4 Compelling Trends That Are Key to Optimizing Profit Potential
“That's how much the average U.S. consumer spends each year on impulse buys, according to a new survey by Slickdeals.net,” and “most of these spur-of-the-moment outlays go toward food, with 70.5 percent of respondents saying that category was the major culprit.” (CNBC, February 2018.)
Not surprising. Consumers are busier than ever and conditioned to have high on-demand expectations. They can’t be bothered with strategizing mundane decisions like what to eat for breakfast.
That said, the impulse buy has become anything but automatic. These busy consumers are also more complicated and food merchandising has to account for that.
Here are four other undercurrent trends that should impact food merchandising decisions in the effort to optimize sales and profit potential.
1. Fresh Has Changed the Game
The trend toward fresher, healthier foods in c-stores was one of the primary drivers of sales growth during the first half of 2018.
According to Convenience Store News, 79% of c-store retailers saw increased sales during that time, with many of the surveyed operators saying they added or expanded their healthy and fresh food options specifically for that reason.
Even more telling, c-stores in the top quartile of the industry sell three times as much prepared foods as those in the bottom quartile—no doubt because consumers now rank “food quality” as what they value most in a c-store.
Of course, it’s not all about sales. Fresher, healthier also demands a greater investment—in labor, ingredients and space.
Obviously, the labor and space issues have made merchandising necessary since c-stores began decades ago. They’re integral to the c-store model.
But maximizing return on this increased investment in prepared foods calls for smarter, often, more upscale food merchandising solutions that:
- Truly showcase prepared foods to emphasize their freshness.
- Reflect a broader store image that, together with number 1, justifies the premium price.
- In a more practical sense, include features to extend the shelf-life presentation of these prepared foods—such as, say, an onboard humidifier for fresh baked goods.
2. C-Store Shopping Frequency Is Declining
Yes, for now, sales are up, according to Convenience Store News.
But that same authority also notes that c-store “trip frequency is down 28% since 2014, (and) likely to continue,” placing greater importance on increasing per-trip basket size—which, inevitably, comes down to the impulse buy.
Given that c-store shoppers spend less than three minutes inside the building, merchandisers have to be more than a shelving unit. And, for higher-margin prepared foods, especially, they have to be attractive unto themselves.
That translates into merchandisers built with functionality and design—such that they intentionally maximize visibility, add accent lighting where appropriate, or include graphics that can capture attention in a sea of products.
It can also mean design that optimizes high-dollar real estate like the checkout area that sees the most foot traffic and dwell time during these less frequent, three-minute visits.
3. Labor Continues to Be a Problem
For c-store and other foodservice operators especially, the labor crisis is no secret.
All this to say that food merchandising, as a linchpin in the c-store model, has to work harder than ever.
In tandem with the rising consumer demand for more—and more diverse—fresh-food options, operators already seeing their workforce stretched to the limit have to specify merchandising solutions that, again, extend shelf life and maintain optimum food presentation.
And, to the point about turnover, simplicity is critical, as a means of minimizing the need for training.
4. Transparency Is Impacting Everything
Most anyone in foodservice knows about the rising consumer demand for transparency in the food industry. According to a study by Label Insight, 94% of consumers say it matters to them that food manufacturers and brands are open about their food’s ingredients and production processes.
At root, the demand for transparency is about trust.
Building that trust should be a part of the entire customer experience. In this regard, c-stores and other food retailers have the opportunity to increase transparency in a much larger, more literal sense: through smarter store design.
Labeling it the “Inside-Out” trend, design:retail magazine explains it this way:
“When you cover the windows from floor to ceiling with promotional posters, the store actually repels customers. Contemporary c-store designs offer unobstructed views through oversized windows. The idea is to look appealing both from the roadway and the threshold.”
C-stores that take the inside-out approach have better curb appeal because of a higher perceived trustworthiness. Their transparent design—achieved through good lighting, oversized windows and unobstructed views—has a welcoming psychological effect on customers.
The same theory works at the food level, inside the store.
By incorporating the same hallmarks of a transparent design into their food merchandising, operators not only stimulate customers’ appetites, but they also build trust. And, by virtue of preserving food presentation and quality, merchandisers also cut down on excessive food packaging, thereby putting fewer barriers between your customers and your best sale items.