As grocery floor space diminishes, where does that leave natural and organic brands? ThirdChannel commits to bringing actionable tips to make the most of your in store presence during the ups and downs of the market.
The past few weeks have been tumultuous for the grocery industry - and specifically for the organic grocery industry. Earth Fare announced February 3rd that they will be closing and liquidating all 50 stores, unable to restructure their existing debt. This follows similar closure announcements from Kroger-backed Lucky’s Market and New York-based Fairway Market. Less store space means less in-store visibility of products, and opportunities to compete in massive organic foods sales market that hit $52.5 billion in sales in 2019.
Where does that leave organic brands? The default response is that grocery shopping is moving online to platforms like Amazon Fresh, Thrive Market, Shipt and Instacart - followed by buy online, pick-up in store services. In reality, less than 3% of Americans purchase groceries online. It’s simply not as common as purchasing electronics or apparel online, and doesn’t seem to be experiencing much growth.
Instead, 88% of shoppers purchase in a traditional supermarket whereas 40% of those shoppers purchase from more than one retailer. By comparison, only 16% of those shoppers use buy online and pick up in store services, and those purchasers are limited to very dense urban areas. Numbers show that in-store is still truly king when it comes to grocery shopping. At any given time, 1 in 7 of American adults are actively grocery shopping.
Even with floor space decreasing, there are plenty of untapped opportunities for new and existing brands to convert shoppers to customers, particularly as the average grocery store shopping trip has risen to 41 minutes as younger generations spend less of their income on eating out, preferring to cook at home, according to Statista. Plus, selling opportunities aren’t limited to food items, but also easily encompass non-food items, like organic skincare and household cleaning products.
To be competitive, a brand needs to consider its in-store presence. How do marketing materials look? Are items attractively displayed to catch a shopper’s attention? Are shelves fully-stocked with products? Where are items displayed on the aisles - and are those products capturing the right attention? These may seem like small data points, but it is a level of visibility that hundreds of brands do not have in thousands of doors, making assumptions that the retailer is giving their brand requisite attention - when in fact Whole Foods has many recent reports of empty shelves due to supplier issues (with the bigger question of whether everything has been pulled out of back stock).
The ThirdChannel Blog, Mind the Store, will feature more in the coming weeks on what brands can do in grocery retailers to capture a market that is rapidly growing, and the sales that come with it. In the meantime, click below to read previous posts where we talk about tips for how data insights can dramatically level up sales and tips on the best kinds of in-store demo programs.