Winning retail strategies in the new world
The competitive climate has changed dramatically for retailers
selling produce in just the last ten years. The most dramatic
change has been the rapid proliferation of supercenters like
Walmart, Target, and Meijer. This rollout is largely complete as
they have saturated most trade areas. Although these stores attract
consumers for other reasons, they end up converting a significant
number to produce shoppers.
Less dramatic changes are also making an impact, such as
farmers' markets, which have grown five-fold in the last decade,
community supported agriculture (CSA) programs with subscription
(box-a-week) services, and even 'agritainment' farms. Drug stores
are starting to offer convenience-focused fresh produce items and
dollar stores have exploded with value offerings. And finally, we
are seeing the next legitimization of the home delivery model with
the likes of Peapod, Fresh Direct, and now AmazonFresh deploying
more aggressive growth strategies.
The common impact among these new competitors is that they are
each eating into the produce share of the traditional supermarket.
Some are now offering a high-touch, authentic experience like
farmers' markets and CSAs, while others offer convenience or value
like home delivery, drug stores, and dollar stores. Regardless,
retailers have to embrace new methods to win.
We have all heard the stories about Generation Y or millennials:
they don't want to work hard, they're not loyal, they spend all day
on their mobile devices socializing and playing games. I seem to
recall some of these claims were made about my generation years
ago. Yes, we did not have mobile devices and social marketing, but
we did have other ways we demonstrated a perceived lack of
Within the millennial population, there are a refreshing number
of high-quality employee prospects. Many care deeply about doing
well in work and society, and are far more global in their thinking
than I was at their age. They want to be successful in their
career, albeit with a better balance between work and life, and to
work for companies with which they align philosophically. I often
find millennials are quicker to embrace the concept of
sustainability than older workers, though the latter is more
engaged in the dollars and cents of sustainability.
From my view, blending the two groups makes the most sense.
Sustainability can be both profitable and impactful; retailers with
committed sustainability programs are also likely to attract a
higher quality millennial prospect. In your consumer marketing
efforts, you will be more effective in attracting younger consumers
when you employ millennials and demonstrate your commitment. Think
Trader Joe's-the chain's employees are smart, educated, and hip-and
as consumers, we buy into what they stand for as much as the
products they sell.
Sustainability is a tougher subject to define and get one's mind
around. It's important to have an ongoing and committed program
that delivers on the three legs of the stool: people, planet, and
profit. Sustainability can and should be profitable, it is not an
add-on expense like traceability or food safety. Each initiative
should be put through a return on investment calculation. Many
projects, such as those focused on reducing usage of natural
resources, can be valuable economically while improving the planet
and creating goodwill among employees and customers.
It is also important to have an employee base that accurately
reflects your shoppers. Who knows what millennials are thinking
better than millennial employees? The same can be said for your
foodies, older customers, and shoppers with health conditions.
Listen to what your employees are saying, they can be a very
Winning in the new retail world is about making good financial
decisions, hiring better people, and pinpointing your marketing to
the groups who shop at your stores. Embracing sustainability and
millennials are two wonderful strategies to compete and succeed in
the new world.
Originally published in Blueprints Apr/May/Jun