Selling food is changing. It is hard to find a food retailer who is not offering some form of on line shopping. It is incredible to see the pace of change since Amazon purchased Whole Foods. That transaction has really been a catalyst for change in the food industry. We know online shopping is still a small percentage of the market in North America however it is growing. A.C. Nielsen would tell us over 20% of consumers in Asia are shopping on line.
What does this mean for suppliers?
- Consumers are making the decision to buy very differently. They used to make the purchase decision in front of the category, at the shelf. Now they make it on a screen or even a phone. Space is limited and the display is not consistent with the store. You cannot change the retailer’s e-commerce execution. You need to explore how to get your product in front of the right consumers within their offering.
- Retailers will be using artificial intelligence (AI) soon, if they aren’t already. That means they will start to develop a profile of their shoppers and recommend a list to them based on previous purchase history. The benefit to consumers is saving time and they are creatures of habit so it will be popular. Amazon is so sophisticated in this area. We say they know what we want before we even know we want it. If you buy product ABC every 4 weeks they will start to add it to your list every 4 weeks. If you compete with this item your chances of persuading this shopper are very limited. You might be investing in ads or other promotions but never even get a chance to influence the shopper.
- Your promotion spending must change. Developing a relationship with consumers or end users is more important than ever. You need to create demand for your products. They must appear on those AI generated lists or consumers must have such a desire that they find them in store or on line.
This can all sound intimidating but there are some great tools and resources to help you build the relationship with consumers. It is an investment and one that needs to be managed regularly. Creating an email list or a social media following is only one step in the journey. Sometimes it helps to take a step back and figure out what a consumer is worth to you. If they buy your product 8 times per year and your profit on the item is 60 cents they are worth $4.80 per year. Over 10 years they are worth $48. Now you might be more interested in investing to build a relationship where they stay your consumer, regardless of whether they are shopping in store or on line.
Here are some tools and resources to help you get started:
Blue Cow Marketing
We are also having a webinar about this on May 8th, specifically for food producers and processors. Learn how to get going and what you need to do.
Three things for you to do today:
- Shop online for your products and others. Learn how to do it and try to understand if it is easy or hard to find your products.
- Make a list of the consumer relationship tools are you using in your business today and what they are delivering for you.
- Create an opportunity list for building the consumer relationships and put it into a 12 month calendar. Remember to create demand, not promote product features.
Bonus! Check out our resources here and sign up for our webinar on May 8th at 1pm EST.