George Latella, visiting professor of food marketing at Saint Joseph’s University, discusses the role of technology in food retailing.
Grocery Headquarters: Is it fair to say that the supermarket of the future will be marketed and merchandised differently than today?
George Latella: No question about it. We went from corner stores to supermarkets, to superstores. However, when you take a look at some recent success stories in food marketing—Whole Foods, Trader Joe’s, Aldi, Save-A-Lot, Bottom Dollar, Dollar General and Dollar Tree—each of these retailers has been able take a chunk of food business away from the giants, including Walmart. They are all small stores that focus on specific audiences and take different approaches to merchandising, but are very successful.
What are the digital opportunities for retailers?
Clearly, they can communicate in real time and on a truly one-to-one basis with consumers. I took a group of our food marketing students to the National Grocers Association show this year to compete in a competition. The topic was how independent grocers can use mobile coupons. Our students identified three opportunities to retailers to drive sales of perimeter items, where independents can still differentiate and win against their larger competitors.
They focused on Gen Y, as they felt they were the most likely to adopt the new digital technology and also provide an opportunity for retailers to connect with a generation of consumers that will decide who stays, who goes and how we solve their food procurement problems over the next 10 years.
Where are the best opportunities for increased sales?
Digital provides opportunities to target almost anything—specific stores, specific customers, day parts, slow sales days, breaking news and even weather. But retailers need to have a social media plan.
They need have the internal resources in place to react quickly. For example, just having Twitter and Facebook pages with no social media plan is worse than not having them at all. Savvy social media users will see right through that. They need to train their store associates in proper social media protocol and turn them loose. When a customer complains on Facebook or Twitter, they now have the opportunity to satisfy the customer—or blow it—in front of everyone.
So what is the best way to reach out to consumers?
Back in the day, we used to talk about the role of advertising being to “inform, persuade and remind,” or “stop, compel and engage.” I like to use the phrase “think, feel and do.” It doesn’t matter what medium we use to deliver the message, the goal is still to develop a position that is clear, distinct and desirable with the customer.
While I fully expect digital to continue to be the vehicle of choice, let’s not bury print yet. Just take a look at all of the catalogues we got just this past Christmas. Do you think the people at Victoria’s Secret, Omaha Steaks, Hickory Farms and the like want to “waste” money on print? Of course the answer is no.
I have measured the results of using both digital and print and across most businesses that the highest sales increases come from a combination of digital and print. Just doing digital or just doing traditional direct mail does not produce the same results.
The challenge for retailers that rely on traditional print marketing is to identify those customers (think the Greatest Generation) who may never own a computer or smartphone. But I bet they have store cards for their favorite retailers. This group wants to have that circular every week. If we can identify these people, we can direct mail the circular to their house and significantly reduce our cost to print.c
Saint Joseph’s University in Philadelphia is celebrating the 50th anniversary of the food marketing program, which is also the largest major in the school. George Latella can be reached at firstname.lastname@example.org.