Priming the Next-Gen Pantry

With e-commerce and digital strategies serving as the dominant themes in food retailing these days, the industry’s ferocious cycle of unparalleled disruption and change continues to intensify. Indeed, while online, mobile and social media are providing consumers with a plethora of platforms on which to engage, interact and comparison-shop, the most aggressive grocers are seizing the opportunity to nurture their brands — and bonds — with shoppers by broadening their omni-channel offerings while prioritizing capital expenditures to drive loyalty and bolster the frequency of in-store visits.

As showcased within the pages of our 2014 Store Design Contest results, which begin on page 22, our inspiring slate of 14 winners — eight of which are new constructions, with the rest major remodels — are most definitely heeding the call and moving the differentiation needle forward in ways never before seen in previous years’ showdowns.

For instance, store owners Jennifer and Darren Newbanks went outside the box — literally — by adding a drive-through window with digital menuboards to display the multi-daypart prepared food offerings housed within their new Fricks Market, in Union, Mo. Selected as our Best New Construction Project Under 50,000 Square Feet, the 35,600-square-foot stunner, featured on this month’s cover, boasts an array of other innovative features exemplifying what Bill Bishop, of Barrington, Ill.-based omni-channel consultancy Brick Meets Click, describes as the requisite “mix of high tech and high touch needed to attract all the spending from a geographic trade area,” while remaining true to its distinctive local roots.

Discussing where he sees the next generation of supermarket design heading, Bishop says, “Food stores are busy playing ‘catch up’ with the rapidly advancing expectations of their customers, many of whom now believe that retailers can easily act on the knowledge of what they’ve purchased from them.” In turn, he continues, many grocery organizations are struggling mightily “with the cost of connecting more effectively with shoppers as they watch the effectiveness of the printed circular erode. Retailers get the idea that it’s about more effectively engaging customers and delivering a better shopping experience, but many are still in the early stages of understanding exactly what that means and how to do it.”

The good news, adds Bishop, is “the emerging appreciation among food retailers to find ways to profitably drive sales to their stores and simultaneously connect with customers before, during and after their shopping experience — including when they’re shopping online.” Accordingly, successful new stores are on a slow but steady path to solve this more complicated set of challenges by:

• ➤ Tailoring the assortment and pricing to customers in specific trade areas
• ➤ Offering services, such as online shopping with and without delivery, to satisfy the needs of a broad range of shopping occasions
• ➤ Developing new store formats and store networks made up of a range of platforms to best serve customers in each trade area, as well as in the larger metro markets, which is where Bishop believes the real creativity will occur

By way of example, he cites Chicago-area food retailers’ repurposing of shuttered newsstands as retail outlets. Equally intriguing is the potential demise of thousands of branch bank locations in the coming years, which Bishop says will potentially open up untold new small sites ideally suited to serve as both pickup repositories and companion retail stores. While acknowledging that this type of site “is not the same as a reinvented big store,” he notes that it’s still a viable prospect for conventional grocers to reinvent.

As the plot continues to thicken amid an already dense fog, Bishop says it remains to be seen what the reconfigured landscape will ultimately look like when it clears. But this much is certain: In the Darwinian low-margin/high-stakes grocery slugfest, the fittest will be those that harness the Internet and technology with more sophisticated, solutions-based concept stores to drive sales and perpetuate their brands as the e-grocery evolution proliferates.

In the Darwinian low-margin/high-stakes grocery slugfest, the fittest will be those that harness the Internet and technology with more sophisticated, solutions-based concept stores.