After acquiring the brick-and-mortar grocery chain, Amazon started to integrate Whole Foods into its delivery machine. Just look at some Whole Foods Market stores that started to look like a warehouse for delivery pick-ups with regular customers being pushed away.
Most grocery stores are originally designed for shoppers, not delivery pickers. This means small inventory storage areas. That also means employees who pick products for online orders would need to grab most items from the same shelves as shoppers. They would roam aisles with scanners in their hand, asking their colleagues on the floor when they can’t find something. All this time could be better spent elsewhere, namely helping other shoppers. The same scene would happen at the customer service counter, or even in the parking lot. Within the limited space for both regular and online shoppers, order pickers and delivery personnel will start driving your foot traffic away. These are the customers who come to buy one thing and end up buying a few more. Amazon has something else on its agenda. Not only do they offer free delivery for online order fulfilled in Whole Foods, they recently announced free delivery for Prime members shopping on Amazon Fresh too. So what are the other big grocery retailers doing about this? While Walmart, Kroger and other chains offer home delivery for a fee, they have been promoting ways for customers to order online and pick up groceries in their stores (perhaps as an attempt to recoup some store traffic). Customers have responded well to this partly because it is free. But, as the New York Times put it: “With its new announcement, Amazon is showing it is willing to spend heavily on delivery where its competitors have not, and make up the costs through other purchases made by Prime members, to undercut the value traditional grocers have been offering.” Kroger is fighting to stay relevant, despite the increased investment behind online and other initiatives pressuring the bottom line. “It said it has expanded grocery pick-up to 1,780 locations and delivery to 2,225 to cover about 95% of its target households. It’s also working with European online grocery retailer Ocado to build automated warehouses to fulfill e-commerce orders.” That is a lot of investment to be on par with Amazon’s “get-in-and-out-quick” scheme. Before anyone forgets, the tech giant has been trying to “Amazonify” everything with its Prime membership program. Fast delivery, convenience, limited human interaction represent the long-term bet in changing consumer behavior - not only in the grocery space. Once that loyalty is built for Prime customers, they will buy more, and more frequently. Meanwhile, brick-and-mortar stores’ sale per customer transaction starts to come down. New food products will not sell because online shoppers mostly replenish the supplies they usually put on their virtual shopping lists. As they can’t discover and taste a new flavor online, there are no impulse purchases, only chores that need to be ticked off. Next thing you know, who needs a supermarket, when you can have a pick-up center? The same narrative is happening to the restaurant industry, where “ghost kitchens” are rising. Who needs to go to restaurants to eat, when you can order online? Who needs to open a restaurant and weather high operating costs, when you can rent space in these delivery-only kitchens? There are no brick-and-mortar stores without customer traffic. Traditional supermarkets are a dying breed, at least the statistics and predictions say so. But is there a way to turn it around? The answer might be hidden in plain sight, something that is already in physical stores’ DNA. For large players, the much-larger brick-and-mortar store fleets are proving to be key weapons against Amazon. They are playing to their strengths: “Target has been remodeling stores and is doubling down on its own line of stores brands to differentiate its merchandise and lure customer traffic.” “Kroger has engaged with DDB creative ad agency to come up with a “refreshed, stronger brand” to drive visits.” What about smaller supermarkets? Have they got a chance of survival? Yes if they don’t fall prey to inertia. Yes if they don’t jump on the home delivery bandwagon without proper consideration. Yes if they find a way to bring people together over the mouth-watering appeal of prize ingredients, exotic treats and thirst quenchers. It’s a very basic human need. Shoppers appreciate the chance to indulge their taste buds through free samples, elevated by an energetic brand ambassador in-store. And supermarkets have every right to make it about the food, connecting people and delighting senses through food. It’s the combination of behavioral psychology and spatial design to make people care about supermarkets again. It means making grocery shopping more like going to the movies, or a theme park. You are not going to sell convenience or efficiency, but “experience.” One of the most effective ways to generate customer buzz is offering product sampling. When shoppers “experiment” and derive pleasure from the process of sampling, engaging, interacting, and evaluating various options, they tend to take more time shopping. And you know how the story goes if you increase the all-important “dwell time” metric in this industry. The bottom line Instead of helping delivery companies destroy your business, partner with new product vendors to create continuous experience of new flavors discovery. So your customers feel welcomed at your stores rather than being obstacles to the rushing product pickers. While Amazon and others are betting on the future of grocery shopping as “getting in and out quickly without interacting with another human being”, focus on creating customer experience that makes shoppers come to your store not because they have to, but because they want to. --- Want to see how smart demo scheduling technology can help you create better in-store experience? Get in touch here.
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 Some brands will only pay for demos (in store sampling) because the retailers require them to support the "exposure" of their products. Yet many of today’s well recognized brands achieved spectacular results in a very short time by using the leverage of field marketing. Their example shows that investment into smart field marketing/experiential marketing strategy can produce return by far higher than other forms of advertising.
Introduction of In Store Sampling Brands are always looking for ways to get closer to consumers, especially in this digital era. With the fragmented media landscape, many are turning to “shopper marketing” - delivering messages to consumers when they are in shopping mode and receptive to such content. In-store sampling is among the most effective vehicles to drive consumers towards trial and purchase. Whilst the path of purchase can vary for different products, consumer packaged goods generally enjoy a shorter conversion path (unlike buying big ticket or discretionary items where the buyer journey may take multiple turns). That means there is a greater chance for field marketing tactics such as product sampling to influence consumer behaviour. Product sampling effectiveness When the sampling marketing strategy is considered as part of an overarching marketing strategy, it can deliver great results both directly and indirectly. Direct benefits Many studies have proven that in-store sampling produces both an immediate and long-term lift in product sales. There is even a snowball effect in sales if repeated sampling events are organized for a single product. In addition, in-store sampling drives trial of the new product, with a well-established track record of boosting sales of new product launches. Why is it so effective? As rational as humans think they are, we are still driven by our senses. Hence, one of the key purchase decision factors is the ability to sample the product or see a demonstration, with 83% of respondents agreeing. Sampling also taps into the impulsivity of shoppers, with nearly 74% of respondents observed to make impulse purchases of the product being sampled. The physical proximity can make forgotten cravings more salient. Another psychological factor is “reciprocity.” When you are given something, you are more likely to reciprocate. Especially in a high-traffic store, shoppers with a “heightened awareness of the presence of others at the sampling station may feel a level of social pressure to make a post-sample purchase.” Indirect benefits If brand awareness is your goal, product sampling can also be a great vehicle to assist your other marketing channels. Executed well, the in-store sampling experience can generate positive word of mouth - the most persuasive source of information for consumers. Another indirect benefit is that running in-store demos can increase total category sales, not just sales for the sampled product. Devising an effective sampling marketing strategy As with any business operation, you need a clear strategy for the use of in-store sampling for brand/product activation. An important but often overlooked fact is you need to firstly know what success looks like. By having the right measurements and goals in place, you can work backwards to lay out a plan of attack. So what are those metrics? 1. Traffic engagement - what percent of passing shoppers stop to taste the product 2. Product engagement - how much time a shopper spend by the demo station 3. T2P Conversion Rate© - what percent of shoppers who taste the product end up purchasing If your sampling marketing strategy is focused on market test of a new product, review and analysis of captured shoppers comments, may prove the most valuable part of the exercise as they allow to tune your new product characteristics and messaging in sync with expected customer experience. Considering the cost-benefit equation, a research paper in the Journal of Retailing advises: “If the incremental cost of a sampling event exceeds 15 times the unit price of the product, the event ceases to be profitable.” The next step is to then work out a detailed plan by considering the following factors: place, people and process. Place As the usual adage goes “location location location”, we can’t emphasize the importance of choosing the right store and right area within the store to run product sampling enough. Essentially there are two factors: Store traffic and shopper demographics, plus other practical considerations. And a number of questions for brands to consider:
People To avoid the trap of “old school demos”, hire brand ambassadors (BA) that are knowledgeable and enthusiastic about the product. Obviously, skimping on this by using minimum-wage BA would yield minimal return. On the other hand, properly trained BA can effectively convey the product and brand image. This helps in influencing shoppers’ perception of the promoted brands positively. Process Running smooth in-store demo campaigns requires coordinating several factors: product inventory, store’s timetable and BA’s availability. The conventional way which involves multiple rounds of calls to different people generates inefficiency and dramatically lowers the ROI of in-store sampling. Thankfully, there is a better way through using software. The simplicity of demo scheduling software implementation and ease of adoption makes the tool an attractive option. Smart technology enables a smart coordination, which combines lower management overhead with market intelligence and empowers quality BA to do their job. Conclusion Like other marketing strategies, in-store sampling is not a set-and-forget thing. Continuously refining the plan based on analytics and data will help brands get the most out of it. FAQs Q: How do I keep quality Brand Ambassadors? A: Reduce their friction and frustration by giving them the ability to self-register availability and certainty of scheduled slots, as well as on-time payments. Q: Do I need to hire a dedicated demo coordinator? A: No. You can reduce overhead by deploying smart tools that allow brands to schedule and manage up to 400-500 demos/month Q: Why aren’t a lot of brands deploying the sampling marketing strategy? A: Many still think in-store demos are expensive and a waste of time. However, with proper planning and enabling tools, it can help brands build better relationships with stores, BA and ultimately, shoppers. Q: Can I organize effective demos without hiring in-store sampling companies? A: Yes. If you’re confident in recruiting BA or already have a database/relationship with promotional staffing agencies, the rest can be effectively handled by using technology to minimize cost. --- Want to see what smart demo scheduling technology can do for your CPG brand? Request a free demo here.
Protect and defend the leadFor now, supermarkets are still leaders in the American food retailing landscape, both physical and online. However, the gap is narrowing. They can’t afford to be complacent as supercenters, mass stores, and warehouse clubs are catching up, especially in the online grocery domain. “This suggests these less food-focused channels have been able successfully to leverage the online relationship they initially established in non-grocery categories to win over grocery purchases as well” (FMI’s 2019 U.S. Grocery Shopper Trends report). What about online-only retailers? The trend is upwards there as well, with around 33% of shoppers now buy from these online grocery retailers ‘at least sometimes,’ more than double the number from 2015. Meanwhile, Amazon has also branched out to physical stores, either through the acquisition of Whole Foods, the launch of cashierless Amazon Go stores, or even a new grocery chain altogether. The opportunities in grocery store marketingIn this digital era of Amazon, Netflix and Facebook, people still crave the human experience and connection. And quite rightly: “Retail anchors a human experience” - The Shelby Report Online fatigue This phenomenon can be true when there seems to be an unlimited number of choices on the Internet. So whilst online wins in terms of offering broad selections, it’s not always the best for consumers. Brick-and-mortar stores can capitalize on providing customers some guidance in making purchase decisions. Some grocery store marketing ideas include offering product curation, or featuring products through in-store demos. Sometimes, less is more. Customer data Retailers often forget that they have access to first-hand customer data when shaping grocery store marketing strategies. From the early utilization of this in the form of loyalty programs, now there are even more opportunities to leverage insights and win customer engagement. The reason to visit a supermarket or store Customers are increasingly looking for experiences, especially Millennials and gen Z. In fact, the so-called concept of “The Experience Economy” dated back to 1999, and has given rise to a myriad of terms like retailtainment, experiential marketing/retail. So what is the reason someone would go to a store if online retailers are competing on price and range? The answer is you can differentiate by customer experience. Think long and hard about what you can offer that online retailers can’t (the same way they probably have thought about you and their point of difference). Take a look at Costco. They have become famous for “free samples,” which on the surface seems to cost the business a lot but actually results in increased sales. Subconsciously and gradually, consumers have found a very compelling reason to visit Costco, where they will end up making purchases. Ideas to increase sales in retail storesWith the physical space and the human touch, supermarkets/retail stores can grab those opportunities to provide customers with a better tactile experience, with more curation and interactivity. A recent Retail Store Tours study shows that “when more senses are activated during the shopping experience, higher satisfaction levels are generated, which helps foster customer loyalty.” That is why organizing in-store demonstrations to help consumers discover, try, and sample new products is so effective. Not only can they taste, see, smell, and touch the product, they can also interact and have Q&A with the brand ambassadors. This simple tactic also casts a wide net to help increase sales, namely:
Simplicity of implementation The beauty of it all is that it is not as complicated to organize in-store demos as you think. There is no need to add dedicated personnel as most supermarkets do not have so-called full time demo coordinators anyway. The streamlining and coordinating of different people and processes can be left to a technology solution that is intuitive, easy to set up and operate, such as Demo Wizard. Proven return on investmentAs a final note, let’s look at the gains from these grocery store marketing strategies.
First of all, the cost of running in-store demos is covered by vendor brands. Second, there are mutual benefits, namely the lift in sales of a brand and product. In fact, in-store demos can result in “a 150% lift in same-day sales for a demonstrated CPG item – followed by a 90% lift for that item over the course of the next 90 days.” This shows that operational executives of supermarkets should consider the long-term gains by thinking of in-store demos as a “network of events.” Just as how you would evaluate the effectiveness of advertising, think beyond the single instance and consider the “halo effect.” With an integrated approach and the right tool, in-store demos can help improve the stickiness of your supermarket’s brand as you improve your customers’ experience. The time to act is now, when online-only retailers are still trying to navigate the brick-and-mortar space. Schedule an online demonstration of Demo Wizard, or see how it helps streamline in-store demo planning here. Before you read why you don’t get them, perhaps you want to know why you want them. Supermarket Executives Love In Store Demos Since you are reading this, it is relatively safe to assume that you already realize the value in store demos bring to your stores, but let me provide some numbers. Smart grocers love demos because they draw foot traffic, sharply increase the sales of promoted products, and boost sales for an entire category of products. While Retail Industry research shows 150% boost in the same day product sales*, Food & Beverage product demos often report over 400% sales increase, and that makes it one of the most successful Grocery Store Marketing Strategies. Consider additional 90% - 120% residual boost in item sales over the quarter following demo event, all paid for by the vendors, and it becomes very easy to understand why smart grocers want more demos. The lessons below are distilled by analyzing tens of thousands of demo reports conducted by dozens of CPG brands in thousands of US supermarkets over the last couple of years. Why Is It So Difficult to Schedule In Store Demo? Most supermarkets do not have dedicated demo coordinators whose prime responsibilities are to schedule and coordinate promotional events with vendors. More often than not, it is handled by a person who already have too many “hats” to wear, some with specific measurement of performance. So it is not surprising that her attention is not focused on a number or effectiveness of the vendor’s in store demos. That leaves Vendors with a very unpleasant task of multiple calls to the same store, and pain in the neck holding the phone while waiting for a “right” person who can give them availability date for a demo event. Since stores often use Wall Calendars and no workflows, they usually will give only one date/time slot per day for a request. They may use a Google calendar, or a generic scheduling software without workflow coordination, which won’t provide any remedial relief. The more difficult and unpleasant it is for a Vendor to setup the demos in your store, the more likely she will spend her budget funds at a store of your competitors. I do have hard data to support this statement**. While it may not be economically attractive to add a full time, salaried employee to manage this process, specialized software for in store demo management automation is readily available for supermarkets at an affordable price. Use of such software eliminates the requirement for dedicated demo coordinator to manage scheduling process. Showtime Blues Sometimes the great ideas to increase sales in retail stores are fall flat facing execution challenges. Too often the problems start when a Brand Ambassador shows up in your store and reports to a manager on duty asking for a designated place for the demo table. The response “I don’t know anything about any demo today in my store” deflates the Brand Ambassador enthusiasm and undermines all preceding efforts by Vendor, product Brand Manager, Distributor and your Buyer to create a successful selling event. While the space for demo challenge can often be resolved with with tactful negotiations, the lack of product inventory on hand for a demo, is a soul crasher. At this point all is lost, the Vendor is stuck with the black hole in her demo budget and nothing to show for all the money and effort. It’s time to cut her losses and go with different, more cooperative stores. Ask And You Shall Receive Brand managers, who control promotional budgets, frequently have no idea what stores carry their products they would want to promote. Many products on supermarket shelves are sold to the buyers by brokers and distributors, who often do not have access to the brand’s marketing budgets. Proactive request from the store management, communicated directly to a manufacturer or via your demo agency/partner, often brings surprising number of demos with very little effort. Most samples for in store demos are purchased in store by brand ambassadors at retail price, and reimbursed by the manufacturer. If you offer to charge wholesale price for the samples, a vendor may reciprocate with an offer of multi demo campaign. In summary Money, like water, flows where it meets the least resistance. The supermarkets that welcome demos in their stores, i.e. make it easy to set up and execute, receive far more promotional funding and get better profit margins than the stores that see demos as distraction and nuisance. *https://www.retailtouchpoints.com/features/executive-viewpoints/how-retailers-and-suppliers-can-evaluate-the-long-term-impact-of-in-store-demos ** Request the data. Please enter “I do have hard data to support this statement**” in a message field, and will email it to you. Retail transactions done online afford customers, wholesalers, retailers and even the manufacturers, the luxury of conducting business anywhere at their own convenience. With speed and accuracy, operations can be carried out smoothly - one can therefore see the dilemma traditional independent grocers face. The concerns about falling traffic in your stores are very real as over 71% of consumers trust that they can find better prices online. So how do you as a traditional retailer survive and most importantly thrive amidst the disruption and turbulence caused by ecommerce? Below are some ideas to increase sale in retail stores. The first key to survival is to retain and increase foot traffic in your store - this is one of most important grocery store marketing strategies. The good news is that 94% of retail sales are still conducted in brick and mortar stores. Even with the ease of ecommerce, people still prefer a physical experience, a relationship, an interaction with the product or the retailer. This is what defines us as humans - our desire to interact. The Major Keys to Survival in this Volatile Retail EnvironmentOne of the best strategies to boost number of customer visits in your stores is to leverage this human desire to interact and to discover new experiences. Try to re-imagine your store as an event space which your customers see as being a fun place to visit - not just the place they need to go for weekly provisioning. Promoting limited time price discounts (TPR) on popular and well known products only leads to erosion of margin. “If consumers come to expect price cuts as the rule rather than the exception, then price promotions lose their ability to boost sales and become unprofitable. “ Consequently, one of the major keys to survival in this volatile retail environment is the creation of exceptional customer experience in your stores. Retail leaders realize that customers now have a plethora of choices available to them. Surely, the store that provides the best experience is certainly where the customers will throng to. In essence, the traditional grocers have the advantage over ecommerce giants in providing quality customer experience through in store demo and other event based marketing strategies. According to a survey of 1,786 US grocery shoppers conducted by Food Marketing Institute. “Among all regular food shoppers, brick-and-mortar supermarkets continue to enjoy a clear edge over online grocery retail in perceived performance on key evaluation criteria, especially in providing fresher produce (a top store-selection driver) and better customer service,” According To a Survey With the ever dynamic nature of retail today, there is no way you can talk about improving customer experience without including in store demos. This refined tactic helps to draw customers, boost sales of demonstrated products and also improve the sales of other products in that category. To withstand the barrage of online competitors, you have to think of an in-store demo as a network of events rather than one elaborate show. Knowing the right product to demo, duration of each demo and location for the demo are very crucial to your stores survival. In order to measure the impact of in store demos on your stores’ Sales Per Customer Transaction, you have to consider
Promotional StrategiesUnderstanding return on investment for these promotional strategies can go a long way in attracting the sponsors for them. Analysis of data, collected effortlessly by your POS, holds the key to leveraging vendor’s promotional budgets for increasing foot traffic in your stores. Any quality in store demo agency or vendor’s field marketing organization collects valuable data specific to the demo events they conduct. Cross referencing POS with demo data can produce empirical evidence, that would entice vendors to demos in your stores all day long, and that will lift:
In retrospect, arming yourself with the right information and tactics will give you sufficient leverage in the unstable 'waters' of retail. Reaching out to your customers, giving them the very best and improving on your operations are essential tips for relieving the pressure of online competitors. |
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