Ken Ouimet sat down with Marcia Webb, VP of Retail at Nielsen, at GroceryShop in Las Vegas. The two discussed the new role of fresh in personalization, how variable weight products now account for 75% of deli and produce sales, how health can be a differentiator, and why “data without insights is just overhead.” This is Part 1 of 3 videos of Marcia Webb.
The transcript of their conversation is below:
The role of fresh in personalization
Ken: I really enjoyed your presentation yesterday, it drove home how important fresh was for grocers, and a part that I found really interesting was when you described variable weight products. The best grocers sell more variable weight, and the consumers are asking them for special cuts.
Marcia: Yeah, thank you, we had a full house yesterday and I agree. The random weight actually was an eye-opener for me, and especially because now more sales are coming in the fresh department from deli and from produce, which historically has been meat, so that was a real eye-opener for us which I think highlights how consumer trends are changing–more health and wellness. And random weight is 75% of those sales within deli and produce, so really eye-opening for us as well.
Ken: So if a retailer wants to sell more variable weight, what are the biggest challenges that they have to sell more variable weight items?
Focus on the customer, not the products
Marcia: I think if they start to focus on the product, I think that’s the first problem–they have to stay focused on the consumer. And so the reason I think that random weight is selling more is because it gives the retailer an opportunity to really personalize and make it more about health and wellness and really draw out, what are the characteristics in those products.
The shopping experience vs. the shopping trip
Ken: Your point on focusing on shopping experience versus the shopping trips, could you tell me more about how you’ve seen the shopping experience change in the last ten years?
Marcia: There’s a lot more retailers that are going after restaurants, you see that not only–think about Whole Foods, who has a lot of the hangar restaurants in the store. It’s a lot about what they’re carrying, the full meal experience, but just in also how they make it available in the store. As I talked about yesterday, these top Fresh retailers have 75% of their sales coming from single-serve meals. A lot of grocery stores are focusing on big family meals, but I think the ones that are doing it really well are offering a special service. “Ken, how would you like your chicken prepared and what are the sides you would like?” It’s just all about personalizing the meals, personalizing the deli experience for the customer.
Health as an important differentiator
Ken: Another point you made was about health. What we’re seeing in the stores, we’re seeing more retailers identify health attributes on their shelf tags. We’re also seeing Kroger’s now got a President of Health. Do you see health as being an important differentiator for retailers?
Marcia: Oh absolutely, and I think it’s been that way for a while, but you’re right. Most retailers now are doing shelf tags, whether it’s cruelty-free or gluten-free, and I think that’s a really important way that they can help their customers, and personalize not only what in the deli, within fresh. We talked about the difficulty now for center store, it’s harder, you don’t have the magic produce in the middle of the store that consumers want to touch and feel. But that’s one way to do it, it’s a great way through the shelf tags to personalize the experience for them. And if you’ve got someone that needs gluten-free products, that really is able to help them. That’s something that Nielsen does a lot of, we have a partnership with Label Insights. So it’s not just about what the product says, but it’s about the ingredients in the product. So I think we’ll continue to see that, and I think that’s a great service that retailers provide for consumers.
Ken: Do you see this as we’re early on this journey into health?
Marcia: It varies by retailers. The more advanced retailers have been looking to do it for a while, and have been doing it for a while. But I think it’s getting more complicated–you’ve got some consumers that want cage-free eggs, they want cruelty-free, they’re worried about the environment. I just think consumers nowadays demand more, so it gets harder for the retailers to keep up. The manufacturers do a lot, but again, when you’re in your favorite grocery store you expect them to provide that kind of awareness as well.
Ken: It seems to me that there’s only so much information you can put on a shelf. But as the digital meshes with the physical store, there’s the ability to search and use the digital environment to help point to those products.
Marcia: I think you’re right, you have to be careful not to clutter the shelves and that sort of thing. But I think about–I’m from Atlanta, Kroger does a phenomenal job, every single month they send me a personalized–it’s an envelope that’s filled with coupons. And they’ve started doing it digitally, for about–though–five, six years it’s always been in the mail. And probably 8 out of the 10 items they send me are items that my family buys on a very regular basis, and then there’s probably 2 or 3 items where they’re trying to maybe encourage me to eat healthier or try a new private label item. A lot of retailers do it differently, but a lot of them are very good at personalization in that way.
Ken: Yeah it seems to me, from our perspective, that personalization is the relevance part, to get what’s relevant to the consumer. And some retailers are doing pretty good at that. But the real trick is getting the profitable and the relevance.
Data without insights is overhead
Marcia: You’re absolutely right. So many retailers, some are focused on the personalized promotion, personalized pricing. Some are focused on personalized store experience. There’s just so many different ways that you can personalize, and I think that’s been the struggle as well. There’s so much data but there in terms of point-of-sale data, supply chain data, loyalty data. Data without insights is really overhead, so I think some retailers are really struggling with how to use all that different kind of data, bring it together, personalize for the consumer. And not only personalized in-store, but how are you going to communicate your personalized offers to the consumer. Would you rather–I get mine in the mail from Kroger right now–but with some consumers they’d probably rather have email or text. So it’s finding the right way to deliver the personalized message to the consumer, which can get complex as well.
Ken: I look at how hard it was to get online integrated with the store, they’re still working on it, and now this is just like an explosion.
Marcia: Yeah, it was so much simpler years ago, wasn’t it? Yes, it’s gotten very complicated over the years, for retailers in particular.
Ken: Have you seen that new Whole Foods commercial?
Marcia: In fact, I love that commercial, and I was just saying to my husband–it was probably two nights ago that I saw it. I don’t watch too many commercials nowadays because it seems like I DVR everything, but I happened to be looking down at my computer, working, and then all of a sudden I saw some bright red, green pictures come on-screen and some music playing. And it was actually the produce section when I looked up, which really surprised me. It was showing kale and bright green, red peppers and then I looked up and then a voice came on–it was kind of a seductive voice, and it said, “Have you seen the latest produce section at Whole Foods?”
And then it said, “Isn’t it exciting and beautiful? And it’s about to get more beautiful when you come to the register and see our new, lower prices.” I was actually shocked it was produce, and then the fact that they were mentioning lower prices at Whole Foods. I’d known, obviously I think Whole Foods has had a price perception of being high over the years, and so they obviously recognize that. And they recognize that produce, particularly, for their shoppers is a big draw and destination, and then they transitioned over to, “Come to the register and see our low prices.” So I found that really impactful strategy.
Stay tuned for Parts 2 and 3 of this conversation. You can also watch Ken’s conversation with Jon Springer, Executive Editor of Winsight Grocery, about brand loyalty erosion, privacy vs. personalization, and how Aldi’s efficiencies are keeping Walmart and Amazon on their toes.