Enhancements to dairy departments in new or remodeled supermarkets could generate incremental volume of 14,000 to 28,000 dairy units annually per store, according to research compiled by Dairy Management Inc., the Dannon Co. and Kraft Foods.
Since 2006, the coalition has compiled and analyzed data from 340,000 shopping trips, 22,000 retail supermarket audits, 2,500 consumer intercepts, and category and department “reinvention activities” in more than 1,000 retail stores. One result has been the “Dairy Department of the Future,” a virtual prototype developed to illustrate the best practices gleaned from the coalition's research, which DMI debuted at last week's National Grocers Association's Annual Convention in Las Vegas.
“When you look at gross margin return on investment, a dollar spent in dairy is going to give you better returns than just about any other department in the supermarket,” said Scott Dissinger, senior vice president of DMI, the producer-funded organization that helps manage promotional efforts at the American Dairy Association, the National Dairy Council and the U.S. Dairy Export Council.
“It has been this sterile department that quite often is at the end of the shopping trip,” he told SN. “Shoppers blew in and blew out, and made rote purchases. It's not a delightful shopping experience.”
The coalition's research contends that dairy departments net grocers 2.6 times more true profit per base foot than the produce department, and 6.2 times more than the grocery department. However, DMI's “Dairy Department of the Future” report argues that most merchandising schemes don't tend to treat dairy as a modern department. With the common linear, two-sided layout of dairy aisles “dairy is treated as another ‘center-store’ category rather than as a leading fresh-food department,” the report reads.
The virtual prototype developed by DMI presents some high aspirations for the new department. Located adjacent to produce near the entrance of the store, the department's coolers are spaced widely apart, and feature endcaps with grab-and-go dairy, juice and eggs. In between the coolers there is plenty of room for smaller coolers, meal solution centers and portable cross-merchandising displays such as a sandwich center with a selection of deli meats, sliced cheeses and bread, and a sampling kiosk where shoppers can try out new products. The milk area remains on the back wall, to preserve traffic flow patterns.
Employing some or all of these suggestions will make the department easier to shop, will offer stronger freshness cues in the area, will foster more shopper interaction and engagement with dairy products, and will allow retailers to merchandise products more intuitively, among other best practices, the report suggests.
Noting that many of the changes suggested by the prototype would only be feasible in a newly built store or a whole-store remodel, Dissinger said that DMI hopes the virtual prototype can give retailers a new sense of the dairy department's potential.
“We're trying to get away from that very long, white, sterile dairy department/aisle, and turn it into something much more engaging,” he said.
“It's the collective power of all these best practices that would make it work. It's the concept of shopping, not searching.”
