7-Eleven's Mobile Delivery Is Brand-Focused

By Brian Harris

tapingo-7-eleven

Branding to a younger, Millennial generation is the name of the game when it comes to the convenience of the Internet. This is just as true when it comes to the convenience store, and retailers like 7-Eleven are learning they can benefit from branding their technology to college students.

7-Eleven recently partnered with delivery service Tapingo, and will focus on users at or near participating colleges in Arizona, California, Maryland, Ohio, and Pennsylvania. It’s convenient and, perhaps most importantly for this age group, it’s cheap.

Tapingo offers a browse of the aisle of the neighborhood 7-Eleven. Users pay a $2.99 delivery charge but no additional service fees. In light of Tapingo’s low cost and high revenue potential, more colleges are considering applying the app to campus dining programs.

Targeting the Audience

Big players like Amazon (with it’s Prime Now food ordering app) and Grubhub have already proven the food delivery model, and the market has been inundated with a variety of smaller niche players, like Caviar. The more companies in this space, the more the customer stands to benefit. It’s literally the “Hunger Games”: May the least expensive service with the best options and customer service win!

7-Eleven is taking it a step further by targeting young consumers who wants inexpensive items through an inexpensive service. Items like energy drinks, ice cream, and packaged snacks have wide appeal to this age group. On college campuses, where many students may not have cars, the need for delivery service is even more important.

As the college dorm economy is driven more and more by technological advances, brands like 7-Eleven have more to gain by appealing to those advancements. It’s not just a chance to sell more Slurpees; it’s a chance to build a lasting relationship with a customer.

The Takeaway

In order to increase market share, 7-Eleven’s venture into delivery was a necessary step towards integrating the brand with the modern definition of convenience.

Once again, 7-Eleven has shown how it’s a brand that understands and delivers on the needs of its core customers. Other competing convenience stores are sure to follow, but success will largely depend on how well these retailers know their business at the store level, including the needs of their target customer.

To learn why one of the largest franchisees of 7-Eleven stores in the U.S. chose Zenput to improve daily operations, click here.

Topics: Retail, Franchise, C-store

Buying Local and the Importance of Retail Signage

By Vladik Rikhter

grown-local-grocery-signage

The consumer trend of buying local has grown from being “hot” to being a central driver of growth in the restaurant and grocery retail industry, according to the results of a recent survey by A.T. Kearney. Two years ago, when the study was first conducted, local food was a differentiator for retailers—a nice offering that could set them apart from competitors. Now, merchandising local food is critical to growth.

Importantly, the study found that retail companies and grocery stores can capitalize on increased interest in local foods by highlighting products through proper signage and advertisements.

“Localvore”

“Localvore” is the term that Randy Burt, co-author of the A.T. Kearney study, uses to describe this growing trend that’s especially popular among women and Millennials. It’s a movement that demands high standards for fresh food like seafood, meat, produce, and other assorted specialty items like jams, breads, and desserts.

A recent survey conducted by the National Restaurant Association (NRA) supports the A.T. Kearney study regarding the importance of local. The NRA asked nearly 1,600 professional chefs to identify the top food trends for restaurant menus in 2016. Check out the top 5 of 20:

  1. Locally sourced meats and seafood
  2. Chef-driven fast-casual concepts
  3. Locally grown produce
  4. Hyper-local sourcing
  5. Natural ingredients/minimally processed foods.

Forty-four percent identified local sourcing as the current food trend that has grown the most over the last decade.

The key to the local movement is not only how local the food is, but also how well the food is marketed. This involves a rebranding of the term “local,” and majority rules on this issue. Of the 1,500 U.S. shoppers surveyed, 96% now describe local food as products grown or produced within 100 miles from the point-of-sale, up from 58% in 2014. Majority also rules on what “local” means to quality, with 93% of consumers now associating local with “fresh.”

And if you sell specialty foods, this should be your favorite finding from the study: 78% of consumers are willing to pay a premium of 10% or more for local food, up from 70% in 2014. Indeed, premium is on the rise with the help of the “foodie” Millennial generation!

Availability is No Longer the Issue

Access to local food is no longer the roadblock to sales; only 27% of consumers surveyed said products were not available. However, communication is clearly a problem when more than half of the respondents said that they don’t buy local due to a lack of clear advertising/in-store signage.

It’s amazing that with all of our technological advancements, a gap in sales can come down to the basics of a misplaced sign! That may be the bad news, but the good news is that the problem is completely avoidable and/or fixable with greater oversight.

“Did You Find What You Were Looking for Today?”

Make Local Food a Priority: Consumers are drawn to local food and will pay a premium for it. Call attention to your offerings! It’s in the retailer’s interest to properly place signs designating where local food is available.

Get the Basics Right: Don’t just issue a memo or mass email hoping your managers take notice. Take action! Audit your stores in a way that includes promotional/signage auditing. Document store compliance and address issues at the store level.

Help your customers easily find their favorite local foods, and you may just become their favorite local store.

Topics: Retail, Grocery

Store Associates are the Biggest Influence on Customer Loyalty

By Jennifer Hoffman

grocery-employee

If I was a supermarket manager, I would call my associates together for a special meeting about the results of this study. I’d want my employees to know that they have the biggest influence in a customer coming back to our store. My employees are not only important—they’re THE most important part of the customer’s shopping experience!

Now in its eighth year, Retail Feedback Group's (RFG), 2015 U.S. Supermarket Experience Study found that supermarkets have the most success with the most customer satisfaction, scoring an average of 4.44 on a five-point scale, where 5 is the highest score.

Areas of Excellence and Improvement

Shoppers rated supermarkets highly in key customer service areas, including feeling like a welcome guest (4.70), deriving food expertise from store associates (4.66), and encountering exceptional service (4.66).

The two highest-rated core experience factors were quality/freshness of the food and groceries (4.47) and cleanliness of the store (4.44). High marks were given to friendliness and attitude of the store personnel (4.43) and the speed and efficiency of checkout (4.41). However, helpfulness and knowledge of personnel (4.35) scored a lower rating, as well as availability of personnel to provide assistance (4.26).

“Our findings show that two of the three lowest-rated areas among the core experience factors are people-related – helpfulness and knowledge of personnel and the availability of personnel to provide assistance," said Doug Madenberg, RFG principal. "It is important to strengthen these areas, especially considering how store associates can positively influence overall satisfaction.”

The Takeaway

Customers want to feel at home when they’re purchasing groceries. The more at home they feel —from the moment that they step into the supermarket to the moment they step out of the door —the more loyalty they’ll feel to that store and the brands that the store sells.

One of the ways to enable personal interaction between employees and customers is to upgrade technology so that tasks that formerly had to be done on ink and paper can be done with more efficiency. With mobile technology, managers free themselves from desks and workstations and automate processes. This results in more time to help customers and more time with associates.

Associates will become more knowledgeable and helpful when their managers are a visible presence in the store, leading by example—not just by directive.

Think it will cost you a lot of money to upgrade to mobile technology? Think again!

Check out our post on enacting a Bring Your Own Device (BYOD) policy.

Topics: Retail, Grocery

To Close or Stay Open on Black Friday?

By Brian Harris

rei-exterior

In 2008, a worker died at a Long Island Walmart after being trampled in a Black Friday stampede. Across the country that same day, gunfire broke out at a Southern California Toys ‘R Us, leaving two dead. In 2011, shoppers in West Virginia stepped over a man who had collapsed while shopping in Target; he died later at the hospital.

These are just a few of the Black Friday shopping incidents in recent memory that have shaken our public conscience. Some retailers have taken a stand against Black Friday shopping. The most recent is Recreational Equipment Inc. (REI), which announced that it plans to close 143 stores on Black Friday. The store will pay its 12,000 employees on their day off, and encourages other retailers to join them.

REI’s move is both daring and expensive move, but as Forbes reports, it’s on point not only with public sentiment but also with the brand’s mission. “We’re a different kind of company—and while the rest of the world is fighting it out in the aisles, we’ll be spending our day a little differently,” said CEO Jerry Stritzke in a statement about the decision. “We’re choosing to opt outside, and want you to come with us.” REI’s online store will still be running under the watch of a few employees, however.

The reality is that Black Friday is no longer a top sales day for many specialty retailers like REI. The privately held company sees more deals from its membership structure, and sales also pick up during the spring. They are indeed a different kind of company—in a completely different situation than big-box retailers like Target and Walmart.

“If we announced to our guests that we weren’t going to be open on Black Friday, I think we’d have a lot of pushback,” Brian Cornell, CEO of Target, told The New York Times. “It’s a very important part of the holiday season. It really is a family tradition.”

For some families, it is. For other families, Black Friday shopping as become a tradition of rejection.

Unlike Walmart and Coscto, which both can fall back on gas sales, Target just has its sales floor. Costco will be closed on Thanksgiving, while Walmart and Target will once again compete to open Thanksgiving evening. We see this trend in department stores like Sears and Macy’s, which will both open on 6 p.m. on Thanksgiving this year.

What is Important to Your Brand?

If you’re a specialty retailer like REI, can you afford to set yourself apart and stay closed on Black Friday? It may be an option worth considering, since it will call attention to your brand in a positive light. If you’re a big-box retailer or a discount retailer trying to compete with a big-box retailer, it unfortunately looks like you’re back to the grind this holiday.

Maybe more retailers will follow the path of GameStop and Staples, which are both opening later on Black Friday, and remaining closed on Thanksgiving.

If you’re a big-box retailer or a discount retailer trying to compete with a big-box retailer, it unfortunately looks like you’re back to the grind this holiday.

The Retail Turkey Returns

Last year, the National Retail Federation suggested that spending had become more dispersed across the holiday season, if not the entire year. This year, the industry group predicts that sales for November and December will rise 3.7% to $630 billion, below last year’s 4.1% gain.  Sales during the holidays represent nearly 20% of the retail industry’s annual sales of $3.2 trillion, reported the Wall Street Journal.

Unfortunately, Black Friday door busters are still the big fat turkey of holiday sales for so many of America’s largest retailers. It’s been this way for at least a decade as toys have become more interactive and more expensive and, generally speaking, middle class spending habits on everything from gadgets to clothing/accessories have gone upscale.

Black Friday has become the balance of the American dream and a perennial nightmare. If the pattern won’t reverse, it may one day just become obsolete with Internet sales.

Topics: Retail

Duane Reade: A New Foodservice Player Must Know the Rules

By Jennifer Hoffman

duane-reade-fresh-food

Duane Reade and parent company Walgreens are mostly known for their quick, pharmaceutical pickups. However, that's slowly changing as the drug store industry takes a more inclusive approach to on-the-go convenience. Recently, more drug stores are engaging in channel blurring and moving in the direction of the “grocerant niche” by incorporating more hot and fresh food into their offerings.

On a recent visit to a Duane Reade store, I immediately noticed a large area of the store was devoted to fresh food and wrapped sandwiches. According to this article by Grocerant Guru, the retailer chose stores in San Francisco, New York, and Chicago to pilot its fresh food program. The idea appears to have gained traction. The retailer is planning to expand and offer its ready-to-eat plates and heat-and-eat plates, in an effort to become a destination for time-starved customers planning dinner.

Dangers of Overcharging

Offering fresh, pre-packaged foods is a trend that comes with some controversy. In July, two plaintiffs in New York filed a class-action lawsuit against Duane Reade. The suit alleges that they were overcharged for prepackaged food with a price based upon a false, inflated weight.

This lawsuit is yet another example of the importance of auditing and self-auditing in any type of retail setting with pre-packaged food. We saw it happen in Whole Foods, and it proved to be a major setback for the retailer. We also saw pricing troubles negatively impact Haggen, which declared bankruptcy in the aftermath of a failed expansion.

Duane Reade is in an interesting position, and this lawsuit present an important opportunity. Since the retailer is not yet well know for food sales, it’s possible they can contain this lawsuit, regroup, and make sure mistakes don’t happen in a larger rollout.

No Room for Error

Duane Reade has to get it right from the start. When you look at their full offering, you realize there’s a lot of room for error. Items include fresh fruits and vegetables, salads, sushi and sandwiches. Some stores even carry meats, wraps, and soups. All of these items rely on freshness and storage temperature.

It all comes down to training employees how to manage a cold case, regularly checking temperatures of foods, and restocking items. Making this transition is easier said than done when for years, Duane Reade had operated under a “set-and-forget” model of dry goods on store shelves.

If Duane Reade hopes to compete against delis and higher-end convenience stores, they will have to adopt several self-auditing procedures to check the storage of food ingredients, the presentation of the cold case, and even the cleanliness of the store. During those initial weeks, real-time communication with senior management will be key – as it is should be during any large promotional rollout.

The proof will be in the process. Based on location alone, Duane Reade can be a huge competitor in the fresh food space, but they must take quality control seriously from the start.

Topics: Retail

4 Crucial Elements of Verifying In-Store Promotions

By Scott Hill

sale-collage

You see that stuff over there? The stuff in the box? Yeah, I'm gonna need you to set that up... Looks good. Thanks.

That's the kind of conversation I fear is happening in retail stores across America. Just the thought of it is enough to keep me up at night!

How does your store verify the correct materials at the correct store at the correct price and at the correct time? There are too many variables here that could go awry.

Let's break it down to see areas of improvement:

1. The Materials
Is there enough product? Are the product facings correct? Unfortunately, it's more complicated than just receiving the SKUs. An in-store promotion may require some assembly, from a cardboard display to the reorganization of shelf space. These changes must be done according to planogram.

How does it look now? Request that your team members take a photo to verify the correct setup.

2. The Store
It's a two-sided coin. On one side, the CPG company or vendor needs to track materials and compliance with set-up. On the other side, the retailer should know its own rate of compliance across the chain. Both parties should be able to call up this information quickly and pinpoint non-compliant stores.

3. The Price is Right?
Imagine if the game show had a question mark after it.There's no room for guesswork when it comes to the pricing of promotional merchandising! That's why there are product UPC readers. The right program can easily report back on a SKU.

4. The Correct Time
Customers will come to your store looking for a specific item on promotion. You have to be prepared. If a rollout is supposed to take two weeks, it can't take three. This applies to retail food establishments, as well. Menus or digital menu boards must be updated. Each store promotion should have the same start and stop time. Again, you need a system that can easily show you non-compliant stores vs. compliant stores.

The Takeaway

In a recent post about food quality, my colleague Jennifer warned against the "set-and-forget" mentality. I'd like to borrow the phrase and apply it to in-store promotions. Diligence is what sets apart winners from champions in the retail space.

The only way to be diligent in a brick-and-mortar business is to get out in the field and share insights across your network.

Learn more about the advantages of Bring Your Own Device (BYOD) and real-time exception reporting by clicking here.

Topics: Retail

The Rise of ‘Micro-Patisseries’ and Specialty Bakeries

By Brian Harris

boulange-bakery

I'm convinced that for every person who wants a kale smoothie, there's someone else who wants a cinnamon sticky bun.

It's easy to look at the cupcake trend and say it was a bust. The chain that quickly comes to mind is Crumbs, which closed several dozen of its locations in 2014. In fact, this article chronicles the closings of popular chain bakeries like Mrs. Fields and Krispy Kreme.

You'll notice that all of these chains have one thing in common, though; they all offered one type of item. As Technomic's Darren Tristano famously said, "A cupcake shop today can't survive on just cupcakes."

So, who can be successful in this bakery business? I didn't have to look far to find the answer. In fact, all I had to do was walk a mile away from this office to Pinkie's Bakery in San Francisco.

Founder Cheryl Burr is diversifying her product offerings. She's taken over a 1,200-sq.-ft. kitchen to double the bakery's wholesale clients from 20 to 40 accounts. Pinkie's original SoMa location will produce American classics like muffins and bread, while the new Bernal Heights location will look to expand into croissants and French boulangerie-type pastries.

Speaking of boulangerie, La Boulange is preparing for a renaissance. Starbucks bought the beloved San Francisco bakery chain in 2012 for $100 million. After founder Pascal Rigo helped the Starbucks roll out new recipes across its chain, Starbucks suddenly announced in August that  it would close La Boulange standalone bakeries in the Bay Area, while keeping the brand name for bakery products.

Meanwhile, Rigo said he will reopen six of the stores in San Francisco under the banner of La Boulangerie de San Francisco. Everyone loves a comeback, but the bakery faces one big challenge: increased competition.

Burr of Pinkie's is aware of this challenge. "When we opened in 2010, there was us and La Boulange, but now there is Craftsman and Wolves, Flour & Co. a huge upsurgence of 'micro-patisseries," she said.

Simplified Operation + Steady Growth = Sweet Success

If you're in the bakery business, this idea of micro-patisseries is a trend worth noting. Just from the examples in my own neighborhood, I see smaller bakery chains that are more in touch with their customer base and better at localizing their offerings. How can larger coffee chains enhance their offerings while still having that small-shop atmosphere?

It will take a talented staff, exceptional management and superior communication for quality control and inventory. No matter how you slice it, these are the fundamentals of a successful foodservice operation that brings in the bread.

Topics: Retail, Restaurants

Why Retailers Should Consider Private-Label Products

By Brian Harris

kirkland-colombian-coffee

When shopping in a grocery store or retail store of any kind, today’s customers are looking for one thing: value. One way that retailers can entice customers with “as much bang for your buck” is through private-label products. According to research by IRI, there can be a 28% price gap between private labels and brand names—in some categories up to 50%—and that kind of value can bring customers coming back for more.

The Recession Lingers

Consumer preference for private-label products is in part a testament to the lingering effects of the recession and difficult economic times. Surveys conducted during the recession found that 93% of shoppers had changed their shopping habits since the stock market tumble. IRI’s research found that 40% of consumers “remain financially challenged” and brand names suffer as a result.

“Affordable brands mean something different to every shopper, on every trip and down every aisle. How to define it at any given moment of purchase is the trick,” Susan Viamari, editor of IRI Times & Trends. It means customers are still in the mentality of “every little bit counts” and retailers should accommodate that whenever possible.

Private-Label Gap Shrinks

As the economy rebounds and consumers’ financial situations improve, more name brands are trying to emphasize value and more premium private-label varieties are hitting the market. National brands are ramping up efforts to capture share, according to IRI.

This trend is especially prevalent in the grocery industry. Whole Foods announced it will roll out of “365 Stores,” which will feature only private-label products from their 365 brand. While it may be difficult for the company to come back from their recent pricing scandal, their attempt to provide more value to customers may pay off in regaining customer loyalty.

Just in the month of September, Food Lion has launched a private-label produce line, and Kings launched a private-label line featuring specialty items. Meanwhile, Meijer is combining its Meijer Naturals and Meijer Organic product lines into one line called True Goodness. These grocers must be onto something when even Internet behemoth Amazon announced earlier this summer that it plans to launch private-label grocery items.

Why Does It All Mean for CPG Companies and Retailers?

More competition means less room for error in delivering quality and consistency. The pressure is on to not only meet consumer expectations for quality, but also to respond to an increasingly crowded private-label market.

What operational change will you make to gain an advantage on your competitor?

Topics: Retail

Bridge the Gaps in Planogram Verification With Zenput

By Scott Hill

choban-yogurt-facing-1

A planogram is a visual diagram that details where every product in a retail store should be placed. No detail is spared when creating a planogram. The schematics usually present a flow chart for the particular departments or sections of a store, and what aisle and what shelf each product is located. A planogram also shows how many facings are allocated for each SKU.

What does a planogram look like?

It can be as simple as a photo of a preset section or more detailed with numbered peg holes and shelf notches. Of course, the complexity can vary by the size of the store and the needs of the retailer.

See Also: How to Implement and Verify a Planogram

Other than helping with product placement, what is a planogram’s purpose?

Here are the two realities of retail in today’s world: 1. Competition is increasing. 2 Channels are blurring. A planogram assigns selling potential to every square foot of space, helps to maintain tighter control of inventory and can serve as a effective communication tool for staff-produced displays.

However, planogram creation doesn’t occur in a vacuum, nor does planogram verification.

Zenput bridges three gaps in retail execution:

  • The gap between creating a planogram and verifying it.
  • The gap between planogram verification and identifying actionable results.
  • The gap between identifying actionable results and carrying them out.

With Zenput, a planogram audit is carried out in four steps:

1. On their desktop or mobile device, a senior manager uses Zenput’ flexible platform to create the Planogram Audit Form  with prompts and fields of measurement. Some questions may be simple “yes” or “no” responses, while others may require an employee to input a price or scan a barcode. Ideally, the planogram audit also requires photos of a completed promotional display.

2. The senior manager attaches the visual planogram for reference. There’s no need to email or print out copies; this file is accessible on Zenput’s cloud-based platform.

3. The senior manager uses Zenput to create a new planogram auditing project with a deadline. The task of verifying the store planogram is assigned to all store managers. The senior manager can track submission statistics, and Zenput’s integration with Google maps pinpoints tracks when and where each submission occurred.

4. Senior managers can verify planograms once the forms are submitted. Real-time exception notifications can alert the retailer to a problem in a store. For instance, if a store in the network does not submit photos for verification, the senior management team will be alerted to find out why. Or, perhaps photos were submitted but the senior manager notices something is awry in the product display.

Either way, auditing the planogram results in actionable insights. Error in retail execution can be addressed that same day, rather than waiting for a weekly sales report to reveal problems in merchandising strategy.

Sample Planogram Implementation Form

Topics: Retail, C-store, CPG

‘Zenput Opportunity’: A Broken Mic Stand and a Fallout With Guitar Center

By Jennifer Hoffman

guitar-center

A couple of days ago, a friend messaged me saying she had an authentic  “Zenput moment.” What did that mean? I was intrigued!

My friend is a hobby musician and multi-instrumentalist. She has been a customer of Guitar Center for many years, but recently she had a very disappointing experience.

When you’re a musician, equipment breaks with wear-and-tear and electronics needs to be updated. Musicians tend to have a favorite brick-and-mortar destination for their musical needs. Just like someone who wants to buy a shirt or dress might want to try it on at first, a musician wants to hear the instrument or test the quality of the equipment before purchasing it.

For the sake of background, Guitar Center’s financial woes have been discussed at length, particularly in strategist Eric Garland’s analysis, “Guitar Center: A story about the end of big box retail.” Check out his article to learn more.

Back to my friend’s story: My friend told her father that she broke a microphone stand. Her father decided to surprise her and try to fix the stand instead of throwing it in the trash. He stopped at Guitar Center to try to buy a replacement part, but they didn’t have it. A friendly sales associate sold him the stand’s replacement arm instead. He came home and repaired the stand.

My friend happened to check her email that same day where she found a promotion advertising the store’s accessory sale. Her father could have bought a brand-new microphone stand for the same cost as the replacement arm. The sales associate had not mentioned the promotion to him. This made my friend angry since her dad had gone out of his way to do her a favor.

The next day, she stopped into Guitar Center with the receipt. The mic stand advertised in the email promotion had not yet been reduced, and the sales associate said he had no knowledge of the promotion because, “Corporate doesn’t communicate those emails with each individual store.” AHA! Her Zenput moment!

We don’t talk about the importance of communication at the store level because we think it’s cute. Failure to execute promotional rollouts is a real problem frustrating your employees, angering your customers, and ultimately losing business. What’s the point of emailing promotions when they aren’t listed correctly in your store, and your sales associates aren’t made aware of the promotions?

To be fair, Guitar Center did offer to honor the online promotion price if my friend dismantled the stand that had already been repaired and returned to the store with the replacement arm. It wasn’t worth her time, though, since the repair was already done and band practice was the next day.

It should also be noted that this wasn’t my friend’s first experience with poor customer service at Guitar Center. Her brother bought a keyboard there a few years ago, and had to return to the store with his receipt when they didn’t apply the right discount.

When a brick-and-mortar retail organization is struggling to survive, every transaction and every customer experience counts. A customer can’t be frustrated to the point where they think they’re going to have a better experience shopping in a different store or online.

With any luck, more brick-and-mortar retailers will have their “Zenput moment” before it’s too late!

Topics: Retail