Strategic Merchandising: Who, What Drives Consumption

Don Harris - Retail Perspective

All good retail produce executives are acutely aware of the status of their local marketplaces. With the summer selling season approaching, now is a good time to review data concerning your marketplace and elevate your department to the next level.

Oftentimes, upper management believes this exercise is unnecessary, citing that produce is not an exact science and does not work well within the framework of targeted planning much less specialized strategies. Management’s experience is limited in most cases to other less complex departments that perform well with standard, data-driven models. This is another example of how upper management “just doesn’t get it!”

Reviewing and preparing a strategic, overarching plan is the basis of a successful produce operation. However, innovative produce executives don’t stop with a standard, full-market vision. They formulate specific merchandising plans for subsets of stores and even individual stores, culling all available data from the target area to capitalize on opportunies within those stores.

There are several key areas that drive consumer behavior. To determine them, one must utilize all demographic information available. Within that wide range of categories, here are three key ones that offer tremendous opportunities throughout various neighborhoods and in individual locations:

  1. Level of education is the first critical and revealing data to look at. It might also be the most important indicator. Many studies have shown that the level of education affects consumption far more than measurements of income. Highly educated consumers tend to consume more produce and are open to sampling a wider variety of items. To take advantage of this, the location of these consumers must be highlighted and merchandising plans adjusted to take advantage of their wants and desires for top-quality produce.
  2. The ethnic makeup of your location also can provide big opportunities to increase sales. Targeting certain produce items that appeal to various ethnic groups in neighborhoods or stores unlocks the potential of additional consumption. The number of these ethnic groups varies widely across the country and may include many different groups within your operation. The key is to know where these groups are and what are their preferences for varieties of produce. Preparing complete lists of ethnic groups and their produce preferences will pay big dividends when planning your strategy.
  3. Knowing the age and generations (Baby Boomer, Gen X, Millennials, for example) of your consumers also can be a huge benefit. The age of those who live in your area always affects their levels of consumption, and the generation that these ages represent also provides many clues as to their expectations of the produce that they want to purchase. The data in this group can be broken down into large groups or individual ages and analyzed in order to fit the various neighborhoods, regions or locations. Age and generations can be as defining as any of the other key areas mentioned.

The key to creating a dynamic strategic merchandising program is to combine all the above factors into individual programs for specific locations, neighborhoods or regions you have identified. This activity will formulate numerous merchandising plans that will require additional effort to maintain and update. This effort will be more than offset by the opportunity for increased consumption. Just imagine the impact in each of your locations of a merchandising program that takes advantage of the demographics and provides the wants and needs of all the consumers in this specific area.

It’s not the easiest course of action and requires an involved analysis, inventive schematic(s), and precise execution to be successful. But the track record of those innovative retailers that have taken this course proves it is the next level of merchandising. With the advent of the summer selling season in produce, with its bounty of items, what better time than now to elevate your operation to a superior level of strategic merchandising.

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