Advertised produce specials, or “ads,” have always been powerful marketing tools. Exactly how is not always so clear.
If you want a produce item (or any retail item) to rise sharply in sales, put it on sale. Duh, right? Of course, this is backed by a vast, support mechanism: print ad or online ads. Sometimes, there’s other ways of getting out the ad message, including television, radio or social media.
Before taking a hiatus from retail to work on the foodservice side of the fence for about six years, I admit to some degree of naive thinking regarding how customers perceived our ads. In my mind, I believed that customers poured through their Wednesday and Sunday morning newspaper ads at home on the kitchen table, and then made a beeline for the grocery store to stock up on ad product. While this might have had some validity, my break from retail revealed that this was only part of what it took to attract and retain customers.
Turns out, it is how ads are executed in stores that makes the most impact for customers such as myself, who have other things to do on Wednesday morning besides mapping out an ad shopping trip. Rather, I found myself shopping at my time convenience and allowing the store to convey what these ad items were. Prominently displayed produce, great selection and a great, well-signed price point were obvious giveaways.
Related: The eight-visit customer challenge
My retail experience also taught me: Don’t want to sell much produce? Then don’t build the big display.
I recall some produce managers who attempted this on occasion. “Dodging the ad,” we called it. In these few occasions, the produce manager saw strawberries, for one example, go from 40% gross profit at regular price down to just 8% at the ad price. They thought if they didn’t promote the ad item as directed, their department wouldn’t surrender as much profit that week.
However, this goes against numerous principles and direction. First, when those strawberries were negotiated at the buying level, their laid-in cost typically drops considerably. This weeklong price helps free up the opportunity to promote an item at a much lower price point, enabling customers who don’t buy as much (or normally don’t buy any berries) to stock up. And because the item is promoted at peak-availability and peak-quality, the purchased berries give consumers the appetite to buy again later, well after the ad price has changed back to normal retail — and at a normal gross profit level.
Ads drive volume. This volume generates other sales, with cross-merchandising and more throughout the entire store.
The other opportunity is indeed a way to boost profit dollars. We liked to preach to produce managers that “you can’t take gross profit percentages to the bank, just dollars.” It makes no sense if the ad-dodging produce manager sells fewer strawberries. Rather, if they were to move 20 times the normal volume, chances are that the lower 8% gross profit would generate far more in gross dollars than if they had just sold at regular price (and sold far fewer berries). Ads tend to do exactly this.
Even if a sale item is a loss-leader, ads are also an opportunity to attract new customers. If you can entice people to shop your store, you can make a good impression, not only using price, but everything else offered: over-the-top-customer service; a clean, well-stocked store; excellent quality, etc. It’s a start that provides the opportunity to win their regular business.
The produce ad is your friend. Use it to your advantage.