Using Fresh Theater Experiences to Attract & Retain New Customers for Grocery Retail Growth
LET'S KEEP IT SIMPLE
We are in business to satisfy customer needs. The grocery retail industry is going through a period of rapid change. Many of these changes are being driven by demographic shifts, developments in technology, and competition with new, innovative players entering the segment. Some grocery stores choose to compete on price, while others offer premium products and innovative business models.
But let’s keep it simple and focus on the fact that grocery stores are in business to satisfy the consumers’ needs:
- Consumers want fresh and healthy products.
- Consumers want exciting experiences.
- Consumers want amazing taste.
- Consumers want fast simple convenience.
- Consumers want transparency: to know where their products come from.
- Consumers want value for their money.
In addition to the above points, the most recent pandemic experience has accelerated some trends and heightened consumer awareness around health, safety, and hygiene. The consumer demand for convenience along with the increased demand for safety, for example, has driven more on-line retail solutions. This poses new challenges for the traditional grocery retailer.
LET'S KEEP IT SIMPLE
PwC, in their article, Experience is Everything: Here’s How to Get it Right, PwC explains: Give customers a great experience and they’ll buy more, be more loyal and share their experience with friends. The challenge, of course, is getting it right. If you get it right, you can charge a premium. When you get it wrong, you risk losing your customers.
In the below graphic, “The price premium of good customer experience”, we can see that ‘getting it right’ in the coffee segment can allow premium pricing on the average of 16%. Hotels that deliver great experiences can command a premium and get more business. I’m sure we can all think of our favorite café, hotel, or restaurant, and recognize our willingness to pay a premium because we value the product and the experience.
The price premium of good experience | Source: PwC Consumer Research (future-of-cx)
While grocery store shoppers can be highly price-sensitive, we see growth in premium products and growth in new innovative in-store offerings and products. Certain grocery store chains have been able to grow faster than others, while other grocery retailers have continued to shrink, or even go out of business.
The Progressive Grocer highlights continued growth in ‘food service’ in the grocery channel as an attractive growth opportunity with strong development in the deli, salad bar, hot meals, sushi, and a range of prepared foods. According to the National Restaurant Association: 63% Consumers who say they would rather spend money on an experience such as a restaurant or other activity, compared to purchasing an item from a store. The lines separating grocery stores, convenience stores, and restaurants have clearly started to blur, but there are common themes.
The grocery stores that offer outstanding consumer experiences, with in-store food service and innovative products have gained significant market share and have been able to capture premium pricing. The retailers who have failed to offer such experiences and have failed to offer value to their shoppers have suffered.
In their own separate research, E&Y has clearly defined five (5) segments that have their own priorities. Health first is the largest identified segment. “The largest segment of the future US consumer will make choices that protect their health and that of their family before anything else. They will choose brands and products they trust to be safe, and thus transparent.” This is not just about ‘healthy’ – it’s about trust and transparency.
It’s worth noting that ‘Experience first’ is a smaller segment, but it is a segment in its own right. This is a segment that is clearly focused on ‘Experience first’. “These are the consumers likely heading back to the store first. As they look for products and services they feel are made just for them, personalization for this segment will be key.”
Source: E&Y Future Consumer Index
In “The future of fresh”, Deloitte differentiates between ‘Conventional’ and ‘Contemporary’ consumers. “The contemporary consumers’ outsized commitment to the fresh food category is evident in both tangible and intangible ways. Starting with the tangible, they are more willing to pay a premium for fresh food (75% versus 62% for conventional consumers).”
ACCELERATING TRENDS ACROSS THE INDUSTRY
We’ve highlighted some areas of opportunity above. We’re all very aware that consumer behavior changed during COVID. Some key trends were greatly accelerated and some of these trends will continue.
- The dramatic increase in online grocery shopping
- Increased use of foodservice delivery
- Increased use of telemedicine
- The sharp increase in online education
- Accelerated trends with online entertainment
These accelerating trends clearly support both ‘convenience’ as well as ‘safety’. According to Supermarket News, online market share more than doubled with the onset of COVID. There was a major shift in market share and the growth in online grocery is expected to continue.
With the loss of market share to the online channel, the physical brick & mortar retailer will continue to lose in-store foot traffic. Retailers, in general, have to look for ways to drive their business forward and compete in ways that online retailers can’t keep up with… or offer hybrid solutions that leverage their physical and online capabilities.
Source: Supermarket News September 18, 2020, Russell Redman
THE CHALLENGE FOR RETAILERS
The big challenge for the physical retailer is how to compete with online retailers without commoditizing their own products and services. Online retailers have developed their own strengths in developing an online shopping experience. Any retailer wanting to compete online has to be prepared to compete not only on price but also on user experience.
If a grocery retailer is offering online options, then they must also determine how to best integrate their online offerings with their brick & mortar strategy to deliver outstanding quality and exciting positive experiences. The overall user experience has to support the retailer’s brand and keep the customer coming back for repeat shopping experiences: physical or virtual.
In their 2019 (pre-COVID) research, Deloitte highlighted that Produce accounts for approximately 60% of Perimeter growth, with the other segments Bakery (19%), Deli (15%), and Meat (6%) driving the rest of growth.
The freshest products, quality in-person service, and theater experiences attract in-store foot traffic. These offerings are hard, if even possible, for on-line retailers to compete with. The best way for brick & mortar retailers to differentiate themselves from on-line retailers, without competing solely on price, is to offer positive in-store experiences virtual retailers simply can’t offer.
Innovation and creativity are required to offer new in-store experiences that can deliver quality and excitement while still being efficient and profitable for the retailer. The “Perimeter” of the grocery store, as opposed to ‘Center store’ is a key area for retailers to look to for innovative projects.
Retailers should look for high return projects that support a ‘fresh image’ to attract more customers into their stores, support their brand messaging and drive growth.
Source: Deloitte – Future of Fresh: Perimeter Growth
THINKING ABOUT SOLUTIONS
Here are some questions retailers might consider when contemplating the industry:
- Can retailers offer freshness that on-line retailers can’t offer?
- Can physical locations offer ‘food theater’ experiences that are only available in-store and in-person?
- What products and services can physical locations offer that enhance the user experience?
- How can physical retail locations increase the convenience of the shopping experience?
- What experiences can the grocery retailer offer to enhance the overall experience and keep the consumer coming back for more store visits?
There are many different ideas and strategies to further develop the Perimeter in a grocery store. Citrus America believes that fresh in-store citrus juicing can be a highly attractive solution for both the consumer and the retailer. We offer solutions that are based on the right equipment and the right strategies. We help retailers generate a ‘theater experience’ with fresh juicing.
THE IN-STORE FRESH CITRUS JUICING EXPERIENCE
A fresh in-store citrus juicing experience creates ‘fresh theater’ to address some of the most exciting trends in grocery retail and foodservice today. If properly planned out and implemented an in-store juicing experience can offer extremely high revenue and gross profits per square foot while generating customer excitement around a unique offering.
Theater citrus juicing can provide an amazing visual experience: watching juice get squeezed from the oranges. In addition, juicing produces some amazing citrus aromas giving the area a fresh citrus smell. Finally, the customer can buy the freshly squeezed orange juice immediately after it’s been juiced, or at least on the same day, and experience some incredible flavor profiles that only come from fresh citrus.
Freshly squeezed orange juice is something that Mother Nature produces and no factory, no brand, no bottler has been able to copy. All-natural, freshly squeezed orange juice tastes amazing and delivers a unique flavor experience. Click HERE to learn why freshly squeezed orange juice tastes so good.
Citrocasa 8000SB-ATS Citrus Juicer with Peripherals
EFFICIENCY & SAFETY USING AN AUTOMATIC JUICER
It’s been our experience, based on direct customer feedback, that consumers coming into the grocery store to buy fresh citrus juice also buy other products. They fill their shopping cart with products which tend to be high quality products. The fresh juice buyer tends to come into the store more frequently to replenish their fresh juice at home. There are also fresh juice consumers who buy smaller portions for immediate consumption to accompany a healthy meal or snack.
While it’s critically important that a fresh juice program drives its own attractive ROI (CLICK HERE FOR ROI DISCUSSION PAPER), it’s even more important that the in-store fresh juice experience supports the retailer’s brand, attracts consumers that are on-target for the retailer, and helps drive more in-store foot traffic.
Once consumers start tasting high-quality, freshly squeezed orange juice they will become familiar with the real taste of freshly squeezed citrus juices. As discussed in other blogs (Why Does Freshly Squeezed Orange Juice Taste So Good) no factory-produced juices can replicate this flavor.
In addition, recent market developments have increased consumer desire to have more transparency into the products they consume. For grocery stores that choose to offer it, a self-service juicing option is the ultimate in ingredient transparency, with the consumer actually being able to activate the juicer and fill their own bottle with 100% pure and fresh orange juice squeezed right before their very eyes.
FRESH CITRUS JUICING PROGRAMS THAT DRIVE EXCITEMENT & PROFITS
It’s very exciting launching a new juicing program at a retail location. Citrus America has been involved in quite a few in-store trainings and program launches. Consumers have a lot of questions about fresh and natural juices. Seeing their eyes light up when they taste fresh juice is a very rewarding experience.
Watching children and teenagers discover the juicer is fun. It’s fun to see others having fun.
Sampling freshly squeezed orange juice evokes different responses. Some people are amazed to learn that nothing is added, but freshly pressed orange juice simply just tastes that good. Some people get nostalgic about their grandparents or parents having used to make them freshly squeezed juice.
Self-Service Juicing: One of our top selling products over the past decade has been self-service juicing solutions in the retail environment. The combination of a self-service juicer, set up with the right peripherals can offer a consumer-facing juicer that delivers the freshest, best tasting orange juice possible. Consumers who demand the ultimate in transparency, freshness, and experience love going to the stores that offer this type of solution.
Staff-Operated Juicing: We have a lot of retail customers that choose to have their own staff squeeze juice on a daily basis. Some grocery stores even set up multiple units and offer staff-operated juicing on-demand with a variety of juices available at the same time: orange juice, grapefruit juice, and lime juice, for example. The juicers are placed in a location that the consumer can see their juices being produced and bottled directly and placed into crushed ice or glass display coolers.
Hybrid Solutions: There are different variations of the two strategies discussed above. We support our customers in developing the right solutions that fit their needs. The solution is often a hybrid solution with staff preparing some specialty juices, then cleaning up the juicer for self-service orange juicing on demand throughout the day.
No matter which juicing strategy a retailer selects, it’s extremely important to select equipment that makes juicing fast, efficient, and safe. Furthermore, program reliability is critical. The consumer will come to rely on fresh juice being available in-store every day, therefore, retailers need to be able to rely on their equipment and support partners for a healthy juicing program.
An in-store freshly squeezed orange juice program delivers results on so many levels. Here’s a quick summary:
- It’s an in-store, on-demand theater-like experience delivering visual, olfactory, and taste experience
- The taste is absolutely unique and can’t be replicated by factory-produced juice
- The consumer can trigger the juicing themselves or ask staff for freshly made product
- It’s an extremely healthy product delivering vitamins and micro-nutrients
- It’s an all-natural product with no preservatives or additives
- It’s highly profitable and supports in-store foot traffic and repeat business
- The process and ingredients are incredibly transparent
A 10-POINT CHECKLIST ON DEVELOPING IN-STORE GROCERY EXPERIENCES
- Visual Experience/Theater Effect
- Olfactory Experience (aroma)
- Taste Experience
- User Experience/Activity
- Attractive In-Store Design & Merchandising
- Ultimate in Transparency
- Healthy and Natural Products
- Generates In-store Frequency
- Drives Incremental Revenues and Profits
- Supports Overall Brand Image
An in-store fresh juicing program can deliver a consumer experience that helps drive profitable foot traffic to your grocery store for growth. This is a great way to attract and retain new customers while continuing to impress your existing customer base with a new and exciting product offering.
About Citrus America: Citrus America has been driving innovation and quality in the juicing segment for more than a decade in North America and the Caribbean. We’re the exclusive master distributor for Citrocasa and have driven many innovations and quality improvements in juicing equipment. In addition to equipment solutions, we provide tailored training and support strategies to help our customers earn Healthy Profits.