At the beginning of each new year, we all have that feeling of starting fresh with loads of optimism. And as retailers begin to implement their 2020 plans, the intent is to start strong, right? That’s a given.
Executing on this strategy can be elusive, however, if your plan is not well thought out and all the what-ifs and changing consumer demands aren’t taken into consideration. The what-ifs generally come in the form of extreme market conditions, especially now that winter has taken hold and the counterseason for so many products is in full swing. Retailers work to keep an eye on those supply situations to zig as the market zags, so to speak.
But I want to share what I believe will be a bigger opportunity in 2020: how retailers can build positive sales growth in a year when the forecast, according to a recent USDA report, is for low to negative inflation in fresh fruits and vegetables.
At first glance, when market prices are lower, that means more promotional opportunities, which gets retailers excited.
Being strategic in these situation is essential so as not to inflate volume sales at the expense of dollar sales – or drive up sales of one item in the department to the detriment of another. So where’s the opportunity?
It’s in finding unique items, products and packaging that will add value for consumers while offsetting a potential reduction in value on items impacted by anticipated market conditions.
Generally, when markets for a specific item or category are lower than normal, that’s an excellent opportunity to offer larger or unique packages or sizes to consumers as an in-and-out buy. That’s a situation in which taking advantage of market conditions can add extra turns and sales to your department.
One example I recall involved potatoes. It was middle of summer, a time when fruit takes center stage. An opportunity to promote 20-pound bags of russet potatoes came up at a time when the potato market was extremely low. We took advantage of the opportunity and placed the potatoes strategically in locations where the customer demographics would support the item.
The gain was realized by selling through on the potatoes, but the win was also in not impacting our regular potato sales. It was truly an incremental sale.
Produce marketers have done much of the work to support retailers by investing in the development of unique products, packaging and labeling. That innovation has come out of an enormous amount of research to understand where the gaps are so the industry can meet or even catch up with current and future consumer trends. It is incumbent on retailers to think forward to be well positioned to capture consumers’ attention when they come into the store.
Another opportunity – some would say a challenge as well – comes in the form of online grocery.
More and more retailers are developing their digital sales platform to make the shopping experience easier and more appealing. Almost daily there are new reports of retailers implementing a new service for their customers in order to increase the convenience factor.
In the end, this is a win for our industry to build consumption of fresh fruits and vegetables.
In the short five years since I left retail, it’s quite amazing to me how supermarket retailers have increased their digital business. While digital sales continue to increase year over year, most fresh produce sales take place in a brick-and-mortar format. However, according to Food Marketing Institute’s 2019 Power of Produce report, the gap is tightening.
So, what are key opportunities for retailers in 2020?
- Encourage consumers to get outside of their comfort zone for taste by trying new and different items.
- Capitalize on the snacking trend by offering more options in fresh fruits and vegetables.
- Market to your younger (and future) customer: kids.
- Make sustainability efforts a key focus area.
- Promote food as medicine.
If you know someone who does a fantastic job taking advantage of these kinds of opportunities, nominate him or her for PMA’s new Retail Award for merchant innovation. This award will recognize up to five member retailers, one for each category based on store count. The award will recognize the planning and execution of a unique or seasonal promotion for fruits and vegetables that educates consumers, increases store sales, and addresses sustainability in some way.
The nomination deadline is February 14. PMA will present the retailer awards at its Fresh Connections: Retail event in Philadelphia on March 26.
The PMA Retail Award was born of the need to recognize best-in-class retailers for their passion and purpose and being true merchants.
There’s story after story of produce directors and vice presidents who have taken their passion to the next level, not only in selling produce but in amplifying the successes of their teams.
This award is designed for those leaders who are driven by the idea that what they do every day impacts many now and in the future.
The produce department is positioned to have another outstanding year in 2020. Much will be learned along the way, and by the end of the year we can look back and say with confidence WE are growing a healthier world together.