Share on Google+LinkedIn

Creating the Center Store of the future

June 26, 2017

GMDC’s latest research explores how grocery retailers can leverage a bounty of proven high-margin opportunities across the center store to add millions in sales

Cross-merchandising, thinking holistically and incremental sales of nonfoods attract and keep valuable, high-spending shoppers in stores

 

COLORADO SPRINGS, Colo. – June 23, 2017 – Conventional retailers must rethink their stores and online strategies to satisfy how people really want to shop or risk fading into irrelevancy. Global Market Development Center (GMDC), an association that connects its members to advance innovation in the marketplace, examines proven high-margin opportunities across the center store and how taking a holistic view can pay off dramatically in its latest next practice report: Center Store: Essential for Total Store Growth.

With continued food price deflation, online leakage of impulse categories, and evolving shopper attitudes, retailers in all formats and sizes must be more intentional and intuitive about the adjacency of relevant nonfoods in the perimeter, grocerants and in-store health clinics to enhance the shopper experience. “The best stores run wellness sections that parallel today’s healthful lifestyle and self-care trends,” said Patrick Spear, president and CEO, GMDC. “Their inline areas for housewares, home, baby, home office, pet and more, infuse the latest technologies and design. And they collaborate with brands that know end-users well, while innovating to connect emotionally. It’s these type of strategies that upgrade store image and performance, and win the hearts and minds of today’s consumer.”

GMDC collaborated with Nielsen, Kantar Retail, Acosta, Profitero, Jacent Merchandising, GlobalData, BHDP and RNG to curate robust and actionable insights that reveal how pairing the right food and nonfood can increase sales from 200-400 percent. “These ‘out of aisle’ strategies will snap historic food-first and food-only cultures to attention by helping retailers navigate the tempest of change in shoppers,” said Mark Mechelse, GMDC’s director of research, industry insights and communications. “It’s irrefutable that shoppers – led by Millennials – want nonfoods to be as convenient as possible to ease their tasks, and they want it cool and edgy to match their adventurous nature. Nonfood items today are a ‘badge of honor’ for consumers. It’s truly the way these categories will differentiate themselves in the new world of shopping.”

Incredibly, if all food retailers move shoppers up from three general merchandise purchases per year to four purchases, they would add $500 million in additional sales. These nonfood destinations in center store, perimeter and front end also suit today’s lifestyles and shopper attitudes, making housewares, pet, baby, personal care, pharmacy, and health/beauty and wellness top categories for bringing shoppers back. Retailers that play offense with nonfoods grow trips, basket size and store image as satisfying, mission-completing destinations.

Center Store Reimagined

As retailers and their trading partners engage with this report, they will be taken through a journey of exposing the tailwinds and pain that Center Store faces today and uncover solutions to win their shoppers back. A new “Center Store of the Future” is conceptualized in the final pages that is designed to give stores new meaning and purpose by reflecting how shoppers will shop over the next two - five years. There are more store-in-stores, new mix strategies, health-occasion groupings, and provocative architectural that will help the food channel attract a smarter shopper who is seeking an experience and keep them coming back for more. The entire design contains new technologies and identifies consumer “hot spots” that will assist the shopper with ease of navigation and deliver ultimate convenience.

Download BHDP + Retail Tomorrow Supermarket of the Future report.

Next Practices

Some of the next practices for unlocking the potential of the Center Store to spark real financial opportunities and raise customer perceptions are:

Create a manager position over cross merchandising. Give this person the sole authority and autonomy to decide, based on shopper needs, the optimal product pairings and places for cross-displays to occur.

Commit to cross-merchandising metrics. Add label codes to products to denote in-store locations that trigger customer purchases, so successes become repeatable.

Emphasize categories and services where Amazon struggles – Think of what shoppers would rather see or try, offer innovative solutions not found online, offer a higher degree of in-store expertise for testing and product demo’s.

Offer Dieticians and Health Consultants – Shoppers trust knowledge. As customers engage with food and nonfoods, offer help and advice to eat smarter, healthier, and train associates to have a deeper understanding of community issues and events.

Partners and supporters of the report whose contributions have made the report possible are Hallmark, American Greetings, BIC, Navajo Incorporated, Energizer and True Brands.

To download the report, and other next practices offered by GMDC: https://www.gmdc.org/content-library.