Grocery shoppers stick to their more strategic ways

Trend Observation:  A story from Supermarket News indicates that consumers are making fewer trips to the grocery store, and more diligently looking for bargains.  The article cites a study by Acosta, and suggests that this more prudent approach is in response to food inflation; consumers are paying about 11% more for groceries, largely due to increasing food prices, according to the story.  Click here to see it.

Marketing Implications:  Consumers are more nimble about changing their habits in response to changing conditions.  Is your company just as nimble about responding to a changing consumer?  How has their purchase experience changed in your particular business category?  What are their current purchasing priorities when they’re considering your product or service?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

More ethnic products offered at the supermarket

Trend Observation:  An article from today’s Supermarket News indicates that more grocery store meat cases are filled with products that reflect a consumer base with greater ethnic and cultural diversity.  Click here to see the full story.

Marketing Implications:  Does your target customer look the same as they did ten or twenty years ago?  Does it claim the same national origin as it may have back in the 90s… or even earlier this decade?  The composition of the U.S. population is changing.  If that is also true in the community or neighborhood you serve, what are you doing to facilitate new tastes?  (That’s not just a question about groceries.)

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

He’s bringing home the bacon… and other groceries

Trend Observation:  A story from today’s Marketing Daily suggests that men are doing more of the supermarket sharing in many consumer households… at least from his point of view.  But in a significant number of households, she acknowledges that he is helping more at the grocery store.  Click here to see the story.

Marketing Implications:  This is a great example of why we recommend that you revisit issues like your target audience, what kinds of benefits they seek and purchase priorities they have; these things evolve over time.

Does your consumer look the same as she (or he) did a few years ago?  Are they buying based on the same purchase priorities?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

What were once fringe formats are now mainstream in grocery

Trend Observation:   Once upon a time, bigger was better… and all the market had to do to succeed was become a super-market.  But it would appear that a tipping point has been reached, in which smaller, “growth format” stores are taking more of the grocery budget share that used to belong to the gigantic grocers that offered “one stop shopping.”  That is one suggestion in a story from this recent edition of Supermarket News (click to link).

Marketing Implications:  One might argue that one-stop-shopping is still the clear winner, and that some share erosion has come in response to companies like Walmart and Target getting into the grocery business.  But growth formats are coming on strong, by this account.  Maybe, rather than use the term “growth format,” which is a popular industry moniker, we should call these stores what they are:  Stores with a theme or focus (i.e., Trader Joe’s, Whole Foods, etc.)

What about your category?  Is bigger better?  Do you serve a niche that could grow to become a core for your business?  Innovation often (almost always) comes from the fringe...

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Is your marketing upwardly mobile?

Observation:   Over the past few days, there has been a flurry of writing about marketing in the mobile space (yes, even more than usual for this popular topic).  For example, today’s Research Brief cites MAG research that up to fifty percent of car buyers will use their smartphone in the research or shopping process (click to link).

In the supermarket category, today’s Facts, Figures and the Future newsletter from Phil Lempert sources NPD Research in saying that 25 million Americans have downloaded some form of coupon-providing apps to their mobile device (click to link).

Implications:  Okay, it’s easy to get excited, but hold on just a minute here.  Before you rush out to spend big money on an “app” for your company, product or service, remember what happened with social media.  Everyone said, “You’ve gotta be on Facebook or you’ll miss the boat.”  So lots of companies created a FB page for no apparent reason, and started inviting their “fans” to “like” them.

Why should I?

As you read both of these two stories (which I selected quite at random), note that the mobile device tactic is designed to satisfy a consumer need… and move the relationship further up the ladder toward a sale or continued loyalty.  Like any other advertising or marketing endeavor, your mobile tactics should support your overall marketing strategy.  So…

In what ways might you enhance your relationship with consumers, as you transcend face-to-face, and move into the mobile space?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

More people think of dining-out as a luxury

Observation:  An article from Progressive Grocer suggests that more people are cooking at home to save money, based on research from The Harris Poll.  Click here to see the story.

Implications:  I’ve read trade stories, recently, that folks are more likely to stop at their favorite restaurant, and that the average expenditure per visit is beginning to grow again.  And yet, more people indicate they’re still playing it conservative with regard to restaurant spending.  Are these assertions in conflict?  Or is it is possible for both to be true, as consumers continue to reconcile their finances with the current economic reality?

Whether you’re a restaurateur, convenience store owner or supermarket operator… the competition for food dollars seems to remain strong.  (That Progressive Grocer often publishes stories about the out-of-home dining sector is evidence of that fact.)  Each food channel must fight to regain the customers they may have lost during the recession, as well as retain those that were gained as consumers traded-down.  How does your messaging persuade consumers that your restaurant or store satisfies their needs best?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

A small number of consumers can be a big factor in product launches

Observation:  Today’s Research Brief offers fascinating insight into the power a select few consumers can have in propelling big sales for new product launches.  Click here to see that story.

Implications:  At CSS, we frequently pontificate about the importance of identifying your true target consumer—the heavy user of the product or service you sell—and super-serving that constituency.

This article seems to support that body of thought, and add urgency to the idea of identifying your heavy user very early in the lifecycle of a product or service.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Mass transit sees an upswing

Observation:  According to a story in today’s USA Today, more people are taking more trips via mass transit.  The surge is seen as a response to high gas prices (although gasoline prices are a few cents lower than last year at this time).  Click here to see the story.

Implications:  It is interesting to note that for today’s Millennial generation, life does not revolve around automobile ownership the way that it did in the 60s and 70s.

Do you sell a product that can be delivered?  I can think of a lot of things that people cannot take home on a light rail or bus ride.  Simple delivery could be a very important value-added service if this trend grows.

Do you sell cars or light trucks?  It might be time to remind people of the flexibility and convenience that can come with vehicle ownership.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Food price inflation begins to moderate

Observation:  A recent newsletter from Phil Lempert cites a Food Institute report that food inflation has begun to moderate slightly, and that this trend should continue as we move through most of 2012.  Click here to read the story.

Implications:   This is the second story I’ve written today about the prospect of stabilizing or falling prices (the other was about Used Vehicles). 

The past couple of years had seen steadily rising prices at the gas pump, grocery store, and car lot; the consumer had learned to expect prices that seemed higher with every visit.  Because price increases have slowed or stopped in a couple of these key categories, is it possible that the consumer will feel like they’re paying less than they expected?  And could this create a “windfall” or “dividend” mentality that causes the consumer to splurge on an extra restaurant visit, a night-on-the-town, a little nicer vacation, or some other indulgence? 

Are you ready to invite them to enjoy your product or service as a smart place to spend some of those recently freed-up dollars?   

I’ve been warning of price inflation for a couple of years now, related to an inevitable rise in fossil fuel.  (Anything that is made with or shipped by using gasoline or diesel is going to become more expensive as the cost of that energy rises.)  But nobody is happier than me to see that—at least for now—my fears are unfounded.  That having been said, the logic of inflation has only been deferred; it has not been deleted.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Men hit the grocery store in greater numbers

Observation:  A story out of the Northwest indicates that men are taking over a greater share of the household food shopping.  According to the report, men now represent about 31% of supermarket visitors; in 1985, that number was 14%.  Click here to see the NWCN.com.

Implications:   The story suggests that this shift in gender balance at the grocery store is due to “the erosion of the traditional family.”  While the composition of the American family is much different than it used to be, I’m not sure I’d refer to it as “erosion,” but simply, “changing.”  Further, changes in simple economics and the employment landscape are a contributor; with more women in the workforce than there were in 1985, it should not shock us that evidence is finally beginning to accumulate that men are taking over (or at least contributing more) in other areas of the household operation.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Today, 60% of food shopping is intended to satisfy an immediate need

Observation:  According to a report from the International Dairy, Deli and Bakery Association, the majority of trips will involve purchasing food for instant consumption or an immediate need.  Further, consumers are spending more on food and gasoline because of rising prices in both categories, and placing more emphasis on health as something that contributes to the value proposition.  A summary of the findings were published in an article from Convenience Store Decisions, and you can click here to read it.

Implications:   Time Sensitivity remains an important—and increasing—driver of consumer behavior today.  Grocery stores that waste consumer’s time risk being displaced by companies that offer quicker meal solutions, faster checkout alternatives, or entirely different channels… such as convenience stores, restaurants or home delivery meal options.

But certainly, this need for speed isn’t confined to food consumption.  Is your company, product or service subject to the rule of Time Sensitivity law?  Is there anything you can do to accelerate your offering?  Or—and this is a very real possibility—is your category immune to the issue, satisfying customers who are so time-stressed that they’re eager to slow down, relax, and have a nice candle-light dinner?  Could you have different customers who expect different things… or the same customers who want speed on a weekday but leisure on the weekend?

Staying in-touch with consumers has never been more important, as the benefits they seek within the products they buy continue to evolve.  [By the way, for more stories on the issue of Time Sensitivity, click here.]

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Grocery business likely to be staffed by Boomers

Observation:  We’ve offered a variety of posts at this site that point to how Baby Boomers are likely to redefine retirement, just as they have reshaped virtually other life stage they’ve lived through.  Yesterday’s newsletter from Phil Lempert chimed-in on the topic by suggesting that Boomers will not only continue to be great customers at grocery, they could be an important part of operations behind the checkout and in customer service.  Click here to see his post.

Implications:   As Boomers do everything they can to stretch their nest egg, expect to see them take modified roles in the labor market for years to come. 

[Note: To see one of our earlier stories about Baby Boomer “Rehirement,” click here (it was offered in September, 2009.  For more on Generational Economics, click here.]

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Free sample: The power of product trial in an age of wary consumers

Observation:   In the wake of economic turmoil, many consumers remain more careful about the way they spend money.  So what’s a new product to do, at a time when consumers are not in the mood to “roll the dice” on a product or service they aren’t familiar with?  Some ideas are offered in this story from NRF Store (click to link).

Implications:   While focused on the grocery and packaged goods industry, the tactic of free samples might be a wise thing to consider for almost any product or service.  When a consumer can experience your brand first-hand, a first purchase is less of an experiment and more of a sure thing, which is important at a time when folks are still seeking known value for each dollar spent.

The freebie need not be lavish or extreme... just enough that the consumer can feel confident about committing dollars to your product or service offering.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Gulf seafood regains “comfort food” status

Observation:   Gulf of Mexico seafood producers were among the hardest hit by the effects of the BP oil spill of 2010.  But a story from Supermarket News suggests that many consumers are once again comfortable with eating goods from the waters of the Gulf coast.  Click here to see the story.

Implications:   If you run a restaurant or a grocery store, this story might lead you to add more Gulf products to your menu… or if you’ve already done that, it might lead you to bring more attention to those offerings.

If you run any other kind of business, it should serve as a reminder that trust lost is not easily regained; the BP oil spill happened almost two years ago, and there has been little bad news on that front since the well was successfully capped.  It has taken all of that time—with little or no bad news coming from the Gulf—before some categories could finally show a comeback.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Restaurant-quality food, but not from a restaurant

Observation:   A story from Supermarket News this week illustrates just how far grocery stores have crossed the line and moved into restaurant territory with their ready-to-eat offerings.  Click here to see the story.

Implications:   Kowalski’s supermarket—featured in this story—is a great example of how to think beyond the competitors in your category… and considering other categories you can compete with. 

(On a personal note, it’s fun to see this company doing so well, as they used to be one of my favorite clients when I worked with a media company here in the Twin Cities prior to joining CSS.)

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

What retail has in store for the future

Observation:   Earlier this morning, Research Brief published a story summarizing a recent whitepaper from Nielsen, which focuses on emerging trends and likely adjustments that will impact retail over the next four years.  Click here to see the story.

Implications:   A number of these trends are worth thinking about...  including the polarization of store sizes between small “grab-and-go” locations to one-stop convenience of mega stores, as well as the increasing pursuit of experiences that will guide select consumer decisions.

In the years ahead, what you do will not distinguish you from the competition; it is how you do it and how you add value to the consumer’s life—how you do it—that matters.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

The dumb bell economy hits the food aisle

Observation:   This morning’s newsletter from Phil Lempert explains that food retailers have their own version of the “haves” and “have-nots” landscape.  He divides consumer sentiment into the two groups of pessimistic and optimistic.  The latter group is feeling better about the economy, more likely to try new products and experiences, and indulge a little more freely.  Pessimists might be more likely to change retail channels frequently (going from grocery stores to club, discount and dollar stores), clipping coupons more religiously, and taking extreme measures to maintain a frugal lifestyle.  Click here to see the story.

Implications:   I’ve written pretty extensively about the Dumb Bell Economy, and you can review those past stories by clicking here.  This Phil Lempert piece does a good job of reminding us that—just as was the case with the recession—the economic recovery is a very personal thing, and might look drastically different from one household to the next.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

Snack attacks represent opportunity for restaurants

Observation:   Today’s Marketing Daily includes a story about the rise in snacking frequency, and the role that restaurants can (and could) play in that mini-meal category.  Click here to see the story.

Implications:   It seems that things like the dollar menu at fast food restaurants or the pastry display at your nearest coffee shop are serving to facilitate more frequent eating occasions of smaller servings.  This report indicates that snacking occasions have increased; I’m going to keep my eyes open for a report that illustrates whether formal dining occasions have declined.   

Meals used to be an appointment, happening at breakfast time, lunch time, and dinner time… and you better not be late!  These days, though, it seems like many folks have become less meal-time focused, and more likely to graze throughout the day.  (I wonder if this might be a by-product of time poverty.)

If you own or operate a restaurant, the fear here could be that your average ticket revenue might fall.  But in a glass-half-full perspective, realize that this might be a chance to get more people in the door to sample your restaurant, and become comfortable with the idea of returning later for their major meals.

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

The logic of food (and other) inflation

Observation:   This week, an article from Food, Nutrition and Science magazine explains the USDA forecast for higher food prices in the coming years.   (I found the story through a newsletter from Phil Lempert.)   Click here to see the full story.

Implications:   Greater demand from emerging economies will impact the world’s food supply, as will the use of corn and other crops for the production of bio-fuels.  You and I will compete (at the supermarket checkout) in the complex global auction that food commodities have become.

When (not if) food prices go up, then we’ll be spending more at the grocery store and restaurants.  When (not if) gas prices go up, we’ll be spending more on everything else.  Chances are good that you’ll have to raise prices in your own business—regardless of the goods or services you sell—within the next few years.  Have you begun having that conversation with your customers?  By that, I mean:  Are you doing a good job of reminding your most important clients how you deliver value to their lives?

And just as important, in a world whose real income is likely to be either constrained or contracted in the coming years (when adjusted for inflation), are you positioning yourself to compete for tighter discretionary dollars?

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.

UPDATE: Convenience stores are in the restaurant business, too

Moments after posting the story immediately below, I found this piece from Convenience Stores News about the expanding footprint that the ready-to-eat section has in the typical c-store.  Click here to see the story.  (To understand why that's important read my earlier post on the topic, found immediately below.)

Mike Anderson, for the Elm Street Economics consumer trends blog. A service of The Center for Sales Strategy, Inc.