In his recent article for Winsight Grocery Business, Jon Springer reports that the coronavirus pandemic is delivering billions in new sales for U.S. food retailers. But there’s a catch. He writes, “They need to accept that bounty delicately, keeping an eye on the effects of rising costs, changes in consumer buying behavior, and their near- and longer-term perception in the marketplace.”
This is a golden opportunity for retailers to embrace their role as community nourishers and gain long-term loyalty.Jon Springer, Executive Editor at Winsight Grocery Business
The Key Takeaways from this article are:
1. The nature of promotion has abruptly changed (albeit temporarily) from transactional to emotional. It’s a change of promotional tone from ‘Hurry to our store, we’ve got wonderful deals.’ to ‘We’re all in this together. We’re here to help you in this difficult time.’
2. While increased demand and a strained supply chain can tempt retailers not to offer better prices, a shopper’s perspective can range from: ‘Who are you to be trying to promote things? I’m just trying to feed my family’ to ‘I don’t have a job, and you’re taking away all your deals.’
3. Retailers have to balance their timing: “When the infectious rate and the mortality rate plummets this week, that means more normal shopping behaviors will begin next week,” said Sterneckert of Symphony RetailAI.
4. Communicate the why and how. Wyker of Circular Logic says that what’s valuable right now are the people who understand how to communicate well with customers. Messages should be directed to those who are “fearful and concerned so they can feel comforted.”
5. A great example of a retailer who has risen up to the challenge. The Giant Company’s CEO Nick Bertram had letters to the editor published in Pennsylvania newspapers with a message of a #MoreForAll campaign in stores and on social media to highlight depleted supplies, hoarding shoppers, and food insecurity concerns. Engage3 also published a blog earlier that listed notable actions of food retailers that can be found HERE. Since then, a lot more retailers have done more to protect their shoppers and their associates.
And finally, some ideas to consider from the interviewed pricing thought leaders are below:
If you look at the current results, you might have a lot of retailers feeling pretty good that they’re way over forecast in sales, and that they’re doing well in this current environment. But if you’re too complacent with those results, you also have to recognize that customers have already pantry-loaded.Edris Bemanian, CEO of Engage3
The heightened awareness of grocery stores that has come along the pandemic bodes well for the longer term … the opportunity to burnish their images as trusted partners in times of distress, but also to potentially win new shoppers in a time of disruption.Ken Wyker, President of Circular Logic
Retailers have to be thinking now about how they’re going to retain the loyalty of their customer. They have to think, ‘What is my price image now? What is the loyalty I have now? And how am I going to manage that and my strategies as my competitors start implementing broad price reductions across the market to retain their customer and market share?Edris Bemanian, CEO of Engage3
Almost everyone is gaining net market share today. But we’re going to be looking at a net negative in many cases if people are not taking steps today to plan around strategies beyond the crisis.Edris Bemanian, CEO of Engage3
You can read Jon Springer’s full article HERE.