Special report: Groceries and Supermarkets

The survey asks, “What one supermarket issue is most important to customers?” Your likely answer may be: Service.

Bzzzz, wrong answer! The most important issue to supermarket consumers is store experience – spacious, bright, cheerful, a fun, rewarding place to be.

These findings were part of the “Supermarket Showdown” study of food retailing recently conducted by WD Partners (Columbus, Ohio). And while the survey set out to rate how well supermarkets are doing in meeting shoppers’ digital needs (see sidebar on page 34), it uncovered some interesting insights into the actual in-store shopping experience.

Respondents were asked to rate five categories in order of importance, including Experience, Service, Navigation, Community and Offer.
“Most retailers think service – employees who are knowledgeable and easy to find and check you out quickly – is the biggest differentiator among brands,” says John Youger, WD’s director of insights. “But that actually scored lowest of the five.”

The answer is good news for the store design industry. Business in this sector is brisk, with most of the national and regional chains building new stores, renovating existing locations and experimenting with new formats. But the challenge, for both the retailers and the designers who help develop the concepts, is differentiation. How do you make your experience rewarding enough that shoppers choose you over a growing number of options?

“Everybody’s getting into the food business,” says Sharon Lessard, chief design officer for SuperValu Inc. (Eden Prairie, Minn.), the national supermarket parent whose 2400 stores include the Save-A-Lot, Acme, Albertsons, Cub Foods, Jewel-Osco, Lucky, Hornbacher’s, Farm Fresh, Shaw’s and Star Market nameplates. “You can now get a carton of milk almost anywhere. So what establishes that loyalty, that connectivity, that desire to come into your supermarket?”

Many retailers are responding with a new store layout that reduces the proportion of the store that formerly defined the supermarket: long aisles, linoleum floors, fluorescent lights and runs of gondolas stocked with packaged goods. That commodity part of the store is being condensed, replaced on the perimeter with specialty departments. These new layouts are aimed at making the store visit more pleasant, rewarding and distinctive.

“We recently opened a Wellness Club in our Oakland, Calif., store,” says Gabrielle Rosi, Northern California senior design coordinator for Whole Foods Market (Austin, Texas). The area offers a combination of cooking demonstrations, lunch and dinner clubs, lectures and support for healthy eating education.

Others are adding high-quality fresh food departments: sushi bars, prepared meals, sandwich stations, hot soups, expanded fresh bakeries and coffee kiosks – even beverage counters serving beer or wine where permissible.

“The middle of the store is a commodity,” says SuperValu’s Lessard. “The shopper can get Tide at the drug store or gas station or mass merchandiser or price club, or Amazon might deliver it to her. But she has to begin thinking that for that great cut of meat, or sushi, or potato salad she can get that only from us.”

SuperValu’s stores, which are all over the country, are beginning to specialize in local items, such as Chesapeake chicken in the Baltimore area and seafood dishes in New England. It’s an effort to replicate the old model of the corner butcher or the neighborhood green grocer.

It’s also an opportunity to present something with a visceral appeal, says Ken Pray, director of store design for The Kroger Co. (Cincinnati), the nation’s largest supermarket retailer. “After all, anybody can put stuff on shelves.”

In expanding those perimeter service areas, food retailers are following a logical prescription for profitability. “The middle of the store has become an unattractive place for the retailer,” says Tom Henken, vp, director of design, for Api(+) (Tampa, Fla.), which specializes in food retailing. “Profit margins of goods in the aisles are small compared to specialty items on the perimeter. Food retailers have historically low margins anyway, and they’ve become even tighter because of the economy and all the competition.”

Also, many supermarket chains are building smaller stores, perhaps to emulate the success of Walmart’s 25,000-square-foot Neighborhood Market concept. That trend is forcing them to be more strategic about the allocation of their space and to rethink their role as experts rather than generalists. “It no longer makes sense to try to be all things to all people, packing as many SKUs into the store as possible,” says Juan Romero, president and ceo of Api(+).

One way retailers are zeroing in on individuals’ needs is by using all the digital tools at their disposal to interest shoppers in the store before they even embark on their journey. With all the data supermarkets have collected with every swipe of a shopper’s loyalty card, they now know when she shops, what she buys, the brands she buys, the quantities and how much she spends. And today’s technology allows them to anticipate her shopping journey and help her through it.

“We’ve just launched a mobile app for our Cub Foods brand,” Lessard says. “An individual profile has been created, based on the shopper’s specific buying habits and history, so she can download that app on a weekly basis and get a shopping list and special offers, all specifically catering to her and what we know about her.”

It’s a new customer, shopping for groceries in an entirely different way, not only in the store but even before she leaves the house. That’s part of today’s supermarket experience, too.