HOW TO MAKE THE MOST OF INCREASING ASSORTMENT IN FRESH
MAY 2013 | View as PDF
As consumers continue to place greater importance on fresh, retailers are faced with the challenge of limited space for fresh in their stores. The increased demand for fresh products across all departments is fueling supplier innovation and proliferation of items competing for finite space. Smart retailers are looking for new ways to maximize the opportunity this high demand presents – so how are they making the most of their store space? Strategies involving seasonality, innovation and localized store assortment play key roles, all of which depend on a thorough understanding of the consumer.
Innovation and global sourcing have changed consumers’ perceptions of seasonality within the produce department. Produce sales were historically driven by crop supply; however, farming innovations and imported produce over the past decade have made many fruits and vegetables available 52 weeks a year, allowing retailers to seize the opportunity to extend demand for an item outside of what the consumers perceive the traditional season to be. Watermelon is a prime example of an expanding perception of seasonality. A decade ago, consumers could only purchase large watermelons and only during the summertime. Innovations around personal-sized melons and greater availability of pre-cut watermelon have made the summertime favorite available in any store year-round. Yet consumers still follow the traditional pattern of purchasing larger watermelons during the peak summer months. In an analysis of the highest selling watermelon varieties, whole melons lead sales between the months of April and September, while value-added watermelon options outsell whole melons between October and March. By carrying new varieties of watermelon and emphasizing different options throughout the year, retailers can emphasize the large whole melons that are historically associated with summer months, but also extend sales into winter months with sliced and packaged options of equal quality and value (and often higher price points).
The produce department has the greatest variation in unique items sold throughout the year.
Impressions = Number of unique items sold in a given store and week.
Source: Nielsen Perishables Group FreshFacts®
Another strategy to maximize sales opportunities is to tailor stores’ fresh assortment based on customer demographics within a given neighborhood. Chicken drives $8.5 billion in sales across the U.S. in a year, but the category has a wide variety of cuts and price points that appeal to very different demographics. By thoroughly understanding a given store’s shopper demographics, retailers can cater chicken assortment to match consumer preferences and optimize sales for the category. When weighing sales volume in conjunction with the trading area at each store, we find boneless, skinless chicken breast sales index highest in affluent, college educated areas and won’t necessarily sell as well in a low income neighborhood. In contrast, chicken drums are most often purchased by minority consumers with large families and a lower education level, and should be well stocked in stores with shoppers that fit this demographic. By focusing on demographic purchase preferences, retailers can create strategic product emphases that will boost sales by offering exactly what core shoppers are looking for.
The continually increasing assortment in fresh products is both a reaction and driver of fresh’s growth over the past decade. Rather than overwhelming shoppers with crowded shelves, make the most of each category by understanding buyer demographics as well as their purchase patterns.