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June 28, 2017
 

Achieving Relevance for Retail Success

More than ever, relevance is the be-all, end-all for retailers and every product in their stores.

Magazines and books not only have enduring, built-in relevance; they can also help enhance the relevance of other products and the retail experience.

Those were among the key messages delivered by Michael Sansolo, director, North & Latin America’s Coca-Cola Retailing Research Councils, during the 2017 Magazines & Books at Retail Conference.

Sansolo summarized the results of the most recent supermarket study by the North American research council, and offered some possible paths to conveying and heightening relevance and value to retailers and their customers.

The revolutionary changes affecting supermarkets include:

*A plethora of new competitors for food purchases, including discounters Aldi and Lidl; Whole Foods, Sprouts and other fresh-format retailers; drug stores, and restaurants that are responding to consumer demands for healthier food and convenience.

*New intermediaries and agents that are inserting themselves into the shopping experience between the consumer and the supermarket through demand generation, innovative and marketing and home delivery models. Examples: Amazon and meal-kit purveyors.

*Market disintermediation, in which consumers become directly engaged with brands and local or niche players. Examples: Kellogg’s, farmers’ markets, food delivery services like Instacart, and e-commerce players like Harry’s shaving systems.

Further, retailers’ traditional strengths are being eroded.

Retailers’ convenient location advantage is being undercut by e-commerce and the ability to order through voice-activated Internet-of-things devices. Product exclusivity is tough to achieve, because online sellers “can usually get whatever they want,” said Sansolo.

The ability to control the shopping experience by funneling consumers through the store is dwindling as retailers respond to consumer demands to greatly simplify or virtually eliminate the payment/checkout process — that being the biggest pain point in physical shopping. Amazon will eventually perfect a system for automatic payment within stores, and when it does, other retailers will have to immediately offer similar capabilities to survive, Sansolo stressed.

Consumers are also increasingly unwilling to do all of the labor (finding, picking, loading and unloading products) involved in traditional grocery shopping. As a recent Wall Street Journal article pointed out, consumers have to have a really strong reason “to go to a store and park their car.”

All of which accounts for the declining number of trips to physical supermarkets, and these stores’ declining traffic.

Operating In the ‘Third Dimension’

The crux of the new challenge is that while supermarkets are great at the traditional, core dynamics and logistics involved in their businesses — the “who, what, when and where” — they are currently “not so great at the why — why a consumer should go to a store,” said Sansolo.

Putting it in other words, the Council report stresses that while efficiency and scale are important, it’s no longer enough for food retailers to “look to verti¬cal integration in the value chain or to expand horizontally into diversified formats and channels.”

Instead, the key to motivating consumers to making trips to stores is operating in what the report calls “the Third Dimension” —defined as the entire consumer journey, from well before to well after the actual shopping trip. The journey spans “lifestyle triggers, preferences and priorities that precede and influence the eventual shop¬ping list; the realities of work routines and home logistics; and the changing social context of how meals are prepared, shared and enjoyed,” sums up the report.

At base, consumers want to "buy something they desire from someone that they trust,” said Sansolo. But in the past, desire was driven by need; while going forward, it will be driven by in-the-moment impulses or cravings. And trust, which was previously invested mainly in local, traditional retailers, is now, being expanded to a diverse set of digital disruptors.

Ways to Win

Sansolo highlighted a few of the strategies and tactics that will be key to survival and success for retailers and their suppliers.

Magazines and books can win with retailers by helping them:

*Offer compelling experiences to consumers. Seemingly small experiences are powerful if they grab consumers’ attention and help differentiate the product or the retail environment in a positive way, Sansolo said.

*Embrace digital engagement, including use of relevant magazine and book content and offers made through consumers’ personal devices, and digital displays, in-store.

*Become trusted sources of information. This is a huge opportunity for magazine and book publishers, who are “swimming” in the expert information and guidance that retailers are striving to provide to today’s information- and transparency-hungry consumers, Sansolo stressed.

“Become intellectual partners with retailers,” he urged, noting that helping them inform consumers about, health and wellness or beauty or other products and how they fit into their lifestyles can “take your partnerships with retailers to a whole new level.”

Magazine and book publishers can also use their wealth of consumer data and insights to help retailers understand their customers’ motivators and behaviors before, during and after the shopping trip, he said.

The core functions within media organizations — including editorial, ad sales and consumer marketing — need to cooperate to “explore the full knowledge base” and bring valuable information to retailers.

In short, “Help retailers be relevant to their consumers,” Sansolo summed up.

He also encouraged publishers and channel partners to visit the Councils’ site (CCRRC.org) to download a free copy of the full supermarket report and use the questionnaire at the end of the report for assessing an organization’s current retail relevance. He suggested gathering a diverse group of people within the company to participate in this self-diagnostic exercise, and using the insights gathered to focus on improving relevance within one or two of the 20-plus areas identified. -- Karlene Lukovitz

 

 
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