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DESIGNS ON NONFOOD

Supermarkets are finally giving nonfood the showcase it needs, according to retailers and industry design sources.Using a variety of approaches to re-envision how nonfood merchandise is presented to customers, retailers are becoming more sophisticated in how they incorporate these higher-margin categories into store designs. They are innovating with architectural features to set apart targeted general

Supermarkets are finally giving nonfood the showcase it needs, according to retailers and industry design sources.

Using a variety of approaches to re-envision how nonfood merchandise is presented to customers, retailers are becoming more sophisticated in how they incorporate these higher-margin categories into store designs. They are innovating with architectural features to set apart targeted general merchandise and health and beauty care aisles, using solution selling to cross merchandise items into scenarios that suggest purchases, and adopting store-within-a-store co-branding with other retailers.

The optimism over new supermarket formats, such as H-E-B Plus, Kroger Marketplace and smaller-scale efforts, hinges on a willingness to move beyond the idea embraced in the past that the supermarket must be "all things to all people," sources said. Retailers should be designing stores and departments to showcase products specifically to invite purchases, the sources added.

For example, Stop & Shop, Quincy, Mass., has used multiple approaches to move ahead with nonfood merchandise. A part of that effort has been to incorporate targeted nonfood sections and partnerships with outside retailers to create in-store shops.

Stop & Shop has created its own distinct sections, such as its Bestsellers! departments that pull together music, video, games, comic books, and related products at the front of the store in a one-stop shop for entertainment needs. Offerings are focused, as the name suggests, on only the best-selling titles.

Bestsellers! sections are clearly set apart from the rest of the store using signage, special fixtures, lighting and a different merchandising presentation.

In home office supplies, Ahold USA, Braintree, Mass., will roll out branded Staples sections to all 550 Stop & Shop and Giant-Landover stores this year. Giving other national retailers a small presence in supermarkets not only gives them branding support and instant credibility, but also brings in a true category expert who can target nonfood product sets even more, said Nancy Shalek, president, Shalek Advisers, Purchase, N.Y. Shalek contributed to the development process of the Bestsellers! effort.

Giant Eagle, Pittsburgh, has created dedicated sections for some of its nonfood offerings as well, such as its Chef's Shelf housewares sections, Iggle video stores, and Card Party in-store gift shops. The Card Party section features greeting cards, gift wrap, party goods, home decor items, a complete candle line, collectibles, gifts, plush, photo frames, albums and a teddy bear stuffing program, said Brian Frey, spokesman for the chain.

"The key is to make the displays engaging, appealing and clear for customers," he said. "To fully communicate our nonfoods product and service offerings to customers, we look to perform cross promotions, and create engaging and appealing cross-merchandising displays when appropriate."

Those efforts may include promoting themed videos and gifts, greeting cards, floral arrangements and wrapping paper around a specific holiday, for example.

The most prominent indications of a new industry respect for nonfood categories come in the form of Kroger Marketplaces and H-E-B Plus stores, which redesigned not only the floor space allotted to GM, but also their approach. These chains operate combination stores that seek to compete with supercenter offerings in certain nonfood categories, and represent a dramatic departure from the large GM combo stores that have been tried in the past, such as Big Bear Plus, Smitty's and Acme Click. Competing with supercenters has to move beyond just adding GM and trying to match prices, sources said. Effective use of nonfood categories calls for a more sophisticated execution.

"Sometimes, it is innovation outside of the prototypical that drives the new ideas," said Tim Morrison, retail supermarkets principal, Little Diversified Architectural Consulting, Charlotte, N.C.

The Kroger Marketplace concept -- now in place in Fry's, Smith's and the Kroger Great Lakes division -- incorporates expanded GM in selected categories, drawing on the expertise of the Fred Meyer division of the company. Marketplace stores, which tend to be 100,000 square feet or larger, carry home linens for the bath and bedroom, appliances, electrics and furniture, plus gourmet kitchen and related merchandise. They also operate expanded services, including pharmacies.

One difference in the Marketplace stores is the flexibility the format allows for cross merchandising. Related nonfood and food items co-exist on endcaps. Books and magazines, together with reading glasses, are merchandised around tables and chairs on area rugs near a Starbucks kiosk, for example. The design effectively incorporates nonfood items into the total store concept, something large combo stores of the past did not always do, and mass merchant supercenters rarely attempt, observers noted.

"From my vantage point as brand strategist and designer for Fry's [Marketplace format], it really is about creating a believable realm that reinforces credibility," said Kevin Kelley, principal and co-founder, Shook-Kelley, Los Angeles. Shook-Kelley helped Kroger develop Fry's Marketplace in Arizona. Consumers won't get so caught up in price if they believe a store has authority, he said.

H. E. Butt Grocery, San Antonio, is taking a similar approach with its Plus stores. It opened 109,000-square-foot H-E-B Plus stores last year in San Juan and Waco, Texas, with plans for more in Austin, Houston and San Antonio, media reports said. The test stores featured expanded product and service offerings, including extensive music and video sections; a larger baby department; dedicated space for grills and outdoor supplies; an expanded card and party product section; lawn and garden equipment; electronic and household items; and designated space for "treasure hunt" merchandise.

H-E-B's original Plus test store devoted 30,000 of its 109,000 square feet to GM and HBC categories. The format developed out of feedback from customers, according to a company spokeswoman at the time of its opening.

Focusing on how the consumer would like to shop is a good starting point for retailers. This could involve product sets organized around a theme, sources said.

"Looking at consumer behavior and focusing on a specific type of customer allows you to focus the merchandise," said Tom Henken, vice president, director of design, Architecture Plus International, Tampa, Fla. "The history of grocery has been 'all things to all people' for the better part of its existence. Now that the competition has gotten to the level that it has, grocers have the opportunity -- and the necessity -- to define more distinctly who their target or core customer is, and approach the merchandising of their store specific to that customer."

API was involved in the design of the Bloom concept that Food Lion, Salisbury, N.C., operates. In the case of Bloom, the focus wasn't on product but on shopping patterns. Customers targeted by Bloom are time-starved, and are typically part of a two-career family where jobs, kids and extracurricular activities are a part of daily life, Henken said.

"In Bloom, we didn't even think about layout. We talked about the customer and how they would want to shop."

Consumer-centric thinking led to the creation of the Bloom concept, which focuses on ease of shopping by separating food from nonfood. Consumers enter Bloom stores through the food, fresh goods and convenience foods departments. Shoppers don't see nonfood products until they are two-thirds of the way through the store. The gondolas with nonfood items are perpendicular to the other aisles to clearly mark the change in focus, Henken said.

As customers exit the area where they've done their food shopping, they are offered individual aisles of key categories like HBC, picnic supplies, and pet food and office supplies that are a convenience for the customer, but aren't part of a daily shopping pattern, Henken said. The layout allows the store's target consumers to organize a trip around what they need and when they need it. In spite of initial concerns that sales in the nonfood categories might drop, Henken said the stores have done very well.

"Our goal is to provide a consistent value to customers shopping for nonfood products. We provide the everyday items customers need on a regular interval," said Jeff Lowrance, spokesman, Food Lion.

Grocery stores should own the market for products used in the home and tied to daily patterns of living, cleaning and eating because of the very nature of their core offerings, said Kelley.

Smaller chains like Larry's Markets, Kirkland, Wash., and Lund Food Holdings, Edina, Minn., have recognized the potential for a well-designed housewares department that makes use of cross merchandising and solution selling. Both retailers operate kitchen stores within their traditional footprint.

"To lift up the value of a product, you have to take it above a commodity and put it into vignettes [for] suggestive selling. Physically, you have to change the area," Kelley said.

Kelley said his focus has been to create distinct zones in stores where nonfood categories are merchandised in a different way and not as leftover space. Using solution selling and product zones suggests purchases to consumers that they weren't expecting to make.

"You have to be careful about just asking consumers what they want. They don't know what they want until you give them something. Consumers never said they wanted a Wegmans or a Whole Foods, [but] somebody showed us we wanted it," Kelley said. "You don't go to the grocery store to buy a grill. You end up buying a grill because it's a great idea."

Other retailers have also started rethinking their approach to merchandising. Meijer, Grand Rapids, Mich., opened a new prototype store in White Lake, Mich., last month that features new adjacencies for nonfood products. Kitchen supplies and small appliances are located near the grocery aisle and jewelry, greeting cards and floral were moved into a one-stop convenience area at the front of the store.

TAGS: Kroger