There are essentially two types of retailers, those so focused on the four P’s that they overlook the fifth, and retailers that focus on people first. The difference highlights their commitment to making the shopping experience more enjoyable and easier to their loyal customers.
Some retailers choose product assortments that feature a few select brands, while others choose product assortments that address the needs and wants of their customers. While the first restricts choices and usually tries to encourage consumers to support the retailer’s private-label, the second strategy provides a good representation of available brands. It doesn't attempt to limit consumer’s choices.
Think about how your customers shop your store. Few of your customers are committed natural shoppers. They are looking to the retailer to educate them on the benefits of the “healty for you products”. They want a store that is easy to shop. A properly executed merchandising strategy will build loyalty with your existing consumers while making new customers feel welcome.
Segregated natural is where retailers offers natural products in a separate stand-alone section within the store - a store with-in a store. This is an effective strategy for consumers who are committed natural shoppers. These consumers will shop natural products first and then fill the rest of their needs in the conventional part of the store. Think of it as two separate shopping trips under the same roof. The pro is that the the section is easy to shop for the committed natural consumer. The con is that most consumers typically ignore it not wanting to compare like products in two separate areas of the store.
Integrated natural is where all like products, both natural and conventional, in a category are merchandised together. The advantage with this strategy is that consumers can shop the section more easily. It allows the customer to compare natural items to conventional items side-by-side. Most consumers will pay a premium if they perceive that a products has added value. The pro is that this strategy encourages and make it easy for the consumer to trade up. The con is that it does not clearly differentiate natural products from conventional items.
Integrated segregated is the hybrid of the two strategies. With this strategy, natural products are merchandised next to the conventional items in a separate natural segment. This makes it easy for the consumer to shop and compare natural items to other natural items as well as to conventional items. It encourages consumers to choose between the different segments based on their needs - similar to choosing between an economy brand and a premium brand. The primary advantage of this strategy is that it provides the retailer with an opportunity to educate their customers on the value of items between segments. It gives the consumer an opportunity to better appreciate the additional value for the premium price. Consumers appreciate it because it’s easy to shop. This strategy addresses the needs of the committed natural shopper and it makes it easy for new consumers to try natural products. It’s a true win-win for both the retailer and the consumer.