GMDC looks at ‘center store of the future’

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New report argues that retailers must rethink their approach

GMDC looks at ‘center store of the future’
COLORADO SPRINGS, Colo. — Capitalizing on high-margin opportunities across the center store and taking a holistic view can pay off dramatically, says the Global Market Development Center (GMDC) in its latest next-practice report, “Center Store: Essential for Total Store Growth.”

Conventional retailers must rethink their stores and online strategies to satisfy how people really want to shop or risk fading into irrelevancy, the study suggests. With continued food price deflation, online leakage of impulse categories and evolving shopper attitudes, retailers of all formats and sizes must be more intentional and intuitive about the adjacency of relevant nonfoods in the perimeter, grocerants, and in-store health clinics to enhance the shopper experience, it says.

“The best stores run wellness sections that parallel today’s healthful lifestyle and self-care trends,” says GMDC president and chief executive officer Patrick Spear. “Their in-line areas for housewares, home, baby, home office, pet and more infuse the latest technologies and design. And they collaborate with brands that know end-users well, while innovating to connect emotionally. “It’s these types of strategies that upgrade store image and performance, and win the hearts and minds of today’s consumer.”

GMDC collaborated with Nielsen, Kantar Retail, Acosta Inc., Profitero Inc., Jacent Merchandising, GlobalData PLC, BHDP Architecture and RNG to curate robust and actionable insights that reveal how pairing the right food and nonfood can increase sales by three to five times. “These ‘out of aisle’ strategies will snap historic food-first and food-only cultures to attention by helping retailers navigate the tempest of change in shoppers,” says Mark Mechelse, GMDC’s director of research, industry insights and communications. “It’s irrefutable that shoppers — led by Millennials — want nonfoods to be as convenient as possible to ease their tasks, and they want it cool and edgy to match their adventurous nature.

“Nonfood items today are a ‘badge of honor’ for consumers. It’s truly the way these categories will differentiate themselves in the new world of shopping.”

Incredibly, if all food retailers moved shoppers up from three general merchandise purchases per year to four, they would add $500 million in sales. Nonfood destinations in the center store, perimeter and front end also suit today’s lifestyles and shopper attitudes, making housewares, pet, baby, personal care, pharmacy, and H&BC and wellness top categories for bringing shoppers back. Retailers that play offense with nonfoods grow trips, basket size and store image as satisfying, mission-completing destinations.

The report exposes the headwinds and pain that the center store faces today, and offers ideas to win back shoppers. A “Center Store of the Future,” conceptualized in the final pages, is designed to give stores new meaning and purpose by reflecting how shoppers will shop over the next two to five years. There are more store-in-stores, new mix strategies, health occasion groupings and provocative architecture to help the food channel attract a smarter shopper who is seeking an experience and keep him or her coming back for more. The entire design contains new technologies and identifies consumer “hot spots” to assist the shopper with ease of navigation and deliver ultimate convenience.



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