There's no way around it: The business of retailing is the business of being sensitive to shoppers.
markets from those that fail.
And, at many food retailers, it's the consumer-affairs specialist who is on the front line of figuring out what shoppers want and playing the role of shopper advocate.
SN asked its panel of consumer-affairs specialists to review findings of the SN Shoppers Poll and comment on what its findings seemed to imply.
"The survey revealed that consumers are generally fairly cautious about innovation, but that they are amenable to trying new products or services if they conclude it will help make their lives easier," said Paul Bernish of Bernish & Co., Cincinnati.
"I am surprised at the number of seniors that do shop on-line and have [orders] delivered," remarked Joan Taylor, director of consumer affairs at Schnuck Markets, St. Louis.
But, cautioned Carol Scroggins, The Consumer Voice, Oklahoma City, "As we do more on-line shopping [privacy] will become an even bigger issue."
As for the total shopping experience of the future, Shari Steinbach, meal-solutions and consumer-affairs manager at Spartan Stores, Grand Rapids, Mich., said the key will be "excitement and education. If people can be shown how to eat healthier and the convenience factor, we will have a winner."
Here is a summary of the panel's reactions to the SN Shoppers Poll:
SN: What were your first impressions of the SN Shoppers Poll?
TAYLOR: What surprised me was the low interest in home delivery and on-line home shopping.
STEINBACH: The conclusions in the study seem very reasonable. Our shoppers said lower prices and faster checkout are the two top reasons they would switch stores if they were thinking of another store. But our stores have other issues. Along with a convenient location, any way we can deal with them quicker is seen as a positive. On some of the other findings, Internet shopping was still somewhat low. Locally, we found that there is minimal interest in Internet shopping, it was too new and only about 20% of our shoppers were interested in it. About 80% really were not interested at this time.
SN: What attitude seems to support that?
BERNISH: The survey revealed that consumers are generally fairly cautious about innovation, but that they are amenable to trying new products or services if they conclude it will help make their lives easier. For example, people expressed the view that they were not especially interested in using in-store banks if they had no prior exposure to this service. Once they had been exposed, they found in-store banking to be very useful.
That tells me two things. One, that the marketing of these kinds of programs clearly has a positive impact in terms of broadening the array of services that retailers can offer customers. It also tells me that to be really effective, programs and services need to be fully explained. I have the sense, not so much based on the survey but just my own observation, that customers want to have a lot of information before they make the choice whether to try something. In some instances, it is probably not as clear as it should be to customers as to why they should want to do something, why they should want to try a different approach. The benefits to the consumer need to be fully explained.
TAYLOR: We have been hearing so much lately that there is a higher level of interest in on-line shopping. But I do notice in the survey the number of people who had access to the Internet within this survey was also relatively low. Even before getting our supermarket Web site up and running, we received many calls and requests for these services.
So, that seems to be a need in our communities and not one that can be met easily, from a logistics and a cost standpoint. I am surprised at the number of seniors that do shop on-line and have it delivered. It is good to see. So while you might think that the senior citizens interested in home delivery are not necessarily computer savvy, I find that is not true. I find that a lot of our senior citizens are the biggest users of our Web site.
SCROGGINS: What concerns me most is that the industry totally relies on the frequent-shopper cards. I am hearing more and more people do not like having to use the cards in order to shop because if you do not have your card on you at the moment of purchase you have to pay double. More and more people will avoid the stores if they do not have the card with them.
The other thing is the privacy issue. If you shop in the frequent-shopper program is there a rule saying that they may or may not do something with your data? This is going to be a huge problem from what I heard from shoppers as we do research. As we do more on-line shopping, this will become an even bigger problem. The on-line shopping's real deal is now to rely on a frequent-shopper program.
So if you have a frequent-shopper program you can get coupons on the Net that those who do not have a frequent-shopper card cannot get. We have to watch the privacy issue and we are collecting mountains of data through the frequent-shopper program -- and the question is how long is that going to remain private? Pretty soon you have the huge data bank, and if there is an available product, even though now companies and collectors are saying that this is proprietary data, when push comes to shove, what are they going to eventually do with that?
TAYLOR: How can shoppers best be accommodated?
SCROGGINS: Retailers are already offering the specials and the frequent-shopper cards are offering excellent specials, so they are creating a way to get around that sharing of information kind of thing. Some of the bigger stores are doing in-store bakery. The floral department has an excellent stock and the prices are reasonable. There are not many stores here that are offering the dry cleaning or shoe repair. But you can buy stamps and even rent a postal mailbox from grocery stores. A few have full in-store banks; a few have ATMs.
SN: How do you think supermarkets can best take advantage of the findings in the survey?
BERNISH: There are a number of things. One, we are trying to add more services, things like dry cleaning in some locations, and photo development. Retailers also are continuing to figure out the best way to execute home-meal replacement. So two things are at work in the retailing environment. On the one hand, operators are exploring ways to add products and services that respond to their customers. Simultaneously, they are working on ways to deliver these services more effectively and cost-efficiently. Things like having self-checkout and express lanes are examples, as are services like having all check lanes in the store open during peak shopping hours like late in the afternoon, or having separate registers for different products.
All of these ideas are intended to try to deal with consumers in whichever way they want to deal with the store. That is, if they want to come in and get a salad from the salad bar or if they want to get a week's worth of shopping, the store is set up to deal with them anyway they want.
SN: How do you think the home-dining experience is going to change within the next few years?
SCROGGINS: Most people are looking to eat at home but buying fully or almost fully prepared foods. And we want more than hamburgers and we prefer to eat it at home. So the in-home dining is growing but in-home cooking is shrinking. We have become re-heaters rather than cookers. Cooking or food preparation is almost a creative outlet to be done occasionally and everyday meals are to be handled another way. That is going to do nothing but continue. I would love for grocers to ask five questions when they buy a meal-replacement program, and they are who, what, when, where and why. Supermarkets miss them so many times.
TAYLOR: I can't see that we are going back to the "Leave It to Beaver" days, where the family shares a meal around the table together every night of the week. Even if families can manage to spend more time together, I don't know that they necessarily want to spend a lot of time preparing meals. I see that as continuing to be important.
BERNISH: People need to know how to cook and prepare a meal. It's kind of a lost art right now, but my sense is that people would cook more at home if they felt more confident about cooking. Retailers could fill that knowledge or confidence gap with services like more cooking instructions on products, more cooking instruction in stores, easily obtainable information on how to do this, how to combine items for easy-to-prepare meals, and so forth. There will also be a push on for more variety in cooking.
SN: Is that ethnic?
BERNISH: Absolutely. Spanish cooking is becoming very popular. Tapas, for example, offers a variety of flavors and textures in relatively small servings. At the same time, I think there will also be an increasing emphasis on basic kinds of meals that someone can prepare at home without a whole lot of preparation. The key is going to be the ability to prepare food at home but in a relatively short period of time.
STEINBACH: There is going to be more assembly, just less and less cooking in the old traditional sense of cooking. I still think people want to eat at home. We need to show them as a supermarket that we have a quick and easy way to make this food. I do think the Internet shopping is going to increase. Also focusing on health issues.
SN: How can supermarkets in general best take advantage of that trend away from the traditional sit-down dinner, toward prepared foods?
TAYLOR: As challenging as it is, the most important thing for chain stores to do is avoid the cookie-cutter syndrome and assume that all customers want the same products and services in every store. And the challenges to retailers would be to really study the demographics in every neighborhood they operate in to deliver the products and services that are desired by that particular neighborhood.
SN: Shoppers are not finding the shopping experience in the supermarkets as exciting as they formerly did or as exciting as other formats. How can retailers address that challenge?
BERNISH: Supermarket shopping is probably never going to be the exciting concept or the exciting experience people would hope it would -- you are shopping for necessities or consumable items. It is something that has to be done.
Retailers can and already have made the stores much more appealing in terms of ease of getting around, variety of products and the variety of services available -- things like having the exciting specialty shops that give you the feel of a European market and all of that kind of stuff. But until somebody comes up with a way to make shopping for canned vegetables and toilet paper exciting, there is a certain point where you can't add much to that.
Then you have to look at the convenience factors, the ease of shopping, and the quickness of checkout and customer service. There are things that are being done that are neat. I have seen these electronic kiosks that you can go in and basically create a meal and print out the meal and the recipes and the products and so forth. The home-meal replacement, that has and continues to have promise because of the convenience of going into a store and getting a meal that you can take home and serve. The problem is a food-service issue, not a food-retailing issue. I don't think retailers have come to grips with that yet.
SN: What do you see as the shopping experience of the future?
TAYLOR: The supermarket is going to continue to be a place of great excitement with technology and enhancements to checkout systems, self-checkout even with home delivery, smart boxes. I think the supermarket business is one of the most interesting fields of retail anyone can be involved in. There is so much. And there is a constant effort toward improvement, which results in greater efficiencies and increased convenience and value.
STEINBACH: More excitement and more education. That is why we're looking at the health aspect and food safety. If they are shown ways people can eat healthier and the convenience factor, we have a winner. If they are shown how to eat a healthy balanced meal, they will really enjoy it.
SCROGGINS: I don't think the Net is going to know it or take over but I think the on-line shopping is going to increase dramatically. That will decrease a lot of sales from the big stores especially. More and more people in more and more places are looking for on-line shopping, if it can be delivered.
BERNISH: You will continue to see the evolution of more and more formats. You will see bigger stores, but you will also see smaller stores. You will see a continuing development in the perishables area. One result of the increase of global travel and global interaction is that American consumers have become exposed to not only more items but they've also gained an appreciation for "freshness" in the sense that they want their perishable items to be as fresh as possible -- all the time -- and are willing to shop more and even spend more to obtain them.
Throughout much of Europe, household refrigerators are about the size of one that you would see in a college dorm. What does that say? That says that consumers in Europe buy their produce and their other perishables virtually on a daily basis. American consumers are very much concerned with freshness and quality. The smart retailers are evolving programs to take advantage of that by, for example, creating formats that emphasize perishables and are geared to serve the needs of a shopper coming into the store almost on a daily basis.
Another area is service. Food retailing is still highly labor intensive, but operators are increasingly challenged to hold down costs, especially labor costs. So the essence of "service" is being re-thought. Do you need platoons of people working in the in-store bakery or deli? Especially if they are not well trained or if there is constant turnover? Perhaps the answer is fewer people, who are better trained and more knowledgeable about their products, accompanied with more self-service.
At the front-end, can you speed checkout with fewer employees? These are important issues that everyone confronts. Another issue has to do with finding the best balance between offering what customers want and keeping a tight rein on costs. We will see a counter trend to category management because people do want variety and choice and don't like their choices constrained to the two or three items the stores have stocked. It is certainly most efficient and makes most sense to a retailer from an economics standpoint to take a category and have the two or three top sellers and either eliminate or greatly reduce the slower-moving items. But given the increasing diversity of tastes and preferences, there are a significant number of consumers who will want and will frequent a store that gives them that variety that they might not have under category management. So, you will see retailers going back and saying, "wait a minute, maybe I should stock these kinds of mustards and these kinds of olive oil and so forth."
SCROGGINS: Retailers have to acknowledge that this is going to be their market. I see the shopping mix in-store changing dramatically within the next 10 years. They can handle part of that by offering meals to go.
