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Retail Reflections

Winning strategies in the new world

The competitive climate has changed dramatically for retailers selling produce in just the last ten years. The most dramatic change has been the rapid proliferation of supercenters like Walmart, Target, and Meijer. This rollout is largely complete as they have saturated most trade areas. Although these stores attract consumers for other reasons, they end up converting a significant number to produce shoppers.

Less dramatic changes are also making an impact, such as farmers’ markets, which have grown five-fold in the last decade, community supported agriculture (CSA) programs with subscription (box-a-week) services, and even ‘agri-tainment’ farms. Drug stores are starting to offer convenience-focused fresh produce items and dollar stores have exploded with value offerings. And finally, we are seeing the next legitimization of the home delivery model with the likes of Peapod, Fresh Direct, and now AmazonFresh deploying more aggressive growth strategies.

The common impact among these new competitors is that they are each eating into the produce share of the traditional supermarket. Some are now offering a high-touch, authentic experience like farmers’ markets and CSAs, while others offer convenience or value like home delivery, drug stores, and dollar stores. Regardless, retailers have to embrace new methods to win.

We have all heard the stories about Generation Y or millennials: they don’t want to work hard, they’re not loyal, they spend all day on their mobile devices socializing and playing games. I seem to recall some of these claims were made about my generation years ago. Yes, we did not have mobile devices and social marketing, but we did have other ways we demonstrated a perceived lack of focus.

Within the millennial population, there are a refreshing number of high-quality employee prospects. Many care deeply about doing well in work and society, and are far more global in their thinking than I was at their age. They want to be successful in their career, albeit with a better balance between work and life, and to work for companies with which they align philosophically. I often find millennials are quicker to embrace the concept of sustainability than older workers, though the latter is more engaged in the dollars and cents of sustainability.

From my view, blending the two groups makes the most sense. Sustainability can be both profitable and impactful; retailers with committed sustainability programs are also likely to attract a higher quality millennial prospect. In your consumer marketing efforts, you will be more effective in attracting younger consumers when you employ millennials and demonstrate your commitment. Think Trader Joe’s—the chain’s employees are smart, educated, and hip—and as consumers, we buy into what they stand for as much as the products they sell.

Sustainability is a tougher subject to define and get one’s mind around. It’s important to have an ongoing and committed program that delivers on the three legs of the stool: people, planet, and profit. Sustainability can and should be profitable, it is not an add-on expense like traceability or food safety. Each initiative should be put through a return on investment calculation. Many projects, such as those focused on reducing usage of natural resources, can be valuable economically while improving the planet and creating goodwill among employees and customers.