Change is in the works for grocers

by Dan Malovany
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Grocery shopping
To survive in today’s digital world, brick-and-mortar grocers and their food manufacturing suppliers must move away from a category management business model.
 

To survive in today’s digital world, brick-and-mortar grocers and their food manufacturing suppliers need to move away from a category management business model. Instead, they need to adopt a more merchandising-focused, shopper-centric approach to retailing in order to survive.

That was the conclusion of a compelling presentation during the recent American Bakers Association annual convention. Such evolution is necessary because category management, developed in pre-internet times some 27 years ago, has become outdated. Simply put, it manages one category at a time, creating the dreaded silos in grocers.

However, the interactive shopper-centric approach takes a “whole store perspective” and seeks to merchandise complementary products to provide solutions that are more in tune with the way shoppers act when purchasing food. Digital media — including social media, web sites and apps — get the credit for much of the shift to a shopper-centric environment. It influences 80% of retail purchases and about half of consumers’ food purchases.

Digital and social media, especially among younger consumers, could even be one of myriad factors affecting the physical layout of supermarkets in the future. Over the next few years, the presenters suggested that 40% of the center store in grocery may evaporate and be replaced by the perimeter of the store. That’s not good news for folks playing in the bread or cookie aisles. Making the shift won’t be easy. Retailers are slow to change. It took some chains up to 15 years to adapt to the category management model. However, change is in the works. Don’t get caught off guard. 

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