Progressive Grocer

DEC 2015

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40 | Progressive Grocer | Ahead of What's Next | December 2015 Grocery Center Store Strategies consumer demand for fresh food, and the continu- ing pressure on time, which increases the need for convenient and ready-to-eat solutions, Pam Basciani, group director for large-store channel planning and development at the Coca-Cola Co., in Atlanta, goes on to say that "shopper habits difer by lifecycle. Millennials want things fresh and fast. Boomers, on the other hand, want things fresh, in portions to meet their household needs, and they value the convenience of not preparing meals from scratch. Gen X shoppers, who are often building a family, are on a budget and need to engage center store to meet their household needs." Tat being the case, she posits, "Te challenge is to increase the engagement of center store; to educate shoppers on the oferings available in center store to meet their needs of fresh, convenient solu- tions; and to ofer new items and experiences to keep them coming back." Supplying Solutions Given these challenges, supermarkets should reimagine the center store as a destination designed to meet consumers' most pressing needs. To ensure the department's continued growth, Nielsen's report recommends that retailers reach out to increasingly diverse shoppers in new locations with appropriate products, reassess promotional strategies, and identify potential opportunities and partnerships that could help drive sales. Meanwhile, Boston-based L.E.K. Consulting, in a recent white paper, "Grocers: How the Center Store Can Recapture Center Stage," advises supermarket operators, pummeled by rising competition from mass marketers and e-commerce sites, to follow the example of a successful non-grocery player, which was able to survive — and thrive — by reinventing itself. "More innovative grocers are following ap- proaches similar to Best Buy's," write L.E.K. Managing Partners Chris Randall and Alan Lewis. "For example, Wegmans has explored concept evolutions, such as converting some of its center stores into upscale nonfood departments. Another obvi- ous success story has been how Whole Foods Market gradually expanded its foodservice and fresh product ofering to take over more of its stores." Add Randall and Lewis: "Rec- ognizing that your consumers are on a journey is essential to winning in grocery retail today. Te modern consumer, with ever-increasing options to execute purchases across categories from the comfort of their living room, bedroom or bus seat, needs a real rea- son to step into a real store. To address changing consumer preferences, grocery stores need to be on that journey, too. Te store itself must be a destination, and the experience of being in the store has to provide value in and of itself." Accordingly, the authors recommend that gro- cers rethink their layouts; merchandise and market solutions, not products; eliminate wasteful inventory investment; and provide valued services. "Some stores will integrate [the] fresh perimeter into the aisles, with refrigerated and fresh produce interspersed to suggest meal solutions," notes Hart- man's Feit, ofering additional ways to innovate. "Some stores will fnd ways to use digital technol- ogy to integrate more layers of customized informa- tion into the shopping experience, and there seems to be more possibility in center store than elsewhere for some of these innovations. And fnally, some stores will showcase new food attributes and make center store a place for their shoppers to discover new experiences among emerging premium items and distinctions. Today, this approach is mostly confned to up-market, fresh-focused banners, but tomorrow it may become the new norm and large chains fnd ways to do this well at scale." "Te conventional supermarket center store is what we might describe as efciently dull," asserts Kantar's Rand. "If we want to get a better experience, we have to open it up to being a better visual environment, to be a better merchandising platform again. Te comparison between center store and the dramatically superior presentation on the perimeter is quite stark." Not all mainstream center stores are so dull, however. "I have noticed how Kroger is able to use space in their large Marketplace stores far more efectively and dramatically, tying items from difer- ent parts of the store together, such as appropriate GM cross-merchandising," he points out. "I have seen and admired the increasing number of stores Some stores will showcase new food attributes and make center store a place for their shoppers to discover new experiences among emerging premium items and distinctions. Today, this approach is mostly confined to up-market, fresh-focused banners, but tomorrow it may become the new norm and large chains find ways to do this well at scale." —David Feit, The Hartman Group

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