Progressive Grocer

DEC 2016

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December 2016 | | 39 ments to create comprehensive solutions, says Jim Holbrook, CEO of Stamford, Conn.-based branding firm Daymon. "Loblaws in Canada created a President's Choice Insider Collection destination, with products curated by theme: Dine, Brunch, Mingle and Gift," he explains. "Similarly, in its new Market 32 format, Price Chopper is reconstructing center store around meal solutions, moving cooking staples — e.g., oil, spices, pasta — from in-aisle to their own merchan- dising units alongside fresh." Adds Steve Abdo, SVP of marketing firm Cata- pult Integrated Services, in Westport, Conn.: "At Kroger, there was communication in dairy with offers for cereal and milk, coffee and creamer, crackers and dip. In each case, [it's] tying a center store brand to a dairy department brand in a simple, relevant way that incents shoppers to purchase cross-category." Center store is an area where Millennials are more likely to say they would buy items on impulse, Mintel's Owen adds. So when suggesting cross- category purchases, grocers may be able to suggest more center store products than they would items in other departments. Sampling, too, helps here to pick up incremental sales, as Millennials show a desire for trying before buying in this section. And given that meal solutions are all about con- venience, adding other forms of convenience also can help drive sales. Michael Tyson, CMO with Highland, Ind.-based grocer Strack & Van Til, notes that in the new year, his team is adding not just meal solutions, but also click-and-collect and home delivery options. 2 Add click-and-collect or home delivery options: As the months go by, it becomes increasingly hard to picture a world of grocery retail, especially in larger metropolitan areas, where a time-starved consumer doesn't have the option to order groceries via smartphone and have them delivered or available for pickup nearby. In fact, 34 percent of CPG retailers today offer either click-and-collect or home delivery (direct or third- party), according to the 2016 "Trends & Research Report" from Retail Leader, a Progressive Grocer sister publication. And among the 66 percent of retailers not offering such services, more than six in 10 reported, to some degree, the likelihood that they would offer such services within the next two years. While such services provide a number of com- petitive benefits to grocers, one in particular can be a boon to center store: continuous automated re- plenishment, a new type of shopping trip observed by Pat Walsh, VP of supply chain and business development with Arlington, Va.-based Food Mar- keting Institute (FMI). Center store is home to a lot of frequently purchased staples, and being able to simply set up auto-replenishment for anything from coffee and cereal to paper towel and toothpaste not only takes items off shoppers' grocery lists, but also creates loyalty and regular sales for grocers. "I think there's a lot of opportunities to grow the center store in the traditional sense," he explains. "It just may not necessarily mean that all that growth will come in a bricks-and-mortar environment." 3 Draw them into the aisle, then wow them: e entrance to an aisle should offer an enticing taste of what's inside. For instance, Bashas' has been adding upgraded, designer end-cap fixtures that create a boutique look at the entrance of center store aisles, encour- aging customers to enter and further explore what each aisle has to offer, according to Ashley Shick, director of communications and public affairs for the Chandler, Ariz.-based grocer. "We are also actively evaluating the center store shelf tags to ensure that they are making an easier, more informative, interactive and engaging shop- ping experience," she notes. A helpful resource grocers can use here is Smart- Label, a program launched last year that makes it easier to find more information about products, says Jim Flannery, executive SVP, operations and indus- try collaboration with the Grocery Manufacturers Association, in Washington, D.C. Via the scan of a barcode, shoppers can get instant access to hundreds of product attributes. With an increasing number of places to shop, it's more critical than ever for grocers to differentiate and capture shopper attention, especially in center store aisles. Incorporating in-aisle multisensory experi- ences that attract and encourage product interaction extends time in center store and increases basket size. "Outside of food, incorporating emerging tech- nology in nonfood categories, like Whole Foods' Whole Body interactive mirror in their health and beauty section, provides a fun and engaging way to recommend new products to shoppers, based on their 'aura,'" Daymon's Holbrook notes. "I've seen many creative ways to bring engagement into store aisles, and some are so simple, yet effective." Strack & Van Til's Tyson notes the importance of converting "quick trips" into "longer, exciting trips." Center store, by informing and romancing shoppers, can do this. "We need to convert secondary shoppers into primary shoppers," he says. "Knowing the customer directly by store is key to ensuring these opportuni- ties are met." 4 Focus on healthier eating: Whether products are natural or organic, free from allergens or loaded with super- foods, consumers are flocking to items with health-and-wellness benefits faster than ever. I think there's a lot of opportunities to grow the center store in the traditional sense. It just may not necessarily mean that all that growth will come in a bricks- and-mortar environment." —Pat Walsh, FMI

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