This article originally appeared at www.grocer.coop
A few months back, I was giving a seminar about growing sales, and the group talked about the value of a good demo program. This raised a lot of questions from the participants:
- How do we know demos are effective?
- What if you can’t afford to pay someone to do demos?
- What if your store is too small?
- How do retailers find more time to do demos?
With these questions in mind, I called John Palmer at the Wedge Co-op in Minneapolis and Stacie Traylor, demo coordinator for Sacramento Natural Foods Co-op, to ask if they could offer some advice. John and Stacie are a couple of folks who know the value of a successful demo program.
Palmer, a man who fits his job to a “T,” offered a wealth of knowledge as we sat and had breakfast. Affectionately known as the Sample Saint and the Demo Demon, Palmer has become a fixture at the Wedge with customers young and old alike and is known for his hats (he creates one himself for every demo) that reflect the products he is sampling. One week it’s a tower of Amy’s pizza boxes hovering above his infectious grin, the next week it might be made from labels of Chocolove chocolate. As Palmer says, “The magic is in the hat,” no matter what it is made from. Once he catches a customer’s eye, he can get him or her over for a sample.
Whether or not you use a hat, the important thing to remember is that your demo should create a buzz.
Palmer’s eight tips for a great demo
1. Have a great story. This means doing a little homework. Customers love a story to go with the product—a good tag line brings them in.
2. Back up the story with printed handouts and information. A recent survey of shoppers found that customers who received product information with a sample were more apt to buy the product.
3. Offer coupons! Believe it or not, people do like coupons, and coupons work. (See the sidebar on “Palmer’s rules of thumb.”) According to The Packer 2004 fresh trends report, consumers wonder why produce departments don’t use more coupons.
4. Having a great demo person who commands attention is essential.
5. Be generous with your samples. If you are stingy, your customers will be, too!
6. Have a clean and handsome table to showcase the product.
7. Record a thorough demo report. John and Stacie both fill out reports that track what they’ve sampled, what it cost, the shelf price, etc.
8. Have an effective way to evaluate the demo. John does this by reviewing the average daily sale of the item for the week before; he then notes the sales to demo customers served, and the total sales achieved.
Palmer does demos three nights a week at the Wedge Co-op and has been at it since 1999. Traylor, on the other hand, has been at it for about a year and is employed full-time. She organizes demos seven days a week, with a different focus each day, from 4 to 7 p.m.:
Traylor’s five tips for a great demo
1. Demo your sale items! A lot of companies will send you free product to demo when their items are on sale. Contact the companies directly or through their reps. Don’t be afraid to ask farmers to give product for demos—this is one of the best ways for both of you to introduce a new item.
2. Pick things that you or other staff members really like. Chances are that if you like it, others will, too. Remember, your enthusiasm is infectious!
3. Make the demo pleasing to the eye. It helps to have a nice bowl or plate; make hand-lettered signs on small stand-up chalkboards that draw people’s attention.
4. Have the product nearby. If people like the product and they can grab it right away, they will. If they have to walk across the store to find the item, they may forget about it by the time they get there.
5. If possible, have available some information about the product, as well as coupons. Many companies will send you educational materials, coupons, and recipe cards that can make your demos more effective.
Traylor mentioned also that demos are a great way to get crossover customers to try things that are new to their world. John echoed this with, “Ask yourself, would you pay $20.00 a pound for cheese you’ve never tasted?”
I’d bet each of us could think of items in the store that would do better if given a chance. Especially in produce, demos can make the difference in selling lemon grass or burdock, or in helping someone realize that a local grower’s tomatoes are worth $1.99/lb. when other stores are selling tomatoes for $.99/lb.
If you are going to do demos, make sure you let the department managers know well in advance. Both stores highlighted in this article have demo schedules and agendas that are released in time for managers to adjust their inventories and prepare for the increased sales.
Do demos work? Can you afford to pay a good demo person? Consider two final points:
If you have questions and would like to contact John Palmer, you can reach him at the Wedge Co-op or firstname.lastname@example.org. Stacie Traylor can be reached at Sacramento Natural Foods Co-op, 916/669-0430 or email@example.com.
Palmer’s Rules of Thumb
Mark Mulcahy is an organic produce educator, based in Santa Cruz, California (firstname.lastname@example.org).
Meal kits have come a long way since their U.S. debut just five or so years ago. With a wide variety of healthy, diverse food options and cooking guidance while eliminating time-consuming prep work and food waste, meal kits offer abundant benefits for consumers, thus driving the category’s rapid growth. But what about the benefits for meal kit providers?
Customer retention challenges coupled with high costs of production, packaging and delivery of perishable products have proven the original meal kit model to be a logistical nightmare. As a result, meal kit companies are reconsidering their approach, increasingly turning to brick-and-mortar retailer partnerships and acquisitions. (See: Blue Apron and Costco; Plated and Albertsons; HelloFresh and Giant Food; Home Chef and Kroger.)
Retailers such as Raley’s, Walmart and Meijer have also begun launching meal kits of their own, eager to snatch a piece of the rising meal kit consumer base without the commitment of a subscription. According to a recent report by market research firm Packaged Facts, based in Rockville, Md., the U.S. meal kit market had sales of $2.6 billion in 2017 and will grow nearly 22% by the end of 2018 to reach $3.1 billion. The company predicts that the category will continue to grow in the coming years, but as more traditional stores offer meal kits as a product rather than a service, the market will increasingly resemble other premium, convenient grocery products such as fresh-cut, ready-to-eat produce.
As such, retailers and meat suppliers are upping their efforts to offer convenient, creative and healthful meal solutions, further blurring the lines between meal kits, prepared foods and value-added protein products.
Perfecting Portion Sizes
When it comes to meat—which many consider to be the most important meal kit component—providing profitable portion sizes can be a challenge. While other components, such as produce and spices, are already available in precut and prepackaged formats that can easily apply to meal kits, the meat industry has consistently prioritized selling large quantities of meat by the pound and must learn to adapt to offering flexible package sizes.
“What’s interesting about meal kits is, logistically, those retailers and manufacturers are struggling with getting all of these different products in one box or package, and that’s why the first place that meal kits came to be was in a [vertically integrated] subscription model,” says Jonna Parker, principal with Chicago-based IRI’s Fresh Center of Excellence. “The meat industry plays a critical role in making sure that the right portion of the right protein is available in that kind of package size. And that’s an increasing trend in value-added that we’re going to see demand for, whether it goes in a kit itself.”
Indeed, breaking down a whole animal into precise portion sizes is challenging for suppliers striving to provide meal kit products while also remaining price competitive. “Meal kit companies quite often are very focused on hitting an exact size,” says Jefferson Heatwole, EVP of sales and marketing for poultry producer Shenandoah Valley Organic, based in Harrisonburg, Va. “If you’re going to cut something down to a small portion size, what do you do with the rest of that product?”
Projecting demand and avoiding spoilage also pose challenges for meat suppliers seeking to provide items for meal kits, particularly when offering a variety of meal kits on a regular basis, says Catherine Golding, business development manager for Washington, D.C.-based True Aussie Beef & Lamb, a subsidiary of Meat & Livestock Australia. The company provides market research for the Australian red meat and livestock industry, promoting the consumption of beef, lamb and goat meat for foodservice and retail applications, including meal kits.
“From a supplier standpoint, ensuring consistency is important,” Golding says. “Meat cuts must be similar in size, shape and appearance to avoid shoppers from sorting through inventory for the ‘best’ choice.”
From a retailer’s perspective, merchandising meal kits in strategic areas of the store is essential to increase shopper exposure and encourage new customer acquisition. Raley’s Family of Fine Stores, based in West Sacramento, Calif., recently launched its own line of subscription-free chef-created meal kits, including full kits, quick kits, creative kits, sides and meal components. The retailer displays the line on front endcaps in about 75 of its stores while merchandising them in the prepared foods department at its remaining locations.
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As the competition with restaurants for consumer dollars intensifies, operators of supermarkets and other retail food outlets could explore two potential growth opportunities.
Whole Foods, Fred Meyer and even Costco have amped up their fresh product offerings,” she said in a Nov. 14 webinar sponsored by Ingredion, Inc. and coordinated by Food Business News. “With economic improvement in the U.S., the pressure is on for retailers to compete with food service to maintain their share of stomach"
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Much has been written about Amazon acquisition of Whole Food Markets. Every day brings an avalanche of opinions: from the industry pundits' speculations on a scope of inevitable disruption of the grocery industry to flash analysis of the Whole Foods price reductions. I decided to join the choir and offer my observations and opinions from a perspective of the industry ecosystem participant.
So far there were strong indications of higher traffic in Whole Foods stores after the acquisition and lower pricing on selected items. There are also reports on internal operational changes that have sent the vendors, brokers and distributors into a very unhappy frenzy. The most disturbing are the Whole Foods shoppers' complaints about the quality of organic produce and availability of products on the store shelves.
At the time of this writing there is no evidence whatsoever of any positive change from the perspectives of shoppers or the grocery ecosystem. In fact, there is every indication that Amazon adopted a very hands off approach to Whole Foods management who continues to implement operational initiatives conceived long before the acquisition took place.
In the wake of the acquisition, some major grocery retailers announced significant investments into technology to combat Amazon's (technology giant) foray into their territory. Some, like Kroger, started to court smaller, regional product brands that are threatened by Whole Foods abandonment. That may be a very good development for artisanal food manufacturers, when and if it actually materializes.
Most analysis you can find focuses on the impact of the Whole Foods changes on very large, publicly traded companies. Very little is written about how the independent grocers, small batch product manufacturers, food brokers, demo agencies and merchandisers are impacted by these changes. There is some evidence of lower foot traffic in the independent stores and an ebb in the promotional activities by the brands on the store floors. However, many grocers we spoke to are in denial that a small grocery eco-system will be materially affected. And that is a mistake.
Thanks to Jeff Bezos's relentless focus on the quality of customer experience, i.e. long term sustainability of Amazon business, everyone assumes that the acquisition will produce some magical result and force a major change in how we buy our food. So far this "earthquake" is yet to produce a tsunami of change. Amazon does not always succeed, but it succeeds most of the time. Change now. Before you have to.
While the small, independent grocers cannot compete with the big boys' scope of technological investments, they can and should mobilize their ecosystem partners to provide a better, more personal, experience to their shoppers. As Whole Foods pushes away their trade partners, who helped them to become successful, independent grocers could use this opportunity to forge closer alliances to provide more engaging shopping experience in their stores.
Some people may think it is a trick question. Let me assure you it is not. Unfortunately some brands will only pay for demos because the retailers require them to support the "exposure" of their products. If this is your "strategy", the most successful demo is the cheapest one. In this case the demo budget is viewed as a promotional expense and no direct return is expected, except continuing to keep the product inventory on the store shelves.
If you think that only major brands are big enough to afford aggressive field/experiential marketing, you are missing the point - it is their commitment to demo programs that made them big. The brands that strive to promote products on the store floor, to the consumers who are there to buy, do it to lower customer acquisition costs. The success of such a strategy depends on effective execution to bring the desirable results. Well planned and coordinated demo programs are known to generate significant and lasting increases in revenue.
One of the most critical elements of planning is to decide which stores and at which times would likely have the most advantageous environment for your products to shine - even the best tasting products with the most creative packaging and sales sheets would not have a successful demo at the low traffic store. On the other hand, the pressure of very high traffic will cause even the best Brand Ambassador to give away too many samples without converting them to sales.
The most successful programs not only consider shoppers' demographics of a store, but also plan a frequency with which a sequence of demos should be scheduled in that store to maximize sustainable conversion. It is often far more profitable to invest in a smaller number of the "right" stores, than throw money at the wide range of locations in an effort to cover the market.
Recruiting and training quality Brand Ambassadors, demo table setup, selection and presentation of flavors, coordination with stores and inventory availability - are all key ingredients for "cooking" an effective field marketing campaign. However, without deciding on how to measure success you are not likely to achieve consistent results.
Recent research from Customer Experience IQ used four metrics to measure demo program effectiveness:
It is important also to measure the performance of individual Brand Ambassadors and correlation between the time of each demo and the product re-order data. The exact set of metrics depends on your products and your demo reporting capabilities.
If you believe in the mantra “innovate or die,” you might conclude that the largest consumer and retail brands are terminally ill. Giants like Kraft and Clorox all seem to be too slow and enslaved to shareholders to innovate. At the same time, they may be too large to perish… at least for now.
What we have here is the perfect storm for consumer mergers and acquisitions (M&A) avalanche.
Big consumer packaged goods (CPG) companies are struggling to sell their products to a new generation of shoppers. A quick look at sales across various product sectors shows a steady downward slide for big brands. In the past five years, large brands lost market share to small brands in 42 of the top 54 most relevant food categories, according to Jefferies. Erosion is happening in nearly every consumer category.