Driving Dairy Beyond The Aisle
Research shows meal solution merchandising is key to the retailer-shopper relationship.
It's never been more important for grocery retailers to build strong relationships with shoppers.
Consumer needs, including everything from a desire for home-cooked meals to increased convenience, are driving retail evolution. Add in competitive pressure from superstores, along with the strengthening link between grocery and health and wellness, and it's clear that maintaining shopper loyalty is crucial.
Retailers with the best understanding of how to fulfill varying shopper needs have the strongest connections. For that reason, the Innovation Center for U.S. Dairy in Rosemont, Ill., has compiled a body of work that focuses on shopper-centric merchandising solutions, leveraging five pilot-test concepts. This research has important implications for retailers: Creating innovative displays that provide true meal solutions for consumers can lead to double-digit incremental unit and dollar sales increases. The research also found that dairy categories are crucial to meal solution merchandising for many reasons, including the fact that dairy products are included in more grocery trips than items from nearly every other aisle.
Five Pilot Concepts
The innovation center, which was founded by America's dairy producers, conducted initial research that resulted in the development of 16 meal solution merchandising concepts. The concepts extended dairy outside of the traditional department perimeter to locations that encouraged meal building by pairing dairy with other products. This approach satisfies shopper needs for meal solutions and maximizes key consumer drivers, including health and wellness, convenience, and homemade meals.
Consumer input determined the strongest concepts for five in-store pilot tests:
Breakfast Zone: A section adjacent to the dairy department, highlighting quick, satisfying breakfast recipes for easy weekday preparation.
Fuel Your Day: A snacking area near pre-made meals and the deli, highlighting nutritious, hunger-satisfying options for between meals.
What's for Dinner: An end cap that creates one-stop shopping for a creative, family-pleasing dinner that's easy to prepare.
Chef's Creation: A mobile merchandising area that showcases restaurant-quality meal solutions for at-home chefs.
Perfect Pairings: A cross-merchandiser in the produce section, with complementary dairy products to provide well-balanced snack options.
The five pilot-test concepts reaped substantial results without the use of promotional pricing. A 19.2 percent average incremental increase in units sold across displays was achieved, while milk-based dairy products saw a 28.8 percent average gain. A 20.5 percent average incremental increase in dollar sales across the displays was also achieved, with clear outperformance by dairy products, at a 29.8 percent average increase.
Six Best Practices
Consumer research, including shopper intercepts, conducted during the test period for the five pilot-test concepts resulted in six best practices for retailers to consider and leverage:
- Convenience for all meal solution merchandising executions.
- Location, with displays in a place that makes intuitive sense for a shopper.
- Visibility, to help customers build concept understanding.
- Specificity, by including only products that truly address the concept's need state or meal occasion.
- Simplicity, by keeping the product mix and SKUs simple and relevant.
- Long-term solution that's refreshed often via shorter campaigns.
Meal solution merchandising makes sense for retailers who want to build a stronger connection with shoppers by meeting their needs for convenience, health and home cooking. For more information about the five pilot-test concepts, and to download the industry report Dairy Meal Solutions: Merchandising Works, visit www.usdairy.com/retailers.
$ Creating innovative displays that provide true meal solutions for consumers can lead to double-digit incremental unit and dollar sales increases.
Rebecca MacKay is VP of strategy, insights and planning for the Innovation Center for U.S. Dairy.