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FROM PERISHABLEPUNDIT 10.1.18
AMSTERDAM PRODUCE SUMMIT PREVIEW Branding and Packaging Expert Lisa Cork Takes Deep Dive Into
Omni-Channel Retailing, Opening the Floodgates Of Produce Marketing Opportunities (And Challenges)
When we set out to do a “sneak preview” piece on Lisa Cork’s upcoming presentation at The Amsterdam Produce Summit, we found her simply bursting with ideas and experiences.
So much so that Pundit Investigator and Special Projects Editor Mira Slott divided the piece in two!
Part I, which can be found on perishablepundit.com (Sept. 26, 2018), focuses on Big Picture Issues regarding Omni-Channel Retailing and the produce supply chain.
Cork, an American long living in New Zealand and owner of Fresh Produce Marketing, has built a reputation in wrestling with brand and packaging issues in the fresh produce arena and has won wide praise for many presentations.
The excerpt below from Part II of the interview (complete version on perishablepundit.com, Oct. 1, 2018) offers a glimpse of a deep-dive discussion into the real issues, practical problems and enormous opportunities that lay ahead:
Q: In store, retailers are limited on space to hold inven- tory versus the unlimited amount of “space” for inventory online. Will the future of produce industry become more niche, where a consumer wants Cotton Candy grapes in the same way as a unique book? Could the consumer pre-order and get the product when it’s available?
A: This is a great question, and I am not sure I can predict the answer yet. With fresh produce, unlike other CPG, our industry has the challenge of perishability and seasonality. So the potential answer to the question may depend on the online distribution system.
Let’s use Instacart as an example. I recently went ‘online shop- ping’ in Austin. Instacart gives me access to H-E-B, Central Market, Sprouts, Costco, Natural Grocers, Wheatsville Co-op, Sams Club, Whole Foods and Randalls. These are all brick-and-mortar retailers that are using Instacart to give them an online ordering, store pickup or home delivery offer.
Q: Are consumers less likely to be loyal if they can have online access to all these stores?
A: I don’t think so. There will always be shoppers who swap – but they are not the norm. For the foreseeable future, average consumers are still going to shop at of ine stores and will continue to support their favorite store. If they are happy with the produce quality of ine, then they may feel better about trying to buy produce online. Produce is not easy to compare across channels and, as mentioned above, trust is a big deal, so I still predict
JIM PREVOR EDITOR-IN-CHIEF
loyalty within Fresh.
Center-store, however, where every box of Wheaties looks
and is the same ... look for loyalty here to erode as consumers can easily price-shop with the swipe of a nger. This is where the multi-retail availability via Instacart might be making some CPG brands nervous.
Think this through ... In a case where it is ful lling its online orders through product being ‘picked’ at store level, the store may actually be able to offer more fresh produce variety online because it is selling its fresh produce via two channels – of ine, where shoppers are coming in to the store to buy, and online, where shoppers are using Instacart to buy from a speci c store. With two chances to sell, one can argue the retailer can keep product fresher and quality better because any sub-standard product could be discounted and sold at the of ine store.
Q: Are of ine stores willing to sell substandard product? Also, could you elaborate on how this results in selling more variety online versus in-store?
A: From what I have heard from suppliers, online retailers would love to sell more fresh produce varieties. But there are complicated logistics. Bigger producers want to ship pallet lots – not a lot of mixed boxes, which is what online can require. Given online sales of fresh are still quite low compared to of ine, this can be challenging.
For now, I see stores with an of ine presence being more successful at offering perishables than online, even though this is a space online really wants to be in – it is their MO. It’s currently just more challenging in fresh. In the future, the Ocado model of full automation may make this more possible, but does it remove the burden on the large volume growers to change the way they sell fruit?
The situation is quite different for a store working off a DC model. Here, there is less foot traf c. Here, there is no discounting poor quality, and unsold product turns into waste.
For a brand marketer, this is where the brave new world becomes reality. How are you stimulating awareness and demand for your product? How are you manifesting your brand online? Who are you targeting with key messages and what buying channel options are available to them? How are you building preference and trial?
To be a proactive, fresh produce brand marketer in omni-channel retail, target market and strategy will be critical because most brands won’t be able to afford to target everyone. pb
26 / OCTOBER 2018 / PRODUCE BUSINESS