December 15, 2008
R&FF Retailer: Merchandising in a Recession
By Warren
Thayer, Editorial Director
Through
a special arrangement, presented here for discussion are excerpts of a
current article from Refrigerated & Frozen Foods Retailer magazine.
How are shopper habits
changing, and what new strategies should you be implementing to protect
and even grow your share of frozen and refrigerated foods in these tough
times? For answers to these questions, we went to Thom Blischok, president
of consulting and innovation for Information Resources, Inc., the Chicago-based
marketing firm.
R&FFR: What
are some key trends affecting refrigerated and frozen food consumers,
especially in today’s rough economy?
Mr. Blischok: In
terms of food offerings, the key trend for retailers to understand is that
we have to move from availability to affordability. It’s becoming less
about stocking everything and more about stocking what shoppers can afford.
The 60 percent of households making less than $55,000 per year are totally
redefining how they eat. They’ve lost the equivalent of about $4,000 in
buying power over the last year, and they really have to find ways to stretch
their food dollar.
R&FFR: What can retailers do about
all this in their frozen and refrigerated departments?
Mr. Blischok: Maybe
they should focus less on traditional categories, and more on merchandising affordable
meals. Right now there is opportunity to rethink what frozen displays look
like. Think like a shopper: ‘How can I get a frozen meal for four for under
$15?’ That sort of concept will be a real winner in the marketplace, but
it will require you to display meals differently.
R&FFR: In
what ways?
Mr. Blischok: By creating frozen food displays
by meal components rather than by just categories or prepared meals. You
might want to have chicken breasts next to frozen vegetables, next to frozen
potatoes, next to a dessert. Think about putting together simple meals
inside the display cases, and especially in endcaps. The tradeoff, of course,
is that it’s not necessarily what the manufacturer wants, or what the retailer
wants, but it’s how consumers buy. Consumers right now are afraid, they’re
hesitating.
R&FFR: What’s lacking here, and
how can we fix it?
Mr. Blischok: What I don’t see in frozen and dairy
is story-telling. You have packages with pictures, but nothing to tell
you ‘Can I afford this? Is it nutritious? How can I combine a few
items to make several meals?’ You might set the case for a Mexican
fiesta, where the shopper can mix and match five items and do dinner for
$15 for a family of four…You could even have a section for ‘affordable
indulgences,’ like single-serve ice cream or desserts to help the shopper
see that you are thinking about their needs and saving them money. The
frozen department can pull this together better than people might think.
Frozen, in the eyes of many consumers, is essentially equivalent to fresh.
Retailers need to understand that consumers will accept frozen foods today
and actually see some affordability advantages in the department. Frozen
foods can be of equal ‘freshness,’ be more affordable on a cost
per-ounce, offer portion control and have a long shelf life.
Discussion Questions:
How can frozen food sections better promote the “affordability”
message to consumers? What merchandising and marketing opportunities are
being missed in the frozen department?
[Author’s
commentary] This article is based on interviews with Thom Blischok, and “Tough
Times Create a Revival of the Dining Room,” a report he authored for
Information Resources, Inc. For a copy of that report, e-mail a request
to thayerw@bnpmedia.com.
BrainTrust
Recent Discussions
Discussion Questions
Poll
The most economical meals rarely come from the frozen food section. And freezing doesn’t improve most foods, except ice cream. For the grocer, the energy and depreciation costs are major. The margins aren’t very high. So if you’re concerned about the recession, why push frozen food?
Good opportunity to not only show it’s affordable but with less waste and good taste, too! Really boost the chance for success here with in-store promotion and sampling. Add suggestions on how to use different frozen mains, with vegetable or other sides, then sample at peak times. Place near the produce area, cross merchandise with a simple salad, maybe? Why not show easy menus, benefits–feed 4 for $15 in just 20 minutes…and then sample? Follow up on web sites, and with in-store flyers. For busy, time stressed and cash-conscious shoppers, the suggestions could be very welcome in the days ahead.
Thom provides several good insights here. Too often, frozen food cases suffer from merchandising without imagination. The aisle is sterile, organized like a reference library, and immediacy of any product message is metaphorically and actually filtered through the glass doors.
The notion of adding meal concepts to frozen foods merchandising is important, but will require some art to carry off. The aisle seems dominated by fully-prepared items. But it’s the frozen ingredient items–especially items like vegetables, fruits, pastry dough–that really offer the value potential in meals. A sack of top-quality frozen green beans or berries can really deliver in this regard, and they keep for months at home–even after the package is opened. Nothing in the fresh aisle can compare with that.
I’d add that the aisle itself needs an upgrade. Lately I’ve seen some very appealing-looking frozen cases in new stores that feature black door frames and shelving illuminated with LED lighting. The combination makes product labels really “pop,” reducing the psychological barrier of the glass. I’d also propose the addition of small digital screens to aisle that play usage suggestions and offers.
In sum, communication and education remain the key issues in frozen foods merchandising. At the moment there’s a great value story to tell–especially to Food Channel devotees who want to actually cook their dinners.
Frozen is about no waste and convenience. Consumers waste between 25-30% of the food they buy. Resealable frozen can reduce this percentage, making the dollar stretch further. This is one of the most important messages for the consumer in this economy. However, consumers are often accustomed to giving up convenience in order to pursue thrift.
If it was my frozen business, my message would be: be smart about your food dollar, without sacrificing convenience.
I think Mr. Blischok says it all in the phrase on moving from availability to affordability. And the issue just doesn’t pertain to frozen. It’s a store-wide issue, and every department needs to participate in a coordinated, coherent program of offering value to the consumer in the context of cash-strapped, budget-stretching consumers. For retailers, this is a huge opportunity not only to be really relevant to their customers, but to also develop a strategy for prevailing in the current economic climate. Consumers are seeking meal solutions with an economic purpose as opposed to a time and convenience purpose. One of the biggest opportunities lies in cross-department promotions, to provide customer, and retailer, benefits across the store. Private label, already a big winner in this economy, could become even more important, and impactful, with further promotion. A comprehensive, total-store strategy can be a huge win for everyone.
Many of the ideas suggested here have proven successful in the fresh categories. Using results from my holiday food expert experiment, merchandising all the components for one meal prompted the customer to purchase all the items at once. We saw bigger baskets and greater sales in those individual skus.
On the street, comments from customers would indicate they felt they were saving considerably when buying the whole package. Therein lies the value proposition that consumers are looking for. I believe it could have greater success in the freezer case. Ultimately it will depend on the merchandising.
I agree with the author that frozen packaging is somewhat sterile. Loblaws has created a line of frozen Asian dishes and package them similar to what you would see in a Chinese restaurant. There is a an appetizer, a main and a side dish, each labeled as such. Customers pick and choose what they want and it all equals much less than what it would cost in a restaurant. There is demand for these all-in-one meals and I would suggest expanding the category and even offer different quality levels within the category itself. It is also important to sign the sections properly. Customers must know how much they are saving. Strong POP is needed throughout the store to build that feeling of value.
Great ideas on merchandising frozen food products and way overdue! Might need different shelves to pull it all together but it applies lessons based on successful retail merchandising.
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The most economical meals rarely come from the frozen food section. And freezing doesn’t improve most foods, except ice cream. For the grocer, the energy and depreciation costs are major. The margins aren’t very high. So if you’re concerned about the recession, why push frozen food?
Good opportunity to not only show it’s affordable but with less waste and good taste, too! Really boost the chance for success here with in-store promotion and sampling. Add suggestions on how to use different frozen mains, with vegetable or other sides, then sample at peak times. Place near the produce area, cross merchandise with a simple salad, maybe? Why not show easy menus, benefits–feed 4 for $15 in just 20 minutes…and then sample? Follow up on web sites, and with in-store flyers. For busy, time stressed and cash-conscious shoppers, the suggestions could be very welcome in the days ahead.
Thom provides several good insights here. Too often, frozen food cases suffer from merchandising without imagination. The aisle is sterile, organized like a reference library, and immediacy of any product message is metaphorically and actually filtered through the glass doors.
The notion of adding meal concepts to frozen foods merchandising is important, but will require some art to carry off. The aisle seems dominated by fully-prepared items. But it’s the frozen ingredient items–especially items like vegetables, fruits, pastry dough–that really offer the value potential in meals. A sack of top-quality frozen green beans or berries can really deliver in this regard, and they keep for months at home–even after the package is opened. Nothing in the fresh aisle can compare with that.
I’d add that the aisle itself needs an upgrade. Lately I’ve seen some very appealing-looking frozen cases in new stores that feature black door frames and shelving illuminated with LED lighting. The combination makes product labels really “pop,” reducing the psychological barrier of the glass. I’d also propose the addition of small digital screens to aisle that play usage suggestions and offers.
In sum, communication and education remain the key issues in frozen foods merchandising. At the moment there’s a great value story to tell–especially to Food Channel devotees who want to actually cook their dinners.
Frozen is about no waste and convenience. Consumers waste between 25-30% of the food they buy. Resealable frozen can reduce this percentage, making the dollar stretch further. This is one of the most important messages for the consumer in this economy. However, consumers are often accustomed to giving up convenience in order to pursue thrift.
If it was my frozen business, my message would be: be smart about your food dollar, without sacrificing convenience.
I think Mr. Blischok says it all in the phrase on moving from availability to affordability. And the issue just doesn’t pertain to frozen. It’s a store-wide issue, and every department needs to participate in a coordinated, coherent program of offering value to the consumer in the context of cash-strapped, budget-stretching consumers. For retailers, this is a huge opportunity not only to be really relevant to their customers, but to also develop a strategy for prevailing in the current economic climate. Consumers are seeking meal solutions with an economic purpose as opposed to a time and convenience purpose. One of the biggest opportunities lies in cross-department promotions, to provide customer, and retailer, benefits across the store. Private label, already a big winner in this economy, could become even more important, and impactful, with further promotion. A comprehensive, total-store strategy can be a huge win for everyone.
Many of the ideas suggested here have proven successful in the fresh categories. Using results from my holiday food expert experiment, merchandising all the components for one meal prompted the customer to purchase all the items at once. We saw bigger baskets and greater sales in those individual skus.
On the street, comments from customers would indicate they felt they were saving considerably when buying the whole package. Therein lies the value proposition that consumers are looking for. I believe it could have greater success in the freezer case. Ultimately it will depend on the merchandising.
I agree with the author that frozen packaging is somewhat sterile. Loblaws has created a line of frozen Asian dishes and package them similar to what you would see in a Chinese restaurant. There is a an appetizer, a main and a side dish, each labeled as such. Customers pick and choose what they want and it all equals much less than what it would cost in a restaurant. There is demand for these all-in-one meals and I would suggest expanding the category and even offer different quality levels within the category itself. It is also important to sign the sections properly. Customers must know how much they are saving. Strong POP is needed throughout the store to build that feeling of value.
Great ideas on merchandising frozen food products and way overdue! Might need different shelves to pull it all together but it applies lessons based on successful retail merchandising.