Supermarket retailers are facing a sea change when it comes to how the products they sell are marketed. That responsibility is going to migrate from manufacturers to the retailers themselves before too long.
Why? Because supermarket shoppers are a fickle bunch. And nowhere is that more evident than in their fast-changing attitudes toward brands and their loyalty to them — or, to be more precise, their lack of brand loyalty.
Of course, brand loyalty has been fading for a long time, but for the first time, surveys of motivations behind consumer buying decisions show that a large majority of supermarket shoppers have no brand preference at all. Instead, they are prone to swing between brands, or to opt equally for specialty or store brands.
Several newly issued consumer studies show how dramatic the decline in brand loyalty is. For instance, Deloitte’s American Pantry Study shows that 90% of shoppers at least occasionally will opt for a store brand in lieu of a national brand. That finding is backed by other surveys that indicate a striking 56% of shoppers have no brand loyalty at all.
This lack of brand loyalty gives national manufacturers of consumer packaged goods (CPG) every reason to feel agita. It also means that manufacturers soon won’t have the wherewithal to do all the heavy lifting concerning product promotion.
So, if manufacturers soon won’t promote as effectively, who will? Well, the only player left is the retailer.
Here’s some of what retailers will have to do better on their own:
- Seize the product-development initiative from national CPG manufacturers. No longer should store brands mimic national brands in content or appearance. Instead, store brands should be high-quality and attractively packaged products in their own right. They should be priced near, or even above, similar national brands’ price points. Supermarkets can also lift a page from Target’s playbook by offering tiers of store brand product ranging from value offerings to high end.
- Make the supermarket stand for something. It should be conspicuous to shoppers that the store means, say, quality, innovative products, or price. Limited assortment operators including Whole Foods, Trader Joe’s and Aldi, respectively, already do this. Or, like Target, supermarkets can stand for “cheap chic.”
- Make the supermarket an inviting destination so customers will want to go there instead of viewing shopping as drudgery. That means the supermarket must have high-quality perishables departments, be convenient to shop, and feature high service levels. Supermarket operators Wegmans and Publix already do a good job of this.
Even with those basics under their belts, supermarkets still will face a few challenges. That’s because consumer studies show that huge majorities of shoppers are looking for quality products throughout the store — up to 75% of shoppers say that is what they have in mind.
And, just to complicate things, many shoppers make buying decisions on the basis of whim or desire rather than more rational-seeming reasons.
Finally, retailers must market with this conflicting mandate in mind: shoppers still demand reasonable price points.
Now let’s return to the original issue of the decline of brand loyalty. A multitude of reasons have contributed to the phenomenon, but the longest-running factor is the migration of mass media toward niche media. There was a time when brand owners could blanket the consciousness of consumers with a few strategic ad buys in broadcast and print media. Those days are long gone.
Other factors include consumers’ growing awareness that food and health are intertwined. Consumers also are on constant lookout for new and attractively designed products; some 20% of shoppers seek new-product alternatives during every store trip. Neither of these factors cater to CPGs strong suit.
In the end, maybe it’s just as well that mass marketing is disappearing and consumers are more assertive about what products they want. Retailers using new media to cater to small groups of like-minded consumers or even individual consumers have in their hands the means to present to shoppers just what they’re seeking.
JC Penney, now JCP, and Macy’s are at war over Martha Stewart. The Appeals Court ruled recently that Penney could sell Martha Stewart product temporarily, but, not under the Martha Stewart brand name. The question of why the now-departed JCP CEO and former Apple and Target superstar, Ron Johnson, and the lifestyle guru and home goddess, Martha Stewart, agreed on a relationship under the umbrella of the existing Macy’s contract – kind of like having two husbands or wives at the same time – is best left to other experts. But the question of why all the fuss about Martha, why two major and competing retailers are willing to fight for her, goes well beyond the legal challenges. It goes simply to the strength of the Martha Stewart brand which is arguably the leading non-apparel brand in the country, perhaps rivaling only Ralph Lauren in the strength of its conviction, equity, vision and imprimatur of its founder, the inspiration providing, Non-Executive Chairman, and, convicted felon, Martha Stewart. 
Lower Prices on Food and Energy Buoy Fashion Products
“Hi Renee. The tank top you bought last time is on sale. You should check them out,” says the holographic image of a perky sales associate as she walks into the store.
Point the Way
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