Stanton also pointed out that one Philadelphia supermarket he recently visited offers a series of upscale fast-food type restaurants to customers as they enter the store. “If you look at some of the successful companies like Costco, there are tons of sampling places,” he said. “It’s just kind of fun to go there and try this and try that. You know what else? You never know what’s going to be there on sale. They might have coats one week. They might have Mandarin oranges the next week. It’s like a treasure hunt when you go there.”
In its study, Daymon mentions several examples of in-store innovations that enhance the shopping experience.
- CVS Pharmacy has “discovery zones” inside its stores that take a holistic healthcare approach, product assortment and education addressing health, sleep/mood and immunity problems;
- Peranick pointed out that Walgreens’ New York City banner Duane Reade offers a sushi bar, a juice bar, hair salon, nail salon and complimentary beauty services at its Wall Street flagship store;
- Hy-Vee has a program that enables various customer groups to use store kitchen equipment to prepare a recipe together, and then divide up the meals they’ve made and take them home;
- Lowes Foods, based in North Carolina, invites shoppers to its community table to try locally produced food products and attend cooking classes offered by local chefs; and
- With a nod to customer advocacy, Peranick cited the Dutch grocer Marqt, which has a bulletin board on which customers can post comments and have store employees respond for all shoppers to see.
Private brands are another way retailers can separate themselves from the competition. As David Rogers, president of DSR Marketing Systems in Northbrook, Ill., pointed out, private-brand penetration in Europe is more than 50% — a much higher percentage than it has in the United States.
“With private brand, they make a better margin to support their costs, and they’re supporting themselves rather than some other firm,” Rogers said of European retailers. “I’ve always found it a little bit nuts that these (U.S.) retailers want to carry these big brands because they should be promoting their own name wherever possible with a product that’s just as good.”
Dave Harvey, Daymon’s vice president of thought leadership, stresses that private brands are not limited to products. They can be store services, as well. As an example, he said a grocer could offer a fruit and vegetable cutting service to customers who shop in the produce section.
“Carrefour in Italy was branding their own section, which hooked up shoppers with local electricians and plumbers and other types of trustworthy services they could utilize in their community,” Harvey said. “It’s a way to connect the shopper to the community through an exchange service provided by the retailer, which is private brand.”
Another way Harvey sees retailers trying to promote interaction is through innovation centers, which allow consumers to provide product-development feedback. He said shoppers are increasingly interested now in taking a hands-on approach. “We’re starting to see more interactive merchandising displays or ways they can customize — whether it’s picking a customized assortment of products or the way they’re able to pick their own promotions,” Harvey said. “They can form a collection of items and pick which ones they want their discounts on by using their loyalty cards.”
Digital technology has revolutionized the shopping experience, and savvy retailers can take advantage. One such innovation is Apple’s iBeacon, which allows users to receive promotions for items near where they are in the store. Bishop noted that the iBeacon isn’t as pinpoint precise as it needs to be, but that progress is being made with proximity marketing. As the iBeacon is perfected, Bishop noted that in-store screens can be used to influence shoppers.
“There’s a little company called Channel 3 that, instead of using the beacons and the phones, actually has 20 screens scattered throughout the store,” Bishop said. “You can stop by in any particular aisle and see promotions. What you do is key in the last four digits of your phone number, and then you get a personalized set of promotions.”
Kroger is working on digital shelf-edge technology that, through interaction with a Kroger app, can highlight products and offer shoppers personal prices. The high-pixel display allows prices to be changed with the flip of a switch, which is a labor savings.
“I believe when we talk about integrating digital communications, ideally the integration should be operational to the point where it saves money,” Bishop said.
Consumer advocacy, unique product offerings, in-store restaurants, services and clinics, shopper interaction, targeted promotions and digital shopping enhancements are all tools the retailer can use to attract customers.
But one element not in the mix — and one that’s traditionally preferred by most retailers — is lowering prices.
“Take a look at the really successful chains — they generally are the more expensive chains,” Stanton said. “There is an obsession with low price in supermarkets.”
In Stanton’s opinion, by stressing low prices — but not going low enough to match the prices at discounters like Aldi, Lidl or Walmart — most supermarkets give away margin.
“The everyday low price offer of Aldi and Lidl — that is the cutting edge,” Rogers said. “Everyone has Amazon fright, but I think much more serious for the grocery industry is Aldi and Lidl. Drug stores need to keep an eye on what Aldi and Lidl are carrying because they’re not just carrying food — they’re carrying cosmetics and a lot of general merchandise.”
Rogers added that Aldi and Lidl are involved in a discount war, and that the two are lowering their prices as their battle ground shifts from Europe to the United States. That price war, in turn, pressures Walmart into lowering its prices and starts the dominos tumbling across the industry.
By being less price conscious, finding other ways to attract customers, and separating themselves from the competition, retailers can stay above the fray.
LifeStyles introduces gender-inclusive condom conversation
According to a recent study conducted by Iselin, N.J.-based LifeStyles, 63% of people believe it is not acceptable for women to be as sexually active as men. However, women represent 50% of the condom market. So why do condom companies only focus on speaking to men while objectifying and leaving women out of the conversation?
Enter LifeStyles, a global leader in the sexual wellness sector who recently launched “Equal Play,” a campaign aimed at rethinking the way condom companies include women in the conversation of sexual health. For the video series, LifeStyles partnered with clinical sexologist, Rena McDaniel, to serve as the moderator for a frank discussion about the sexual health of all women, regardless of race, gender identity or sexual orientation.
“Instead of omitting women from the condom conversation and ignoring women who take control of their sexual lives and health, our industry should be seeking out ways to elevate women, listen to women and encourage women to be empowered and in control of their sexuality and sexual health,” stated Carol Carrozza, vice president of marketing, North America for LifeStyles. “Our hope at LifeStyles is that by launching campaigns such as ‘Equal Play,’ we start a conversation and support each and every woman in doing just that.”
Starting in December, LifeStyles will release the “Equal Play” video discussions covering a range of topics, from women’s frustrations with condom marketing, to flaws in our country’s sex-education programs, to debunking myths about women and sex.
“Our various pleasure lines may be designed to please men or women in a particular way, but our mission and messaging is equal across the board – that being smart is being sexy,” added Jeyan Heper, CEO of LifeStyles. “Equal Play and the conversations to follow show that it’s time do away with the stigmas and taboos that are still fed to consumers, even by sexual wellness companies themselves.
In just 12 hours, LifeStyles hosted Rena McDaniel and a panel of six diverse women to create the series, which sheds light on some of the most pressing topics in sexual health – from the judgment women face when purchasing condoms, to expressing sexuality and being addressed as equals.
Rite Aid Foundation gives assist to SoCal wildfire victims
The Rite Aid Foundation announced Wednesday a $100,000 donation to the American Red Cross to help the victims, families and communities in Southern California affected by the wildfires.
"Our thoughts and prayers go out to everyone affected by the wildfires, which are being counted among the worst in California's history," stated Kermit Crawford, Rite Aid president and COO and president of The Rite Aid Foundation. "The Rite Aid Foundation is proud to partner with the American Red Cross to help the people and communities in Southern California in their time of need and it's our hope this donation will aid them as they start to rebuild and recover."
"As the Red Cross helps those affected by disasters like the California wildfires, we are extremely grateful for The Rite Aid Foundation's support, which allows us to shelter, feed and provide comfort to people who have been impacted by a disaster," said Don Herring, chief development officer at the American Red Cross.
Since its inception in 2001, The Rite Aid Foundation has awarded more than $34 million to non-profit organizations. Additionally, Rite Aid, through the efforts of its customers, supplier partners and associates, has also raised more than $81 million for Children's Miracle Network Hospitals across the country since 1994.