Monday, 09 January 2017 15:04

Southeast snow, nationwide cold front could be a welcome blast

This post is part of the 10 Items or Less blog.

As the first week of the new year brought more lousy news for grocery – weakening demand sinking sales in December, and pessimistic forecasts for some of the industry’s biggest stocks – it likely comes as a relief to grocery retailers that a temporary solution was literally falling from the sky by week’s end.

And while the forecast snowstorm in the Southeast U.S. was sparking what looked to be enormous spikes in grocery store traffic for the obligatory bread-and-milk runs, things were actually improving all over as a nationwide cold front is motivating shoppers to seek “need-based” items in an otherwise quiet period for shopping, said Evan Gold, EVP of global service for Planalytics, the Berwyn, Pa.-based firm that forecasts demand based on weather.

“I think this is overall good news for grocery as the entire U.S. is facing below-normal temperatures this week,” Gold said Friday morning. “We’re in a post-holiday, post-gift-giving period where people are spending only on what they need. When the weather is like this, we see needs for items like hot drinks, rock salt, wiper blades and snow shovels go up.”

An Instagram photo of a busy pre-storm Kroger store in Atlanta.

Like the haircut, the snow shovel tends to be one of those purchases that can stand up to the threat of online retail. “People just don’t buy them until they absolutely need them and by then is often too late to order it online,” Gold noted. “It’s an item people wind up going to the store for.”

Gold said the grocery rush ahead of a storm tends to redistribute the pattern of traffic more than bring new customers to a store, so the opportunity for retailers in that space — in addition to managing labor and supply chains — is to grow the categories that accompany the weather.

This week, for example, Planalytics is forecasting ice melt sales up 63% vs. the same period last year; snow shovels will spike by 39%; and firelogs and hot chocolate will each see a 4% increase, nationwide. Retailers in Charlotte, N.C., can expect ice melt sales to jump by 200%. Atlanta grocery stores should see hot chocolate up by 17% this week, Gold added.

But even places like New York, where we awoke Friday to see an inch of snow had fallen overnight, should get a boost, he said. “A dusting is good because it’s not enough to keep you inside, but still enough to spark some demand.”

Attention Kmart shoppers
It’s hard to believe today, but there was a time when there was some debate about whether Wal-Mart or Kmart would win the supercenter war.

Kmart’s latest round of store closings include three casualties in its so-called “K-fresh” store test group: Roseville, Mich., Chillicoth, Ohio, and Uniontown, Pa. All of those stores were one-time Super Kmarts with full-blown grocery stores inside that were downsized in recent years to a smattering of fresh and staple items in a manner not unlike Target’s “p-fresh” stores. Liquidation sales begin Saturday. read more

Jon Springer
www.supermarketnews.com

Monday, 09 January 2017 14:33

There is a transformation happening in the food and beverage marketplace today. The fancy imported goods and gourmet products that were experienced on rare or special occasions once typically associated with premium quality are not exactly relevant to today’s modern consumer.

Why?

Because today’s definition and expectations of quality is being defined by the contemporary consumer. There has never been a time as now in which consumers have been more engaged. They have amazing access to information about food and drink, and food production more than ever before. For today’s consumers, food is now a cultural product to discover, share, make and trade. This reconnection with food and its origins is encouraging a new level of participation.

Think about this food cultural shift: not that long ago, chefs and their staff and all food production were kept in the kitchen, in the back off the restaurant out of view from diners. Today, it’s about open production and seeing chefs in action because food, cooking and the artisans behind the craft now take center stage. Now it’s hand-thrown pottery, having a front row seat to the magic in the kitchen and casual quality with hand-stitched aprons and plaid shirts.

In essence, America’s foodways are becoming more sophisticated and diverse as consumers increasingly aspire to higher quality food experiences they simply did not grow up with. With this consumer-driven redefinition of quality playing out in food culture today, what, then, does “premium” mean and how should brands express quality? This was the question at the heart of The Hartman Group’s A.C.T. (Anthropology. Culture. Trends.) Seattle symposium in September 2016: Deep Dive Into the Premium Food & Beverage Marketplace. Throughout the session, we engaged in a thought-provoking discussion to hone in on what today’s “premium” looks, smells, tastes and feels like. Here are some key thoughts about what premium means:

  • It starts with finding the most premium and simple ingredients available and optimizing for taste above all else. Then it comes down to the brand aesthetic and being sure that you're offering something more like an experience to the customer versus just solving a need state.
  • “Premium” often times may sound to consumers like an industry term used by CPG companies. The idea of it as a great product along with full transparency about how it's made, why it's made and the values of the people who are making it, is what resonates with consumers.
  • Premium is about the integrity of your brand. Talk about the brand’s values, which include full transparency in the supply chain; talk about the highest product quality and how you can achieve those things and communicate them effectively to consumers.
  • For food retailers and restaurants, look at how you can enhance the eating experience for your customers through the brands, products and services you offer. Share the stories behind the great foods and beverages you sell; be a source of inspiration.

Winning in the new premium marketplace is as much about thinking differently about a category as much as it is about selling different products. Product quality is implicit, while being authentic, transparent and passionate are key building blocks. Consumers will increasingly bring premium into their households and premium will continue to evolve in meaning.

Marketers should pay attention to which products are showing growth in the natural and specialty channels and ask, “what attributes do they have that will mainstream in the next two to three years?” They should look to other categories for inspiration as well. Staying on top of what premium means will be essential. Food and beverage stakeholders should:

  • Understand how consumers interpret premium via attributes, ingredients, packaging, location in store, etc.
  • Invest in premium strategically as some premium categories will evolve more quickly than others.
  • Categories in which health is a key usage driver will move faster.
  • The acceleration of premium puts retailers and QSRs in more direct competition than ever before.
  • Refrigerated packaged premium products offer the most white space opportunities moving ahead.

By Laurie Demeritt
smartbrief.com

Thursday, 05 January 2017 10:56

As an industry, we're increasingly more comfortable with who millennials are, and what they want. It's taken a long time, but most brands are now attuned to their likes, dislikes and behaviors.

But don't get too comfortable. Gen Z, born between 1997 and 2011, is now coming of age in large numbers, and marketers can't afford to take as long to come to grips with Gen Z as they did with millennials.

The first cohorts of this new generation, who are now 16 to 19 years old, are increasingly relevant to a wide variety of categories and products. Globally, they are huge too: around 2 billion of the world's citizens -- approximately 27% of the global population -- belong to Gen Z.

The danger for marketers is that Gen Z is not millennial-lite or even millennial-extra strong, but different in distinct ways.

Born and growing up at a time of financial crisis and institutional instability, Gen Z are frugal and brand wary. But they are also industrious and collaborative. Smartphone-first and impatient of brands that don't offer them connected experiences, they expect visual and technical excellence and transparency at their fingertips.

While millennials coveted personalization in their media and advertising experiences, attempts at hyper-personalization often come off to Gen Z as intrusive. Ironically, while Gen Z places a great emphasis on personal privacy, they expect brands to be fully transparent. In an age where everything is knowable, brand imagery and values have to be consistent and discoverable across all brand touchpoints.

This presents something of a conundrum for marketers. Gen Z not only challenge how brands communicate, they challenge the very notion of a brand's authenticity and transparency in digital.

Appealing to Gen Z's unique sense of self and the world around them will require brands to embrace three key paradigm shifts in 2017:

First, brands need to invest media dollars and focus activity in digital platforms that allow consumers to co-create a shared brand experience. Unlike the personalization coveted by millennials, Gen Z will be hands on -- they want to try it, take it apart and recreate it.

Lego Ideas, for example, allows audiences to submit ideas on new Lego products and let others vote and comment on them. Submissions showcase fully built Lego products. Products created from Lego Ideas include a Lego version of the Mars Science Laboratory Curiosity Rover.

Second, brands need to give their target consumers a deeper look inside the brand via owned media. Beyond simply offering products and services, brands need to share their story, their purpose and details about their production processes. Alongside owned messages, they also need to push such content strategically via sponsored content opportunities. Such openness will allow Gen Z to determine if the brand's values match their own.

Patagonia is a model brand using this strategy. In its new Fair Trade campaign, Patagonia challenges consumers to consider where their clothing was made, and shares video of the Patagonia production process and the people who make the clothes.

Finally, brands need to switch their creative and media focus. The internet is built on left brain, linear thinking and is factually based. Gen Z seeks a digital experience that is more right brain, with a focus on imagination through technologies such as Augmented Reality and Virtual Reality, nonverbal immersive formats, music and stronger visual imagery. The Under Armour "Rule Yourself" campaign (winner of the Cannes Lion Grand Prix) featuring Michael Phelps resonated with its young male target and has become one of the most-shared Olympic ads of all time.

Winning over Gen Z will not be easy, but it will make brands and their advertising better and more adaptive in the process. Starting now will ensure we don't see the deluge of "What marketers don't understand about Gen Z" headlines that were so common as the millennials came of age.

By Joline McGoldrick
Joline is director of research at Millward Brown Digital.
http://adage.com/article/cmo-strategy/genz-challenge/307243/

Wednesday, 21 December 2016 14:26

A new whitepaper discusses how the health of consumers is driving retail.

As consumers strive to live more healthful lifestyles, their purchasing behaviors are changing rapidly, driving every buying decision. More than ever, consumers want—and expect—retailers and manufacturers to assist them on their health and wellness journey inside the store.

“As consumers around the globe search for better, healthier and smarter solutions that fit their lifestyle, the motivation for brands and stores to meet these needs means modeling an experience they cannot achieve with e-com,” said Global Market Development Center (GMDC) President and CEO Patrick Spear, in a press release.

Within the $3.4 trillion global wellness market: $1 trillion annually is spent on beauty and anti-aging; $574 billion is spent on healthy eating, nutrition and weight loss; and $433 billion is spent on preventative and personalized health.

The macro-level trends driving the enormous spending are happening so rapidly. Consumers are taking back the power to decide and are immersing themselves in knowledge and facts through technology and shared learning from friends and family.

GMDC’s whitepaper, “Next Practices: The Health & Wellness Consumer, Helping Trading Partners Shape the Future…Today,” showcases the trends shaping the new consumer-driven health and wellness movement:

  • Consumers are exercising three days a week on average.
  • 63% are trying to eat healthier, and 44% eat more at home.
  • 45% read product labels to make healthier choices.
  • Eight in 10 consumers are using vitamins and supplements to enhance their wellness.
  • 48% of consumers shop local for natural/organic products.
  • 45.7 million consumers use their phone to search for health and wellness solutions.
  • Baby boomers spend 42% more on health and wellness than millennials.
  • One in two Americans are shifting from health care to self-care as a result of rising costs.

It’s clear that health and wellness are fueling all purchasing decisions—shoppers expect retailers and manufacturers to offer a holistic, healthful experience that inspires them and speaks to their aspirations—from the entrance to the checkout line. “Health and wellness is a foundational element in everyone’s daily lives,” said Mark Mechelse, GMDC’s director of research, industry insights and communications. “For consumers to change behavior, they must have the motive, means and messages to do so. That is the essence of opportunity for collaboration between trading partners.”

Read More
Page 5 of 7