Hi Five

JON SPRINGER

Hi.

Five years ago this spring, Food Lion debuted an innovative new store concept designed around convenience and dedicated to the idea of making shopping fun.

Starting from a single store outside of Charlotte, N.C., Bloom has since grown to 64 locations throughout the mid-Atlantic and the Carolinas. It is providing the Salisbury, N.C.-based retailer with a strategic option for store renovations and new market expansion, particularly in areas where share can be pried from upscale competitors. And it has also become a lab for new ideas in technology, merchandising and branding that can be passed along to other banners in the chain and those of Delhaize Group, its Belgium-based parent.

To spend time with Bloom officials is to be immersed in enthusiasm about the brand. Born as a “different kind of grocery store,” Bloom is growing up that way as well.

“All of us at the Bloom team feel like we're part of a cause, rather than just working somewhere,” Paul Sabattus, vice president of merchandising and training for Bloom, told SN in a recent interview. “Our purpose in life is to enrich people at home, and that's what we're striving to do.”

Quality and Variety

Officials refrain from using the term “upscale” when describing Bloom, preferring instead to say its offerings emphasize “quality and variety” as a means of providing convenience. But that emphasis has only strengthened as Bloom has evolved.

The store began life with a profile more similar to the Food Lion chain from which it was spun off. Its first stores, in fact, included the descriptor “A Food Lion Market” — in part, officials said, to send a message that it was specifically not going after an upscale shopper, and that prices would be generally be in line with those at its more Spartan sister.

Robin Johnson, Bloom's director of marketing and brand development and a member of a cross-functional team that spent 18 months creating the Bloom concept, said the store was developed primarily to address convenience in shopping, and to fill a void in the market for a store that offered it.

The changes since then illustrate a deepening understanding of what convenience means to shoppers, Johnson explained.

“They came in and they said, ‘Hey, this is really convenient. I can find things. Your technology is really cool. Your associates are off the hook,’” Johnson said. “‘But I expected more variety, and I expected more quality.’”

Bloom officials took their suggestions to heart, she said, and invested in a repositioning that, among other things, further developed the wine, bakery and meat departments at the stores and vastly increased the selection of perishables and specialty foods. Those changes got Bloom to a point where officials were confident it could perform as well as or better than existing Food Lion stores in certain markets, and the rollout was on.

“The biggest takeaway [from our first stores] was how much variety really matters to the Bloom guest,” said Cathy Green, the chief operating officer of Food Lion and also a part of the team that created Bloom. “As we looked at the buying habits and their expectations, we increased variety, and we continue to learn from guests how much it matters. I don't think it was that it took us by surprise, but it was a blind spot when we started.”

As an option to replace Food Lion stores within the company's marketwide store renovation programs, 29 new Bloom stores came to the Washington, D.C., market as part of an 80-store Food Lion market renewal in 2006.

Bloom also led the way as Food Lion expanded to Greenville-Spartanburg, S.C., that year. The brand has since expanded to the Norfolk and Williamsburg, Va., regions. Eight stores have been built from the ground up, with three new builds planned this year. An expansion to Raleigh, N.C., is on the radar.

Meet PAT

At a recent tour of a newly built Bloom store in Fort Mill, S.C., SN arrived just as a new technology platform known as PAT made its chainwide debut. The shopping cart-mounted touchscreens provide a variety of services, including a store directory, a digital sales flier and recipes, as well as the ability to build custom shopping lists and offers for shoppers who use the device in conjunction with their Breeze frequent shopper card.

Bloom has embraced new technologies, including PAT.

PAT stands for “Personal Assistant Technology” — Bloom's own name for the Concierge unit from Toronto-based Springboard Retail Networks. “‘Concierge unit’ is a little much for our brand,” Johnson noted. “So to make it human, we called it PAT.”

Officials said they would test PAT at the Fort Mill store before announcing plans for a further rollout. But history shows the chain is continually adding functionality to its technology to improve the shopping experience for its customers. Green pointed to the evolution of the Breeze kiosks at Bloom stores as the greatest change since the banner's debut.

“In the beginning, we had several kiosks positioned throughout the store — one that located products, one that could scan an item and provide recipes, and one in wine.” Green said. “Now we've combined all of these in an interactive kiosk that not only locates products but also provides customers with access to recipes and can print shopping lists. It seems like a small evolution, but it's incredible how much our guests appreciate simplifying the information and making it user-friendly.”

PAT is hardly the only new feature at the Fort Mill store. Tabletop Circle — the area near the front of the store that offered grab-and-go meals under the Boston Market brand in the first Bloom locations — has been integrated with an expanded deli department, including a custom sandwich shop. That feature is now available at 20 Bloom locations. Boston Market has been phased out for Taste of Inspirations, a private brand adapted from Hannaford Bros., Food Lion's sister chain.

“By integrating Tabletop Circle with a full-service deli, it's really a 360-degree meal solutions center,” said Johnson.

Other new offerings include custom cakes to the bakery department and, in Fort Mill, a new open design for service seafood and meat counters. Set in a corner of the store, the counters for both departments extend onto the sales floor with space between them. This removes the barrier between employees and customers that's typical of such departments.

“I think the shop looks great, but it's not only about looking better, it's about interaction,” explained Allen Frost, director of operations at Bloom South. “The goal is for associates to be able to talk to guests without any barriers between them.”

Bloom actively recruits associates who are enthusiastic about selling, particularly in specialty departments, said Sabattus. “We look for people who enjoy the brand and want to have fun, and enjoy food as a foundation.”

Elsewhere, selection runs deep — though allocations tend to be relatively small — in specialty categories like olive oils, pasta sauces, salsas and mustards, with appeal to the “foodie.” In all, the store carries about 34,000 items in a standard box of 35,000 to 38,000 square feet. Shelving runs 64 inches high — lower than the typical industry standard of 72 inches — because data suggests the average shopper is a woman standing only a shade above 5-foot-2, Bloom officials explained.

Sabattus said he is working on ways to facilitate more local merchandising in stores.

Bloom still prides itself on logical — if unconventional — product adjacencies and convenient offerings, such as a selection of high-velocity items at the front of the store. But the cooler with milk and eggs has been moved from dead-center by the checkouts to an area closer to the front entrance of the store.

“One of the things about being convenient is being open to what's working and what's not,” Frost explained. “Repositioning the milk closer to the entrance is a small thing that people may not realize, but it helps the flow of the store.”

Shop Happy

Bloom's positioning around a “unique convenience” proposition has lent itself to a branding campaign emphasizing that shopping at Bloom is fun and easy, and that its shoppers are savvy. A recent series of television commercials showed shoppers fretting to themselves over comical crises — “My roommate wants me to move out. Not cool, Grandma!” says one — before a encountering a brightly smiling associate who delivers some instantly cheering news. “Well, Bloom lets you create your own six-pack of beer!”

Simple pleasures.

“Especially in this economy, we want people to enjoy their shopping trip with us,” said Tammy DeBoer, vice president of Bloom. “From that perspective, shopping doesn't have to be hassle or a chore. It can be fun. It can make you laugh. We want to bring enjoyment to what many consider a chore.”

Because much of its activity to this point has been about encouraging trial, Bloom has been especially active — and effective — in creating buzz about its arrival. Working with the advertising agency Boone/Oakley, it created a billboard campaign featuring a pan of fresh muffins with one muffin missing — it could be found atop a crushed car beneath the billboard. So effective was the ad that when one of the giant muffins on display at a store parking lot was stolen — for real — the agency had to deny it was another publicity stunt.

Other customer come-ons are considerably more subtle. Bloom's store parking lots include reserved spaces for shoppers making trips of under 20 minutes — “or else your car will blow up,” Johnson said with a wink. The approach, she said, is part of “activating language” at the front of the store: Signs in the window show faces, not prices, and the entrance is conspicuously uncluttered with soda machines and other distractions. It's a look mirrored inside the stores, with a lack of mid-aisle product displays and merchandisers. The sign on the front door says Hi.

White Space

Officials declined to discuss the specific conditions under which it will flip a Food Lion store to the Bloom brand, but acknowledged that customer segmentation and clustering work using Food Lion's frequent shopper card data play a large part.

“The first thing we look at is the demographics and psychographics of an area, so we'll leverage our segmentation data, and [that will] give us the first cut through,” explained Green. “We combine that with the experience in the market. Segmentation and clustering to get an understanding of the needs and wants of consumers in the market, and then the experience on the ground. Combining those, it's quite obvious in many cases.”

Although Bloom officials are quick to point out that the banner's unique positioning fulfills a “white space” in the market, generally, the switch from Food Lion to Bloom means changing from competition with discounters to a more direct face-off with stores seeking upmarket clientele. In the latter battle, Bloom considers value — including price perception — convenience and service as its advantages.

“We have the ability to leverage the larger enterprise,” DeBoer said. “Food Lion is very, very efficient, and the combined power of Food Lion, along with Hannaford, Sweetbay and Harvey's, really allows us to continually offer great value.”

Some observers note that Bloom's association with Food Lion can be a hindrance, particularly when a store's location has a reputation for a certain offering. Stores like Harris-Teeter, a competitor in the Carolinas and in the Washington area, have larger stores and a well-developed reputation for specialty offerings and service departments.

But it's in combination with Food Lion — and with Bottom Dollar, Food Lion's nascent discount concept — that Bloom can have the greatest effect, as the quality/variety entrant in a three-tiered market share play.

“We're very fortunate that we have three distinct brands, with very sharp edges,” DeBoer said. “And we can compete with our premium competitors like Harris Teeter or Wegmans, and we can also compete with a Wal-Mart Supercenter.”

According to Frost, Bloom stores have tended to match or exceed the operating performance of the Food Lion stores that previously occupied the sites, without cannibalizing surrounding Food Lion banners. Officials declined to quantify the performance specifically, but suggested that Bloom's rapid growth speaks of its success.

“We have a store in Richmond we opened 0.7 miles from a very successful Food Lion. And the expectation was obviously that a certain amount of that share would go to Bloom, but that Bloom would also gain new share from the competitive base,” he said. “What we found was, Food Lion did better than we thought it would and Bloom did well too, so we were able to gain market share that exceeded our expectations.”

Bloom officials expect the brand will continue to be a growth vehicle, and they predict further evolution.

“Given the two years of research and the talent we had on this project, we knew we had white space to fill. The market was crying for uniquely convenient positioning that made grocery shopping fun and novel,” said Green. “And I knew that if we could bring that to them consistently, it could be a winner in the marketplace.

“My expectation is that Bloom will continue to innovate, continue to be creative, and continue to be bold experimenters and fast-to-market. The brand has that responsibility,” she added. “And in time, not only will we take those learnings across the Bloom brand, but we may take some of those learnings across to Food Lion as well.”