Our member chief executive officers often emphasize with us that the heart of customer loyalty is value — but perhaps not in the traditional ways we’ve defined value through taste, price and convenience. In fact, the very concept of value has become increasingly more difficult to describe because it is unique and so personal for each of our customers.
Adding more tension to this diverse customer need base is the fact that the long-held notion of there being a “primary” shopper for each household is eroding. More Americans are shopping than ever before, with 85% of consumers surveyed in our U.S. Grocery Shopper Trends 2016 analysis indicating they have at least 50% of the household responsibility for grocery shopping. This all adds up to the need for grocery stores to deepen personal service at a time when the horizon of shoppers is widening.
With more people shopping for both practical reasons and for enjoyment, supermarkets are well positioned within their customers’ circles of trust when it comes to food safety and support for their health and wellness objectives. This is where private brands have an opportunity to lead and help the food retail environment diversify and attract a loyal customer base. We’re also witnessing new ways that food retailers communicate with their customers, as shoppers increasingly utilize digital tools prior to and during shopping trips.
Levels of online shopping for groceries may still be relatively small, but it is growing and shoppers identify digital tools — such as their smartphones — as essential parts of their shopping experience, for research, sourcing or list management.
The concept of building a strategy and investing in tools and technologies that change by the minute is daunting for companies that average a 1% to 2% annual profit margin, so FMI is working to build a stronger help center to offer members guidance and supply needed resources. FMI recently announced a three-year alliance with Nielsen to assist retailers and manufacturers as they focus on better understanding the forces and factors of change driven by digital technologies within the food marketplace.
We’ll explore with Nielsen how a new generation of technology-enabled digital collaboration, including format, supply chain and information capabilities, will be required for seamless engagement with the grocery customer. The concept of “connected commerce” goes well beyond digital. Without a doubt, digital is becoming an indispensable part of food culture and modern shopping.
Technology is changing the game in other ways as well.
In the real world today, for example, we know that coworkers communicate via email when their work stations are only 10 feet apart. My teenage son has friends who text each other while sitting together at the same table, so clearly our devices have become integral parts of many of our conversations. This can happen in-store as well, with customers preferring to turn to their smartphones to locate a product, get a prescription filled while they shop, place a deli order or have a quicker, easier checkout experience.
And I’m not even getting into how technology is improving on-shelf availability and stock rotation — those not so identifiable ways that technology is enhancing the consumer’s experience.
Health and Wellness
Shopper attitudes and aspirations about health and wellness also significantly influence their purchase decisions.
Beyond basic food safety, our research suggests that shoppers look for fresh, less-processed cues through absence of negatives. Sixty-six percent of shoppers say they avoid sodium, sugar, trans fats and other processing cues. Twenty-two percent of consumers say they are concerned that the food they eat isn’t nutritious enough. Indeed, our food retailers are embracing this opportunity to engage with their shoppers proactively and giving them the information, tools and even counselors necessary to help them make smarter shopping decisions.
Even more opportunities abound in addressing more progressive shoppers who seek positive nutritional attributes and positive connections to where their food comes from.
It is also worth touting the role of supermarket dietitians. We have witnessed this talented group of individuals as they catapult into the limelight in recent several years, leading us to invent new platforms, inspire new research and create new partnerships to nurture their growth and success.
Supermarket RDs (retail dieticians) are also among our most engaged audiences with FMI in touting our campaigns, research and interacting with us on social media. We saw this come through most in our second annual National Family Meals Month campaign in September. RDs embraced the idea of the benefits of family meals that supported societal and wellness goals for families when they shared one more meal each week together using items from the grocery store.
The majority of our member companies have hired RDs at the corporate level serving a variety of roles and functions and, notably, the numbers of dietitians now at store level have increased over the last several years.
Besides rapidly evolving, our industry clearly is also heavily regulated. Food safety, nutrition, ingredients and allergens, country-of-origin, and even bioterrorism all come with unique sets of requirements for food retailers to implement, follow and document. FMI’s job is to ensure that these regulations can be adopted by the industry as efficiently as possible and that they actually will result in the desired outcomes rather than serving to regulate for regulation’s sake. And, importantly, FMI serves to help lessen the burden — from unnecessary paperwork to strains on resources. Certainly, with each new Congress or administration, we see shifts in the focus on how policy decisions influence the industry.
For example, FMI was actively engaged in, and helped to positively influence, a legislative battle on the subject of GMO disclosure. With the support of our membership and congressional champions, GMO ingredient disclosure will be federally mandated in a consistent manner and will not necessarily be relegated to an overcrowded label. While some have characterized the GMO labeling bill as being a far-from-perfect piece of legislation, it resulted from necessary compromise and managed to overcome a number of obstacles that some predicted would be insurmountable. Particularly relevant in this day and age, in the context of a Congress known for its strong partisan divide, the Biotech Labeling legislation received solid bipartisan support — and even had a few members of both parties in opposition. Most important, against a strong current of congressional inactivity and the fearful headwind of doing anything controversial in an election season, this bill motivated a strong majority of the members of both houses to act decisively on a passionately explosive issue and pass meaningful legislation.
Now begins the next phase of this journey, which is to help the Department of Agriculture determine an operational national standard for labeling products that contain genetically modified ingredients. We must also be about ensuring that all the communication channels are in place and fully functional that we wish to employ as new avenues of providing food shoppers access to the information they want about the foods they enjoy. We know these will be scrutinized, and we can afford no missteps in this arena.
Food safety is another concern. FMI has always supported the Food Safety Modernization Act (FSMA) and its goals to secure the integrity of the U.S. food supply. Our 2016 U.S. Grocery Shopper Trends analysis continues to emphasize the importance of food safety and nurturing consumer trust: 86% of shoppers are confident that the food they buy at the grocery store is safe. FSMA will help maintain this confidence in our industry.
FSMA’s seven rules that directly affect the food retail industry cover prevention, detection, response and imports. Although FSMA compliance can seem overwhelming when one has reviewed as many volumes of rules as FMI staff experts have done over the years, we have developed many resources to help with FSMA implementation and compliance. For example, FMI has developed a sample hazard analysis for the preparation of a retail distribution center food safety plan, and we are working to update and provide a sample plan that our members can use to help ensure they are in compliance. Additional FSMA-related information and resources can be accessed through FMI’s website at www.fmi.org/FSMAResources.
Menu labeling rules are another important issue. In February 2016, the House of Representatives approved the Common Sense Nutrition Labeling Act with strong bipartisan support (266 in favor, 144 opposed and 1 abstention). FMI supported this legislation for its effort to bring some degree of reason and rationality to tenets of the menu labeling legislation. From the very beginning we have expressed our support for sharing with grocery store customers the information they want, need and deserve, but we have argued against making grocery stores responsible for complying with a law that was designed and intended for a restaurant setting. Members of the House recognized that aspects of the menu labeling law just don’t fit and supported the revisions provided by the Common Sense Nutrition Labeling Act. Now, our work is focused on getting the Senate to take up its version of the bill, a goal for the new Congress.
Leslie Sarasin is president and chief executive officer of the Food Marketing Institute.