More than 4,000 retailers and other industry professionals attended the two-day Grocery Innovations Canada (GIC) conference at Toronto’s Congress Centre this week.
Hosted by the Canadian Federation of Independent Grocers, the conference focused on all the things retailers would use to revitalize the grocery, keeping an eye toward what the customer of the future will ultimately look like.
Here are some key takeaways:
The centre store is beating the perimeter
Yep, you heard that right. Centre store sales in Canada are up 3.4% in dollars in the last year [52 weeks to Aug. 20] according to Nielsen, outpacing perimeter sales (up 3%). Carman Allison, VP of consumer insights at Nielsen told GIC delegates that although the centre store (grocery, frozen and dairy departments) has lost three percentage points in share over the last five years to the perimeter, it’s still the store’s largest area in sales (55.9% share vs. 44.1% share for the perimeter) and is adding more dollars to cash registers every year. Since 2011, centre store sales have risen $3.2 billion. That’s about 1.5% growth a year.
Healthy eating ain’t what it used to be
We all know Canadians are trying to eat better, but drill down on the data and unexpected shifts in shopping behaviours emerge. Case in point: 63% of Canadians try to avoid artificial sweeteners. So what does that mean when people hit the aisles? Allison at Nielsen says shoppers are often eschewing products marked “diet” or “light” in favour of their real-deal counterparts. Sales of diet/light yogurt are down 12% in the last year [52 weeks to Sept. 19] while regular yogurt is up 10%. Diet/light peanut butter is down 1% but regular PB is up 5%. Regular is also beating diet/light in ice cream and flavoured soft drinks. A similar scenario is taking place in milk, where higher fat milks are seeing the most growth. Homogenized milk is up 4% in per litre sales in the last year [52 weeks to June 25] and two per cent milk is up 1%. Meanwhile, skim milk is down 9% and one per cent milk has fallen 2%.
Know what motivates your most valuable customers
It pays to understand those 5% of customers who represent 40% of your business. “If you already know who they are from personal experience, I would urge you to use technology to understand them better,” said keynote speaker Jeff Swearingen, senior VP of PepsiCo North America’s Demand Xcelerator. “If you can satisfy these customers, the millions of people they represent will follow.”
Create an environment that will delight them
Break the monotony and make the environment in your store engaging enough to encourage discovery and facilitate easier decision-making, said Swearingen. Think of what will make your most valuable customer smile within the first five seconds of entering your store—and what will make their shopping experience seamless so they are truly “delighted” when they leave it.
Look beyond food stores for inspiration
It’s worth checking out retailers like Sephora and TJ Maxx who are successfully engaging their customers at checkout. Talk to consumers about what they like about their experiences there and look for nuggets of innovation you can adapt to the grocery environment.
Ditch the departments for solutions
Think about merchandising products that are paired with services. “As store sizes go down (it’s expected that 95% of stores in the future will be under 30,000-square-feet) there will be more allocation of space to fresh, services and fulfillment,” said conference speaker Hannah Donoghue, director of advisory at RetailNet Group. “We expect a much more curated shopping experience based on what your customers need.”
Partnerships are key
Find ways to leverage third-party partnerships to build new opportunities in store. “There is a movement to a much more flexible space that can change as consumers change—collaboration will be critical for this,” said Donoghue. Develop long-term partnerships to help you evolve with technology because this new breed of on-demand consumer will expect real-time solutions.
There’s value in becoming a retailer that’s Instagram-able
Think about ways to leverage social media to figure out who the new influencers are. Tap into these influencers to determine what local products and services you could be adding to your store to drive interest.
Health and wellness trumps all
Today’s consumers are looking beyond food safety to the long-term health implications of what they eat, said speaker Mark Baum, senior VP and chief collaboration officer at the Food Marketing Institute. “Smart” food labels will be the future and consumers will expect full transparency. More retailers will also be looking for ways to collaborate with healthcare professions to meet their customers’ wellness needs.
The primary shopper is constantly evolving
Today’s primary grocery shopper includes different types of people with a variety of motivators, said Baum, noting a significant increase in the number of households where people are eating alone. “Some 83% of U.S. adults say they are primary shoppers, which is more than there are households,” said Baum. “That sounds like an opportunity to me.” Find ways to make their shopping experience seamless so they’re choosing to come back to you each time.