SCHAUMBURG, Ill. — We need to prioritize storytelling, creating experiences, managing shrink and, above all, communication, retailers said at the final event of the International Fresh Produce Association’s Retail Conference.
Joe Watson, the association’s vice president of retail, foodservice and wholesale, moderated the panel discussion June 10, with these three retail professionals sharing their key takeaways from the conference:
- Meghan Diaz, East Coast sourcing senior category manager at Sprouts Farmers Market, Phoenix;
- Mimmo Franzone, vice president of merchandising Longo’s, Vaughan, Ontario; and
- Chris Romano, vice president of produce, floral and gifts at The Fresh Market, Greensboro, N.C.
With the inflationary economy and rising costs of doing business, everyone is trying to protect their sales by watching their shrink, which can take energy away from selling, Diaz said.
“We're already in a period where we're worried about movement. We're worried about sales, consumption. And now, we're kind of playing defense,” she said. “So, I really loved the part that, if it can be measured, it can be managed. I think that's pretty powerful.”
Yes, Franzone agreed, retailers and growers need to, instead, be on the offense, and they can do that with better storytelling about quality and differentiation in their markets.
Most of us know that basic math: sales minus shrink equals profit, Romano said. “What really we need to do is get consumption up. That will fix the sales problem and the shrink problem,” he said.
Watson asked the retailers how they plan to return from recent dips in sales volume for the rest of 2022.
Because there’s so much pressure on the shopper’s wallet these days, they’re not veering too much from buying the bare necessities. So, we need to hone our communication skills to convince shoppers to buy, say, stone fruit and cherries, in addition to the more staple items such as potatoes, Diaz said.
“It’s important for us to really amp it up, to story-tell, to bring things to life in the department and omnichannels, and also really redefine how we're presenting it to the customer,” she said.
Before COVID-19, it was the price point that convinced a consumer to choose one product over another, or one retail store over another. Now, with all the inflationary costs, stores can’t offer low prices, so the focus has to shift to value.
“How do you make the customer feel comfortable spending more money? It’s about perception,” Diaz said.
And the perception of value shouldn’t equal money. It should be flavor and quality, Romano said. Value is also about consistency, in-stock positions, eating experience and innovations, Diaz said.
“You could put a lot under that umbrella,” she said.
A way to add value without lowering the price could be through solution-based merchandising, Franzone said. For example, a retailer could bring in larger mangoes, “so there’s a reason they’re $2.99. You’re getting to buy one instead of two, and showing value there,” he said.
Adding value at point of sale could also be placing the basil, tomato and buffalo mozzarella together so the shopper knows what to make. “The value proposition definitely should not be tied to price,” Franzone said.
Diaz attended a breakout session on sustainability and wanted to note how important it is for retailers and other companies to be authentic and avoid greenwashing what their company is doing toward sustainability.
“Everybody is working in silos on this front, and it's not getting us as far along as we would like to be in the industry,” she said.
One solution would be for large industry organizations to cooperate on creating set sustainability standards, such as food safety standards, "to where it's no longer an opinion, it's a fact. And we grow and build it from there,” Diaz said.
Franzone also attended a breakout session on operational challenges, where people discussed how everyone is working in silos in this aspect, too, and how smaller retailers don’t have enough pallets to put on trucks to make it worthwhile. With better two-way communication, however, these problems can be solved.
Business-to-consumer communication about operational challenges can improve also, so the consumer understands why cauliflower could be $9 sometimes but two for $4 other times.
As far as the many goals discussed at these sessions, Watson asked: What could actually be attainable?
Each company can set the highest sustainability goals possible, such as reducing waste to zero and work down to it by talking about how to get there, Romano said.
“And then celebrate each milestone, those small steps,” he said. “We should have no waste, right? But we need to get there, and that’s a growth thing. Celebrate along the way.”