Tag Archives: grocery

True value is found in being true to your value proposition

As the author of Fresh & Easy Buzz says in a recent article about Tesco Neighborhood Market, “value is in across all grocery formats and it’s not just a fad.”

Many experts are calling the current economic climate a “perfect storm” of inflation, government debt, reduced consumer spending, weak dollar and intense foreign competition. It’s enough to make retailers reach for the red pen to start marking down prices faster than you can say, “Dollar General.”

Even the staunchest niche and aspirational retailers, including Whole Foods and Safeway, among others, are trying to find ways to fit the square peg of their specialty brands and products into the round hole of extreme price sensitivity.

Whole Foods has become known as “whole paycheck” because of the “high” prices consumers are willing to pay for the products and experience of the organic and natural foods retailer. But now the grocer is putting an extreme emphasis on its private labels, and its leadership has promised consumers it will find a way to make products less expensive.

But is this the right strategy? The right reaction?

Only time will tell. But there are certainly two retailers who will tell you that pairing another key brand attribute with low prices is a potentially profitable way to go: Target and Wal-Mart.

Wal-Mart has put up big numbers in the past year, going from $43 to $59. Target stock is down about 10 points from this time last year.

Target sort of pioneered “get more, pay less,” but as the economy has worsened, Wal-Mart has performed exceedingly well. That might be-and this is conjecture, of course-because Wal-Mart “owns” low prices, making it better suited to be recession-ready while injecting a bit of style as its business model allows.

Everyone else, from Whole Foods to Safeway to Tesco, would be playing catch-up to Wal-Mart’s EDLP proposition at this point.

Remember, Wal-Mart fared none too well when it tried to water down its EDLP concept with style and name-brands that strayed from its core value proposition. Today’s batch of niche and aspirational retailers would do well to remember to stay true to themselves.

That doesn’t mean they can’t graft a cost-savings aspect onto their existing strengths and points of differentiation, but it does mean they shouldn’t shift away from what makes them successful.

Furthermore, they had better be ready to do things operationally and within the supply chain to reduce costs as much as possible to fund any kinds of discounts they want to use to entice consumers. Because shoppers are happy to pay less, but they don’t want to sacrifice quality, and that money has to come from somewhere.


Shopping and Mood are Strongly Correlated

We were surfing MSNBC to get the latest US medal count when we came across this little dandy:

“Shopping in a lousy mood will cost you.”

You’ve heard how hungry shoppers spend more? Well, a study shows the SADDER you are, the more you spend. Check it out here.

The good news for food marketers is that shopping can actually LIFT your mood.

Can’t you just see a whole new line of weekly supermarket promotions?

Perk up your disposition with outrageous deals on asparagus and T-bones.

Give your mood a lift with this week’s stock-up sale on meat.

Feeling blue? Our two-for-one blueberry special will fix you right up!

It may seem trite, but this study adds to the credibility of our conventional wisdom that there is a strong relationship between the visceral feelings and the act of buying something.

People are less likely to SEARCH for a solution than to REACH for the nearest solution to their discomfort. We happen to be selling one of their favorites: FOOD.

Traditionally, we’ve focused almost completely on price. What if circulars were more about promising feelings than discounts?

Obviously, it’s something that will require a delicate balance in the current economic climate, but it bears repeating:

Emotion sells and emotion spurs purchase.

On the road and lovin’ it

Three days ’til family vacation blast-off. Meanwhile, the Spoon is taking it to Tulsa for a couple days to visit grocery stores (it’s nice to have family in the business).

Look for a post or two on how a regional chain of stores is having success in the same locations its larger, national predecessor couldn’t make work.

Don’t male it in. Make appealing to men a priority.

More than two-thirds of principal grocery shoppers are female adults. Most of the remaining third are adult men.

One-third of anything is a chunk to leave on the table for your competitors. Don’t believe me? Next time you’re out to eat, try giving up one-third of your favorite dessert to the annoying guy at the next table who talked too loud during dinner.

Who has two thumbs and is doing more of the grocery shopping? This guy!

Here are some things we’ve learned about men and their shopping habits:

  • Only 25 percent use a list, compared with 75 percent of women
  • They usually don’t ask for help (except maybe from the butcher)
  • They say they want to “get in and get out,” but they’re more prone to wander (no list)
  • They tend to buy in larger quantities than women, especially meat

Now an agency is focusing its energies and expertise on marketing to men. It happens to be the agency we work for. Check it out at Marketing to Men.

There are ways to take advantage of what we know about men and their behaviors. They are important influencers and decision makers in a multitude of decisions that affect our industry, both in the home and at the office.

More on this later. Have a peaceful weekend and safe travels if you are on the road or in the air.

When and where is the purchase decision initiated?

It may not surprise you to learn that for much of our white collar work force, the list of priorities for the morning looks something like this:

  1. Check e-mail
  2. Attend to immediate routine job duty
  3. Decide where to go to lunch
  4. Fire up iTunes
  5. Read a review of the latest smart phone on the Internet

It doesn’t mean people are shirking their duties. It’s just that technology and the meshing of work and family life present opportunities to engage in all new ways and places.

According to Advertising Age, about one-quarter of the workforce spends about an hour each day reading blogs.

That doesn’t count sufring the Net. It doesn’t count time spent reading e-mail. It doesn’t count time spent selecting and listening to music on iTunes.

Each of these channels presents opportunities to influence the consumer decision on which place, product and price to choose.

To say that 70 percent of the purchase decision occurs at the point of purchase is like saying that the decision of whom to marry is made when the groom says, “I do.” Our relationship with consumers is a courtship, and we owe it to our brands to leverage every point of contact at our disposal.

We do a great job in-store. We do a great job on TV. We’re learning how to use the Web.

But consider this:

The average primary grocery shopper is a busy individual. Time is growing ever more precious. Grocery lists are being made on the elliptical trainer at the gym and written on sticky notes in office cubicles.

One agency calls this Borderless BrandingTM. It’s the idea of reinforcing the brand message in places that are most relevant to the consumer.

Like a milk bottle:

Or a sidewalk:

It is at those contact points that brands can win the battle before the target enters the store.