Tuesday, 30 October 2012

Ambient Needs Ambience

I’ve muttered about this before, but after visiting the latest wood-covered Tesco showstore in Bishops Stortford last week, I’m going to get on my high horse again.

Trends come and go, but ambient grocery is a constant. The emergence of packaged foods was a key step towards the grocery industry we all know and love now, but it’s never been the sexy end of retail. Whenever one of our grocers go down a heritage route, we see boater-wearing moustached guardians of cheese counters, not the lads in aprons stacking tins. They should – how about the Asquith Brothers cutting out coupons from tins of beans in order to fund their permanent price cuts? It’s part of our history and the reason why most people visit supermarkets, but yet it remains the poor relation.

I’ve now been to all the top 6’s current landmark stores and not one of them seems to have spent more than 5 minutes on their ambient grocery department. This seems a big miss to me – ambient offers some vast untapped opportunities to trade shoppers up through engagement at fixture. With the current dependency on promotional activity on ambient areas, surely an attempt to snap shoppers out of auto-pilot and turn them onto new, unpromoted and higher margin products is a good thing?

All the current effort is being placed on three areas – Fresh, BWS and Health & Beauty. Not long ago, it was Clothing and General Merchandise, but the huge seasonal clearances on these areas suggest that those initially high margins aren’t translating to the bottom line through the cycle. Even George, arguably the best supermarket clothing brand, is resorting to car boot sale style clearances in Asda car parks and my local Tesco stores seem to have a permanent set of rails with marked down products.

Fresh has the same issues. It is an incredibly high risk strategy in terms of generating waste. With clothing, you have a couple of months to let something sell, with fresh it’s a week at best. In my past, I’ve had increasingly irate store managers phoning me up and begging to be allowed to initiate local delists of fresh products following new range launches. And now, amongst the brightly coloured cabinets and segmentation signage, there are yellow stickers everywhere. Bishops Stortford Tesco’s wood-encased over-sized Food To Go area was full of exotic looking sandwiches at reduced to clear prices. Even in what looks a busy Morrisons in Cheadle Heath, the fresh department is littered with clearance items.

Now, I should mention that I work for an ambient food manufacturer these days, so I do have a slight bias against fresh areas. That said, I approach my job with a category view and preach to my colleagues the value of whole store context. Ambient departments have shrunk over the last decade in the dash for non food space and now they are losing space again, this time for fresh. I honestly believe this is wrong for shoppers and contrary to the two-nation trend which is polarizing shoppers into discount and choice camps. Ambient Space can take a certain amount of squeeze – items added to a range to deliver choice tend to be in smaller packs and all but the biggest unit volume products could benefit from smaller case collations to improve space efficiency on shelf. However, in many medium sized stores, losing more space could see more shops heading towards the core. And the core is where the discounts happen and price competition is the most fierce so any gains made on fresh and quickly lost when you add up the potential profitability of the full basket.

To be fair, I have seen some ideas creeping in. Tesco have introduced their goalpost kit into the cooking aids aisle to highlight Herbs & Spices, while Sainsbury’s clever hanging boards with icons indicating locations of the most sought after products, such as eggs and tomato ketchup. Other ideas have not been such a hit – Asda’s “New” bays have been touted around for some time, but unless you have a reliable pipeline of guaranteed hits in a category, they rapidly become a dumping ground for secondary promotions and detract from the aisle as a whole.

The solution in Health & Beauty seems to have been to tap up the big-money suppliers and let them run wild with branding and imagery. I don’t believe this is the right solution for ambient grocery either, but giving the department more personality does have legs. Every category has something unique – this should be celebrated, as should some of the incredible product innovation that has come through over recent times. Home Baking is a great example of this – Asda now have an incredible range of baking products which has actually ousted Toys as my kids’ favourite part of the shop. Shouldn’t they be shouting about that? They’ve got the converted recycling bins full of ice and covered with POS telling us all about how great their fish in – shouldn’t there be some similar inspiration to get people down one of the most unloved aisles in the store?

Even “ethnic” food areas are selling themselves short. POS is used by all the big 4, but it’s very functional and targeted specifically at the ethnicity the food comes from. I was passionate about breaking ethnic ranges out of their target – what foodie of any ethnicity wouldn’t be excited about getting their hands on genuine foods? My Line Manager at Asda thought I was mad for trying to get proper Balti pans into all my stores – yet, my friends were bemoaning the lack of good pans!

I know I’m not a typical shopper – 20 years in retail have destroyed any chance of that – but less geeky friends share my views. It’s all very well getting blown away by a stunning entrance full of gorgeous looking fresh veg and counters. But what about when you turn the corner and start filling your trolley? That’s the missing part – kudos and profits to the retailer to gamble and invest in the dull stuff!

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