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Grocery retailers must take on this new role in the age of information

David Fikes, US-based Food Marketing Institute Communications VP, opened the FMI Private Brand summit with a bold declaration:

“We need to understand that we are no longer solely in business to sell groceries…” he announced to the packed room of manufacturers and retailers.

 “…We are publishers sharing information about that food.”

Shoppers are hungry for stories

The age of information has ushered in an awareness and desire for shoppers to control their consumption. Furthermore, they want their consumption to tell a story about their world view.

FMI’s research highlighted that 82% of shoppers now proactively look for at least one label claim, an increase of 6pts on the previous year. Shoppers see claims as important signals to help them and their family to eat well.

To them, ‘Eat Well’ means curating a diet that provides:

  • Health
  • Enjoyment
  • A mindful connection
  • Within their budget

Grocers still the villain to some

However, retailers are not yet seen as allies by most consumers in this mission. In 2019, only 49% of consumers stated as such – a reduction of 6pts on the previous year. Surprisingly, manufacturers fared significantly worse with a slim 18% of consumers considering them allies.

The data in David’s talk highlighted a clear need for the entire private brand experience – marketing, store, packaging, purchase and consumption – to align consistently to build greater trust expected of any ally.

'Co-shopping' means stories must feed the whole family’s imagination

Fikes went on to describe how the growth of ‘co-shopping’ – where multiple members of a family partake in grocery decision making – further emphasised the requirement for retailers and manufacturers to facilitate those conversations with accessible and clear information.

The channels where this co-shopping occurs have become increasingly diverse with the average of 2.5 weekly grocery shopping occasions per household occurring only 47% of the time in a primary store. A dramatic fall from 67% in 2005.

Shoppers are also now visiting four different companies per month. FMI’s research suggested that, far from dissatisfaction with traditional bricks and mortar grocery stores, it was a consequence of the increasingly varied family-by-family needs under the four sub-headings of ‘Eat Well’.  No single company can consistently serve all combination of family needs.

Furthermore, the research showed that the cannibalization of bricks and mortar by online channels has stalled. Online shopping continues to grow, but now fuelled by digital natives shopping more frequently.

The opportunity for retailers to be the hero of shoppers’ stories

In here lies the opportunity – by being useful to shoppers in their evolving role as a publisher, retailers possess a vehicle to grow loyalty and capture growth with private brands as the engine.

It is private brands, without a doubt, that offer the most leverage for retailers to collect, curate and publish product information to inform and inspire. However, retailers cannot attain the information they need alone. It is only by collaborating closely with their manufacturers of their product, the category experts, that shopper appetite for information can be truly satisfied.

But how do businesses go about forging these private brand partnerships? And answering that question for that room of retailers and manufacturers, was the very reason why I sat listening to David Fikes.

As well as being an avid listener, I was also at the FMI Private Brand Summit to present the findings of S4RB’s survey in conjunction with FMI into the state of retailer and private brand supplier engagement in 2019. To enable retailers to become successful communicators, they need to work closely with the suppliers of their private brand products.

Our survey had found discrepancies between the perceived importance of things like communications between retailers and manufacturers – which is essential for successful supplier engagement. Therefore, when not done well, a potential barrier to communicating your stories effectively with the consumer. You can download your free copy of the report here to learn more about the survey results.

The moral of this story

Shoppers want more information about the food they are consuming and the products they are buying. This has turned private brand retailers into information publishers as the need for them to share an increasing level of product detail with customers grows.

Retailer-supplier engagement is essential to foster the levels of collaboration that will allow retailers to collect all the necessary information about the products they manufacture to enable them to relay this back to consumers in a meaningful and compelling way to effectively activate shoppers

Based on the results of FMI’s 2019 survey where we questioned both retailers and manufacturers about supplier-retailer engagement, we found most organizations are prioritizing improving retailer-supplier engagement in the next one to two years.

However, we also found that despite ‘accessibility and open with private brand suppliers’ being the most important aspect of supplier engagement to retailers, only 5% placed this at the top of their to-do list. This is something retailers need to work on if they are going to successfully publish details about their products.

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David Taylor

david.taylor@s4rb.com

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