Consumers and supermarkets are settling into new shopping experiences now that we are three months into the coronavirus pandemic. Most importantly, both groups are putting an emphasis on consumer and food safety. In addition, there are new procedures that will carry over to the post COVID-19 world that will affect product presentation, product offerings and the way groceries are purchased.
New Consumer Behavior and the In-Store Shopping Experience
Noticeable changes to consumer behavior and food safety protocols are beginning to play a key role in the ways we shop and how items are displayed and sold. For instance, shopper involvement in picking products from salad, soup or olive bars, as well as buying bulk bin items, has pretty much disappeared and probably will not come back in the foreseeable future. We are starting to see more freshly premade salads; in addition, bulk items and olives are now being bagged. Soup can even be proportioned in individual cups and kept warm via heated display stations.
Recently, I went to my local Sprouts to buy bulk raisins and found them in various-sized bags. A friend went to buy olives and found bagged packages on the olive bar. We both actually thought this was easier than digging into bins. Plus, we could see the various sizes we were buying rather than eyeballing the size we wanted.
Another area that has shown changes at some stores is the deli section, where commonly purchased meats and cheeses are now being prepackaged. That way, there is less interaction between the deli clerk and the consumer. Rather than consumers ordering sandwiches at the deli, there will probably be more sandwiches premade and packaged.
Self-checkout will become more prevalent, replacing staffed checkout lanes. This is logical as it too reduces shopper-clerk interaction. However, store staff will need to have a proactive plan in place to clean the self-checkout areas safely and efficiently between consumer uses.
One trend that has had wide-reaching ramifications is the increase of home delivery and store/curbside pickup. Various surveys show between 31%–34% of consumers said it was very or extremely likely they will do more online shopping, either for delivery or store pickup. This correlates with a question from another survey in which 68% of shoppers said it is extremely or very likely that their current grocery shopping habits would return to normal.
Regarding promotions and advertising, many retailers have not been sending out rotos or having promotions. They are working off the theory that consumers know the products they want to purchase and will buy at full list prices. This could change at any time on a chain-by-chain basis.
Another interesting phenomenon that has popped up is that consumers have tried new products and brands since the beginning of the stay-at-home orders. With many best-selling brands sold out in various categories, stores needed to replace them and did so with specialty brands. Since distributors and retailers are looking to fill shelves and avoid disappointing consumers, this unexpected positive provides a good opportunity for smaller brands to gain shelf space.
With regard to restaurants, the return to eating outside the home will probably take a long time to recover. Many people don’t feel safe returning to restaurants, plus more people will continue to work from home and, thus, eat more meals at home. This bodes well for sales of grocery products.
Prepare for the New Model of Shopping
What are the best things that food manufacturers, especially small to mid-sized companies, can do to capture the attention of distributors, retailers and consumers? There are several steps that can be employed:
- Develop a plan as to how you will manage your existing business. Talk to your broker, distributors and retailers to see what your current and target accounts are looking for regarding pricing and product support. Be ready to adapt your product plan to each distributor and retailer.
- Create a plan to gain new business at retail. Again, what do the distributor and retailer expect from you for your brand to achieve new distributions? Go in with a variety of ideas such as deeper discounts, “2 (or 3) for 1” promotions, smaller initial orders, unique terms, etc. Be sure to understand what deductions will be taken and build this into your final offerings.
- Investigate new retail accounts you are currently not selling that present a new channel. Dollar stores and convenience stores are expanding their food offerings. Can you design new your product(s) or sizes to fit these niches?
- Expand your online presence. First, do you have a user-friendly website that shows your products attractively and focuses on product attributes? Conduct a SEO project and make the necessary copy changes to your website so when people look for products in your category, your items are not buried on Google page 74! Then develop your social media plan including Instagram or Facebook.
- Look at your online sales structure. What sites sell your products? Can you expand to additional sites? Again, how easy is it to order off YOUR site?
- Being on the pulse of today’s ever-changing market conditions is imperative. Manufacturers must continuously be aware of each retailer’s product reviews and changes to promotional programs. This is where your brokers can prove their value as it’s their job to monitor retail market changes, requirements and needs and alert you with any recommended action.
A good broker is in ongoing contact with distributors and retailers, plus can quickly react to product and category review opportunities. In addition, they can save you time in preparing the paperwork necessary for your product presentations. Stay in touch with your brokers on a regular basis and work with them to take advantage of any way to gain new distributions or increase sales.
Be flexible and ready to change any idea or plan you have at a moment’s notice. We saw how quickly grocery shopping had to be adapted under new conditions when COVID-19 hit. Consumers and retailers now realize that they may need to change behaviors at any point.
To discuss overstock or problem products you want to sell or quickly move some inventory to generate dollars, contact Dick Lansing at The Lansing Group: