Retail Strategies for a Tumultuous World

Threats to independent retailers are omnipresent. But it's not all doom and gloom, as IGA CEO John Ross explained in a session at The NGA Show 2023.

"It's certainly important to be aware of our environment and to try to understand the levers and the drivers that cause us to be where we are because if we don't understand it, we are in fact helpless," Ross said. "But as leaders, we have a responsibility to be in control of our destiny; to take whatever's thrown our way and turn that into something that can turn adversity into prosperity and allow us to re-navigate our businesses in a new way. If we can do that, amazing things happen."

Watch Ross' presentation, Taking Control Of Our Future: Retail Strategies For A Tumultuous World, as he details the advanced resources and strategies that are now available to independents, including affordable digital marketing, merchandising strategies for the modern grocery industry, and recruitment techniques that leverage our stores' best assets.

Key Takeaways:

American Shopper Demographics

Your store's demographics today and in the next 10 years likely look very different from its demographics 30 years ago, and it's important to update your assortment and merchandising accordingly, Ross said.

• Over 42% of Americans identify as multicultural, and there will be more non-white than white children in the U.S. in a decade
  • The increasing diversity of consumers presents an opportunity for growth and innovation in the food industry.
  • For example, international foods are no longer a niche and should be considered a major category.

• The largest constituency of customers is concerned with staying healthy and productive as they age. Eating freshly cooked, healthy food at home is one of the most effective ways to promote wellness, Ross said.
  • Retailers can cater to customers' health concerns by offering in-store nutrition counseling and health checkups.

Pricing & Shopper Trust

Small businesses are the only institution Americans trust nowadays, Ross said. Earn and leverage that trust by demonstrating value to your shoppers. There are several approaches independents can take, which Ross outlined: 

• Use price match guarantees to build shopper confidence and offer the lowest prices on specific items.
  
  • Some international IGA retailers have guaranteed hundreds of items that they will always price match against competitors. These are items they would always price match, so adding a sign with the guarantee simply shows off what they're already doing.
    
    
• "Poor Americans are the least likely to use a discount coupon or rebate of any other segment," Ross said. "For decades, the coupon usage amongst poor Americans has been a third of what it is for middle class. The poorest always pay the most."
  • To address this issue, some retailers have employees automatically sign up anyone using SNAP, WIC, or another public assistance program for the digital coupon programs to ensure they never miss out on deals. 
  • Some retailers will also automatically sign up military families for digital coupons.
    
    
• Load end caps with value-focused meal solutions.
  • "On this end cap, there are three meals that are available with the same set of ingredients so the total cost of the basket doesn't overwhelm you when you rationalize it per meal," Ross said. "That's the problem with recipe marketing — often we call for people to have a full bottle of oil or a full bottle of capers, which adds $2.82 tp $4.50 instantly and you're only going to use a third of the bottle. So the strategy on the end cap and the QR code on the recipe is to say, 'Here's a complete solution so you can feed a family of four for $20 consistently."
  • Need recipe ideas for value-focused meal solutions? Check out IGA's Quarterly Marketing Kit signage and recipes here.

"Every point of communication where technology happens is an opportunity for monetization," Ross said. "Every screen, every time you talk to a consumer is an opportunity to sell them something, whether it's your store policy on your low price guarantee or your freshness guarantee or giving back to your community."

• Retail media networks are the key to competing with national chains and working with national brands. Why? Because they allow advertisers efficiency. Digital media can tell us where the money is flowing and whether an ad actually drove sales. And big brands can quickly and easily place an ad within a retail media network, like those owned by Target, Kroger, Food Network, etc.
  • Independent retailers have access to these networks, too, which allows them to leverage the freely-given data of shoppers in their community and advertise to them for less spend than the old printed circular.
  • "When we see a retailer transition — giving up the old way of large, expensive low-productivity media — and they move to this digital advertising that is informed by real data, they cut thousands of dollars out of their media budgets and their sales go up inevitably over and over and over again."
    
    
• Technology can also incentivize employees to improve sales. Well-trained employees can improve sales and reduce turnover by as much as 200 basis points between stores, according to Ross.
  • Online training available through the IGA Coca-Cola Institute makes education available on-the-go and at the students' convenience, while also gamifying training. By offering badges upon course and learning plan completion, students are more motivated to complete the training and share those completion badges on social media.
  • Labor challenges can be resolved by redirecting low productivity labor towards value-adding tasks.

As Ross said, the grocery business certainly has its challenges, but it's a great industry to be in. "There's an opportunity to serve a growing population that is becoming increasingly diverse. Grocery is a big bet — how cool is that?"