By Jim Dudlicek / NGA Managing Editor and Content Strategist
Are you a bonfire master?
It’s the most important position in retail, according to store design guru Kevin Kelley – that someone in charge of creating an experience that is neither too small to compel attention nor too big to scare people away, and the payoff must exceed the perceived effort.
Kelley was among the presenters at the National Grocers Association’s annual Executive Conference and Public Policy Summit, held Oct. 28-30 in Washington, D.C., focusing on how independent grocers can better understand and connect with consumers and the motivations behind their shopping behavior.
Independents can fuel excitement and recapture market share by leveraging the stories behind the business, Kelly asserted. “We need diversity in our ecosystem,” he said, noting that retail giants “don’t have a monopoly on joy and delight.”
Retailers must make emotional connections, Kelley stressed: “Consumers don’t like mushy middles. Pick a narrow niche and go deep. Our job is to divide your attention and change your mind.”
Store designs should be based on three variables: meaning, solutions and experience, Kelley said: “Do six things on a stellar level, not 50. Do one that’s impossible.”
As younger generations grow their purchasing power, understanding their motivations is vital, according to Andrew Henkel and Meagan Nelson from SPINS.
According to the latest SPINS data, the purchasing power of younger generations continues to grow. Millennials account for 29% of all retail sales; the youngest Millennials are 28 and still growing toward their full spending power. Gen Zs, age 18 to 27, are still emerging at 2%, with Gen Xers at 30% and Boomers at 34%.
Younger consumers are looking for value as well as values, with natural and specialty/wellness products growing in these key demographics. Nelson noted that three forces are driving consumer demand: sustainability; new global notions, like ethnic cuisines; and food as medicine.
“All of these things are happening at once. This creates opportunities for disruption,” she said. “Lean into the ones disproportionately growing rather than just their percentage of sales.”
Key trends to embrace: healthier sodas and energy drinks, beverages that aid digestion, protein-enhanced snacks, probiotic dairy, and international flavors, particularly Middle Eastern, South American and Asian, especially Vietnamese.
As important as what consumers buy is how they shop. Craig Rosenblum from Columbus Consulting stressed the importance of shopper data as he looked ahead to the end of the decade.
“Data is the foundation for personalization,” Rosenblum said, emphasizing the necessity of governance to ensure proper maintaining of data over time to ensure its value. Rosenblum outlined “steppingstones to success in 2030”: data, an IT strategy and roadmap, artificial intelligence, hyper personalization, and training and education.
Retailers must contend with consumer behavior that includes shopping around, omnichannel price checking, using shopping apps, and redeeming coupons and loyalty rewards in search of greater value, speed and convenience – all highlighted in a session on disruptive marketing trends moderated by Dunnhumby’s Erich Kahner and featuring Ron Bonacci, owner of REB Enterprise; Gabe Disbrow, president and CEO of Leevers Supermarkets; and Tristen Kendall-Barros, director of marketing at Roche Bros. Supermarkets.
Consumers are demanding more personalization, including targeted savings, localized assortments and a frictionless experience, and retailers must strive for real-time personalization across all channels, Kahner said. “Personalization is a powerful means to regain trust by increasing the emotional components of the trust equation and delivering value to the customer.”
Bonacci said AI puts retailers of all sizes on equal footing by making it easy to leverage data: “AI goes beyond just personalization. It can run millions of records in minutes – you can target consumers on a long-term basis based on what they buy and where they buy.”
Independents may not be as all-in on AI and Big Data as the large national chains, but the importance of shopper intel is compelling many to test the waters.
Disbrow described his company as “AI curious – we’re not resistant but somewhat skeptical of the ‘shiny new thing.’” Meanwhile, Kendall-Barros said shopper data helps Boston-area Roche Bros. “tighten our bond with our customers by showing we know them in a way we haven’t been able to do in the past.”
