Everyone knows that in real estate, the key to value is location, location, location. In shopping in the future, particularly in supermarkets, experts say the key is going to be convenience, convenience, convenience -- and the stores of tomorrow are going to reflect that philosophy.
Much of the population does not really like to shop for groceries, so the store of the future that can make the experience as convenient and rewarding as possible is the one that will win the customers' hearts and loyalty, according to store owners and managers and food industry consultants.
"Store owners are going to want to help consumers meet their personal nutritional needs and at the same time make life simpler for them," said Stephanie Childs, spokeswoman for the Grocery Manufacturers of America, Washington. "Manufacturers are going to be allowed to put more healthful claims on their packaging if it is based on good science, and now that those claims are allowed, there are new incentives to develop more types of nutritional foods.
"In some instances, entire stores are going to be renovated to create special sections for organic products and natural foods," Childs told SN. "There will be more variety of products to make shopping more convenient, more efficient and more pleasant."
Charles Jones, senior buyer for Scolari's Food and Drug Co. in Nevada and California, agreed that making shopping easy is going to be the key to success in the future.
"People know there are a lot better things for them than fast food, but it has to be easy. That is why ready-made meals have done so well, either casserole-style meals-in-a-box, or store sections where you can buy everything you need for a meal," Jones said. "As supermarkets evolve, they are going to put more pressure on manufacturers to produce those types of products. More and more, it is going to be convenience that counts."
In conjunction with that philosophy, frozen foods are one of the faster-growing areas in Center Store.
"People's desire for healthy eating may be hurting the Center Store somewhat," Jones said. "They want variations of a store-within-a-store concept -- almost a convenience store within a supermarket, at the same time they want fresh products, but frozens is still doing well."
Many of the supermarkets owned and operated by Fresh Brands, Sheboygan, Wis., are using the increase in demand for organic and natural foods to try to renew interest in the Center Store aisles.
"We will try to add life to the Center Store by putting natural and organic products there to keep it viable and exciting," said Michael Houser, vice chairman and chief marketing officer. Fresh Brands owns, operates or supplies 103 Piggly Wiggly Supermarkets and Dick's Supermarkets.
"For instance, in some stores we now have an 8-foot department of natural cereals in the cereal aisle. The challenge for the future is to add interest to the Center Store and this helps," he said. In addition, the store's own label of ready-to-prepare meals, known as Dining In, has been popular. The meals take five minutes or less to prepare.
The most innovative feature about Fresh Brands stores, however, is the entire configuration of some of the newer stores, which are round, a design that was developed by their in-house architects based on European models.
"We started this two years ago and we continue to build more stores on this design. It is sort of like a department store layout. Shoppers find it more friendly and more interesting. Surveys show shoppers spend 20 minutes extra per shopping trip in the store and that is significant," Houser said. "This is going to be the design of the future.
"We also have a lot of skylights. It is frequently dark and cold in Wisconsin, so we bring in lots of natural light."
Other supermarkets are individualizing their stores based on the neighborhoods where they are located in order to build customer loyalty. Joe Falvey, president of the Northern California division of Unified Western Grocers, oversees 250 stores, including some in Hispanic and Asian neighborhoods, a number in upscale communities, and others in middle-class suburbs.
"It is going to be hard to define a conventional grocery store in the future," Falvey said. "We used to have tiny sections of Hispanic foods in a store. Now we have 8- or 16-foot sections in a category. Ethnic diversity is where stores are heading and that applies specifically in the Center Store," he said.
Diversifying by neighborhood is the future for independent store operators, and chain stores are beginning to adopt the same philosophy, he noted.
"Let the big-box stores do what they are good at," Falvey said. "We will do what we are good at."
Everything reverts back to making the shopping experience convenient by providing the specialized items the consumer wants in the easiest way possible, noted Paul Crnkovich, a partner at Cannondale Associates, a leading marketing and management consulting firm in Evanston, Ill., and Wilton, Conn.
"The whole fresh part of the store is going to continue to grow and expand," Crnkovich said. "Sales are going to evolve around having more creative products. In some cases, this is going to involve changing the fixturing of the store to put the refrigerated pasta sauces with the pasta so that you have solution centers throughout the store.
"The shopper thinks in terms of what is put on the plate, not about departments within a store," he said. "That means we are going to have to bridge some of those department walls. As the perimeter of the store expands, the center is going to have to be used more wisely. That will mean fewer brands within a category, not fewer categories. The Center Store is not dead, although the perimeter will be the linchpin. If the items are displayed more interestingly in the aisle, you will not need endcap displays to grab attention."
Much of the individualization of stores will be done based on information gathered through frequent shopper cards, said John Carlson, a partner at Cannondale. So far, much of the data has not been used effectively, but it can be used to determine such things as whether more sizes rather than more flavors are needed for a pasta sauce, or any number of other detailed decisions that have to be made each day in the industry, he said. Huffman's Market in Columbus, Ohio, is an independent supermarket that makes every effort to provide something of value to its customers without trying to compete against the big-box stores or the large chains.
"Everyone today looks for reasons to go somewhere else to shop. We give them a reason to come in here. Employees greet everyone when they come in the store and ask if they need assistance," Tim Huffman, an owner, said. "If we don't have something someone wants, we will try to get it. We are only 7,000 square feet but we have a large wine selection. We buy wines with no labels and print special labels for people."
Throughout the store, only a couple of brands of any product are stocked, and they are high-end brands.
"We have a lot of doctors and professors as well as a lot of middle-class customers and they are willing to pay a little more for extra quality," Huffman said. "We have fewer SKUs and more categories, each with a nice brand and a high-end brand. I am not going to carry all of the pasta brands that you can buy in any store."
Forest Hills Foods, Grand Rapids, Mich., is another store that caters to its individual customers, sometimes using information gathered in frequent shopper cards.
"At Christmas, we send poinsettias to our top 100 customers and on birthdays we offer people a coupon for a birthday cake. It is nothing complicated, but it makes a difference," said Jeff VandenBerge, president.
VandenBerge warns others against lumping all customers into one group.
"People shop for a lot of different reasons. It is not one thing that brings people into a store. The challenge is always going to be to try to do everything well."
The store may venture into self-checkout in the near future, he added.
Self-checkout is an innovation that may be seen in numerous stores in the near future, said Jim Coleman, a partner at Accenture, a leading management consulting and technology services company based in Chicago. Other more futuristic possibilities include "intelligent shelves" that can give advice on products that go together once a customer picks up an item or that can automatically keep inventory and reorder stock, Coleman said.
In the more immediate future, Coleman noted, stores may start stocking the same item in several places. Although it increases labor costs, it can make shopping more convenient for the customer.
"In Europe you are seeing massive, self-service kiosks within stores that are like huge vending machines for convenience items," he noted. "Stores are also going to have to differentiate themselves, so that a suburban store is not going to look the same as the store that is in an urban area just a few miles away."
But all stores will have to cater to a population that does not have the time, interest or skills to cook an elaborate meal, said Tom Jackson, president of the Columbus-based Ohio Grocers Association, which represents more than 800 supermarkets.
"Maybe we need to have displays of how to prepare a meal for a family in 10 minutes and under $10," Jackson said. "We need more shelf-stable meals.
"The hard part is telling the difference between a fad and a trend," he added. "But supermarket owners have to determine what they can do to differentiate themselves. For instance, if they are in a neighborhood with a lot of senior citizens, are they sure it is easy to get around the store? Is there someone to help the customer who has just parked in the handicapped place outside?"
Ross Nixon, vice president of merchandising at Dahl's Food Markets, Des Moines, Iowa, agreed the store of the future will address a customer's entire lifestyle.
"Loyalty is going to be based on more than price; it is going to depend on convenience and service. Maybe we need solutions areas with recipes that can be prepared in 10 to 15 minutes at a reasonable price," he noted, echoing Jackson's prediction. "Most young people today do not have the knowledge of cooking.
"However, you have to balance that with the fact that they are more health conscious than the previous generation so you have to balance what is quick and easy with what is fresh."
It will all take a bit of creative thinking.
"It is counter-intuitive for a person who has always thought in terms of categories to shift from thinking of product management to thinking of consumer management," said Coleman of Accenture, "but that is what needs to be done."
"Some of us have been in the business so long it is difficult to think out of the box and we have gotten in a rut," noted Jackson, "but the only difference between a rut and a grave is the depth. Successful stores of the future will think in terms of fun and excitement and how to create an ambience to pique the customer's interest."
