The senior vice president, North America sales, for Campbell Soup Co. outlines the company’s strategy to help rejuvenate the center store.
Tim Hassett: Most of us in the industry would agree that center store is not healthy. The reality is that center store sales have been steadily declining over the past few years; in the past 12 months, sales have declined by nearly 3% compared to the prior year. According to Nielsen, in the grocery channel alone, the lack of center store innovation has resulted in lost trips, which translates to a missed opportunity of $23 billion. The percentage of shoppers who shop primarily the center store dropped 1%, while we are seeing higher percentages of customers shopping primarily the perimeter.
Revitalizing center store is not an impossible task. At Campbell, we believe that turning around center store will require a combination of insights along the path to purchase, innovative new products and affordable meal solutions and integrated marketing.
First, let’s talk about insights. For years, retailers built their shopper strategies based on the fact that most purchase decisions were made in store. However, our most recent award-winning path to purchase study tells us quite the opposite: 80% of decisions are made outside of the store. We are challenging retailers to think more holistically about how they can maximize their opportunities to influence shoppers.
Second, focusing on providing innovative meal solutions continues to make strategic sense. Non-traditional families and new consumer segments are looking for retailers to help them find ideas to make simple, convenient, nutritious and delicious meals. Campbell is expanding its existing portfolio of affordable simple meals and this innovation will be critical to bringing vibrancy back to the center store.
Finally, bringing insights to life through activation has been part of Campbell’s customer value proposition for a long time and we continue to deliver on our promise. We spend nearly double the industry average on consumer marketing, significantly contributing to the growth of the categories we play in.
What is Campbell introducing this year?
Consumer preferences continue to shape our innovation pipeline. For several years, Campbell’s new items evolved around health and wellness efforts, particularly focused on sodium requirements. This coming fiscal year, we are broadening our efforts to launch products that will appeal to new consumer segments and respond to new drivers of consumer choice.
Campbell will launch more than 80 new soups, sauces, beverages and snacks, including 30 new soup items for the fall soup season. You will see Campbell engage and grow with increasingly important demographic groups, such as Hispanic and Millennial shoppers.
How will these products make a difference to retailers and consumers?
We are partnering with retailers to bring new shoppers into store aisles. Campbell’s complementary and versatile products are driving meal solutions that connect center store to the perimeter.
How are you supporting these products?
Consistent with our research that suggests we must reach consumers during all phases of the path to purchase, we plan to interact with consumers in the living, planning, shopping and experiencing stages. We will use an integrated approach, deploying a mix of promotional and educational tools, including advertising, consumer promotion, and shopper marketing tactics. In some cases, you will see us use creative and new approaches to engage consumers with digital, online and non-traditional advertising strategies.
What does the future look like?
For the first time in many years, I am optimistic about the future of center store. Retailers and manufacturers are using technology to intercept the shopper at point of purchase. They also are providing simple meal solutions—critical for time-starved families and small households alike. Finally, new developments are capturing the hearts, minds and wallets of the diverse shopper profiles.
Manufacturers and retailers have a joint responsibility in revitalizing center store. Campbell is taking this responsibility to heart by significantly revamping its product offering, providing retailers with unmatched integrated shopper marketing capabilities as well as insights that will shape their strategic efforts.