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[16 comments]

FRBuyer: Six Strategies for Independent Grocer Success

December 27, 2012

Through a special arrangement, presented here is a section of a recent article, from Frozen & Refrigerated Buyer magazine.

By Brian Numainville, principal, Retail Feedback Group.

Grocery independents can thrive if they differentiate and win on the local front. Here's a blueprint.

1. Be 'more local' than the competition. Putting a heavy focus on local items shows support of the local economy and may offer high-quality options to national brands. And independents can be more flexible with what they carry and how they promote the items, relative to national chains.

2. Feed the growing interest in diverse tastes. Ethnic diversity, cooking shows featuring foreign cuisines, internationally themed restaurants and travel abroad have heightened interest in ethnic/international items.

3. Serve as the foundation of the local community. According to the 2012 Supermarket Experience Survey from Retail Feedback Group, 28 percent of shoppers report their supermarkets are very involved in supporting the local community. Some 36 percent believe their stores are somewhat involved, but 33 percent don't know. Apparently, some retailers may need to better communicate their efforts to shoppers, especially as more than 80 percent of consumers prefer shopping stores they see as supportive of their communities.

4. Connect with customers on their turf. Like the old corner grocery store, social media lets you connect with customers on a one-to-one basis through tools like Twitter, Facebook and Pinterest. While you may not have much sophistication with tools, it is important to explore how they might fit into your marketing mix along with things like mobile marketing and electronic circulars.

5. Respond to customer needs. Our research shows that only 28 percent of shoppers think there is a customer feedback program at their store, while 61 percent don't know. Finally, 11 percent are sure their store has no feedback program. Yet 85 percent of these shoppers say they would gladly use an online feedback tool or call a free 800 number to provide feedback. Get the word out!

6. Remember the basics — stay in-stock. Supermarket satisfaction among shoppers unable to find all items they had planned to buy on their shopping trip averaged 3.97 on a five-point scale, compared with 4.54 among shoppers who did find all items. This is one area of basic blocking and tackling where independents must shine.

Discussion Questions:

What would be your blueprint for how grocery independents should differentiate themselves? What's missing from the suggestions mentioned in the article?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Of the suggestions mentioned in the article for how grocery independents should differentiate themselves, which one is important but most overlooked?

Comments:

I like the points about listening and service levels. I would add differentiate yourself via selection, expanding on the diversification theme. Be the place where I can find the more unusual or very local products. Indeed, go farther and merchandise those—make sure I know that they exist in your store and are a key element in your mix.

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Dr. Stephen Needel, Managing Partner, Advanced Simulations

Brian's blueprint is comprehensive. My suggestion to independent food retailers is similar to Brian's although perhaps simpler. I suggest that an independent needs to win on the following three attributes: 1. Local (products, community, social media, etc.), 2. Fresh, and 3. Service (delight).

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Richard J. George, Ph.D., Professor of Food Marketing, Haub School of Business, Saint Joseph's University

Brian...good job on the fine points for independent grocers. I would add to this list a few things.

7. Know THY CUSTOMER.... What demographics are you appealing to? In my case, most of them are very poor or struggling to make ends meet (hence the 5 new Dollar stores going up next year). If you deal with this factor, than you must be aggressive on finding great bargains.

8. Keep your relationships very strong with regional suppliers, as the national CPG companies couldn't care less about being fair on giving us a great deal. I do a tremendous amount of business with these guys, and it is a win win for both of us.

9. Watch your SKU assortment and trim down the categories to keep inventory strong where it should be. This can be dairy, meats, and deli-bakery, as these categories are not the strength of the big-box stores. Build up your mix of business around your perimeter of the store to make more profits.

10. Learn from others who have the skills to help, such as the NGA Convention, webinars, and of course RetailWire blogs. Nobody I know became successful all by themselves.

11. Most importantly... Keep your face out in the public, through being a part of organizations that work to promote local business, such as Chamber of Commerce, BNI (awesome), Rotary, and absolutely get involved in the local school system, which can help in hiring the good kids.

Happy New Year to everyone, as 2013 is going to be a real ride!!!

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Tony Orlando, Owner, Tony O's Supermarket & Catering

Local market knowledge, demand creation and intimacy are all critical for independents. My grandfather, a ShopRite Supermarket operator for years, always said, "My job as a retailer is to make it as easy as possible for my customers to buy from me and as hard as possible for them to shop anywhere else." This adage holds especially true for independents.

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Ron Margulis, Managing Director, RAM Communications

Simply giving consumers a compelling reason to come to the store. A reason so strong that consumers look forward to coming because they know they will feel better about themselves by coming to the store.

That means hiring compelling people to interact with customers. At one store I worked at, we had a dairy delivery driver that was so charming, women would pack the store when he came. I have one client that is so charming customers come to specifically interact with him.

Always have something going on every day at the store that draws people and involves the community. A cheerleader car wash, a Lions Club cookout, etc. Know who your very best customers are and make sure you visit their mother in the hospital or nursing home, send cards, and personally deliver a Christmas gift to your top 100 spenders.

David Livingston, Principal, DJL Research

Very good suggestions and a terrific spotlight on the advantages/strengths of independent grocers.

Interestingly, our firm is currently compiling a study for the Healthcare Distribution Management Association (HDMA) about the independent pharmacy segment. Lots of similarities between channels!

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Dave Wendland, Vice President, Hamacher Resource Group

What do your customers want that large retailers with standardized formats and assortments provide, such as more seating for eating in and nutritionists to help consumers prepare special diets? Eliminate some categories such as household cleaners and expand produce with products your consumers want, provide local delivery, etc. Find out what experience, categories, and products your most valuable consumers want and provide it.

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Camille P. Schuster, Ph.D., President, Global Collaborations, Inc.

The thing I love about independent grocers is the personal connection that the staff can bring to the table through knowing and recognizing their regular customers. And independent grocers usually have a different variety of products that cannot be found at larger retail chains and the prepared foods are freshly made on the premises. If I am looking for a specialty item, I will visit an independent grocer, and living in New York City offers a great selection of these grocers.

Independent grocers are great for promoting locally grown or crafted foods; perhaps adding some educational demonstrations, such as how to prepare local produce, would bring even more of a personal touch to the customers.

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Zel Bianco, President, founder and CEO, Interactive Edge

The key to differentiating the independent stores is to discover what they do best or different and exploit it. Whatever that differentiating factor is, be sure that it's important to the customer.

There will be areas you can't compete on. For example, a large box store may have better pricing. If all you do is try to match them, you lose. Be fair priced and then make sure what differentiates you from your competition makes up for the small difference in price. Do you do "local" better? Do you provide better service? Do you have a more convenient location? (Etc.)

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Shep Hyken, Chief Amazement Officer, Shepard Presentations, LLC

Who better to answer this than Tony Orlando? I have read his comments and agree completely. Tony is in the war as an independent. We should listen to him.

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Ed Rosenbaum, CEO, The Customer Service Rainmaker, Rainmaker Solutions

Independent grocers face an amazingly intricate daily challenge. They have to be so good at so many disciplines that I believe they must possess an uncommon breadth of intellect—ranging from people skills to operational logic to financial acumen and beyond.

Keeping a lid on all of this requires a unifying principle that can be consistently applied to every decision, small and large. I submit that principle is shopper success. That is, every action taken by an independent grocer should meet this test: "Does this help my shoppers feel successful when they buy from my store?"

Each of the six points Brian enumerates in his blueprint is well aligned with the principle of shopper success. Implicit in his list is the discipline of active listening. After all, shopkeepers don't decide what success means to shoppers, shoppers tell us through their behaviors and feedback. Grocers must open the channel, listen and continuously apply what they learn to improve shopper outcomes.

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James Tenser, Principal, VSN Strategies

My great grandfather owned a grocery and mercantile store. Interestingly to me is that things haven't changed all that much for the small, indie grocer. It was and is important to know your customers. The big stores know them through analytics but the small stores need to know them personally.

My great grandfather knew when events were coming up and made sure he had what they wanted. How did he know? He talked to his customers. He made sure they knew what was in his store and what they could expect from him. If he couldn't give them the price they wanted, he gave them quality and pointed them to deals in other areas.

The great thing today is that small grocers have so many tools to do all of this with. Social media, text, email, etc. Take advantage of your tools and keep on doing what you've always done!

Lee Kent, Let's meet share and succeed in Retail, YourRetailAuthority

I think the thing that is missing from the list is not falling for the trap of playing the "big guy's" game on pricing. Independents need to leverage what they can leverage and not worry about those things that are only accessible through scale.

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Ryan Mathews, Founder, ceo, Black Monk Consulting

What's missing? Outsourcing certain product categories (such as wine, floral, and coffee) to specialty companies.

Terry Johnson, President, Horticultural Marketing Resources

Basic stuff indeed. Let's simplify even further: Differentiated customer service, inside the store and outside throughout the community. "Premier" checkout lines for larges orders with three staff on those terminals. Why do we strive to service express orders? Participating in community events, etc.

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Ralph Jacobson, Global Consumer Products Industry Marketing Executive, IBM

Product, price, promotion and place. Minimize out of stocks, provide properly priced products that the customer wants to buy. Promote these in a customer service focused environment and communicate your store's availability and offerings on a regular basis. Keep the customer service experience pointed at the "outstanding" level only and focus on making the customer experience the best it can be.

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Kai Clarke, President, Kowa Optimed, Inc.

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