LAS VEGAS -- Stressing points of difference -- or creating them, if necessary -- is the only way for in-store bakeries to compete effectively in today's market, a former supermarket deli and bakery executive told retailers here at the annual convention and exposition of the International Dairy-Deli-Bakery Association.
Furthermore, ISBs, because they are so different from other departments, should be operated as separate, stand-alone businesses, said Bob Beckerman, former deli-bakery-food-service director at Supervalu, Minneapolis, and now a Chaska, Minn.-based consultant.
Beckerman said the first step should be to evaluate the competition to spot their weaknesses and then develop products and services they're not offering. Taking the opposite of the copycat approach works well, he said.
"Being faster and better and cheaper isn't good enough anymore," he said. "You must meet and exceed customer expectations by delivering a better customer experience 24-7. Sell the experience as well as the product."
Easier said than done, but Beckerman went on to outline the steps to get there.
"After you're done evaluating, identify what's necessary to develop favorable points of difference in your bakeries," he said. "Then, seek solutions that reduce the complexity of the business. Next, you've got to effectively educate and train [employees], and execute your differentiation consistently.."
Beckerman identified four strategies used in the marketplace to sell bakery products -- basic, copycat, simplistic and unique -- and they're all better than they used to be. He urged retailers to develop dedicated procedures to give customers what they want, but at the same time, to avoid trying to be everything to everybody. Retailers should also price items appropriately.
Pointing out that a retailer doesn't have to offer a unique product to be different, Beckerman cited success stories in which retailers simply promoted their use of premium ingredients or unique equipment, or the friendliness of their employees. What's important is that they made the eating and shopping experiences pleasant.
Quality is a given, but promoting that quality can make the sales difference, Beckerman said, as he related a cookie success story.
"One West Coast chain more than tripled its chocolate chip cookies sales, so they now make up 2% of the entire bakery sales and it was done by promoting the fact it baked the cookies frequently throughout the day, used premium chocolate for the chips or chunks, and it began sampling the product regularly," Beckerman said.
The chain also cross-merchandised the cookies in the dairy department at the milk display and, in fact, achieved its best sales there, he added.
"Another chain in Minnesota realized a 40% lift in decorated cake sales in a matter of weeks after creating a freestanding, cake-decorating kiosk," Beckerman said, adding the chain set up the kiosk in response to a suggestion from one of the store's decorators. Surveys show people spend $100 to $400 per party occasion, and cakes top the list of purchases for parties. "How much of that money are you getting?" he asked.
In the face of new competition from an everyday-low-price store down the street that was offering very low-priced sheet cakes, another retailer added a decorating station, instituted just-in-time ordering for custom cakes, and emphasized with cling-on signage that it used only premium ingredients. The result? While total store sales temporarily declined by 20% because of the new competitor, the ISB's sales held and went up 4%. In addition, the ISB's profit went up 2%, Beckerman said.
