A new approach to industry data along with a focus on helping customers address their lifestyle needs is the key to success with general merchandise and housewares in supermarkets, said a food retailer’s panel at the 2013 International Home + Housewares Show. Moderated by Todd Hale of The Nielsen Co., the panel discussion, at the core of the Housewares and Supermarkets: A Profitable Pair seminar, included Steve Davis of Weis Markets, Bill Anderson of H-E-B and Dewayne Rabon of Bi-LO Winn-Dixie.
Each of the panelists had a take on what’s required for successful housewares operations in the grocery store channel.
Before the discussion, Mark Deuschle, vp, business development/chief marketing officer for the Global Market Development Center, detailed research methodology developed to better delineate grocery shopper attitudes toward purchasing general merchandise in supermarkets.
“There was a lack of data around this issue, and it got in the way of the industry being able to collaborate and gain an understanding of what matters to consumers,” Deuschle said. “We conducted research to find out what is going on in this category. How big should the category be? How much space should it garner in a supermarket? Is the mix of items okay, and how does it impact the shopper basket? With our research, we discovered that no two retailers actually looked at general merchandise the same way.”
GMDC connected the research with Nielsen Co. and developed a hierarchy of housewares product SKUs, Deuschle said.
“There are 18 megacategories for 30 million SKUs. This data hierarchy will serve as a backbone for the industry to make informed decisions on housewares,” he said.
The supermarket panelists commented on the need for data as the basis of sound decision making in housewares operations.
“It’s critical,” Rabon said, “as we need to understand the competitive landscape, but at the end of the day, there’s one customer with money to spend. We need to know what that customer is doing, of course, but we are starting with the common denominator, which is the customer.”
Davis said, “Execution is more important than benchmarks, but you do need the data. With these new data sets we can understand the gaps: What is the guy down the street doing that is so successful? But if you don’t have execution and the best plan in place, you can’t be successful yourself.”
Hale noted, “A big part of the story is general merchandise gets lost in a supermarket, yet it contributes greater profits to a supermarket.”
He stated that, although the U.S. economy still is struggling, positive signs have emerged including an improved housing market and the growth of e-commerce.
“E-commerce is the big winner in the economy,” Hale said, “It’s going to drive the compound annual growth rate between now and 2017.”
From the broad food retailing perspective, supercenters will drive growth faster than ever. In the cross-channel overview, hardware stories, apparel stores and office supply stores will decline in share of market, he noted.
“Fresh food is everywhere, and it’s profitable,” Hale pointed out, adding that, when it comes to sales, top growing categories in 2012 included wine coolers, canning and freezing supplies, liquor, vitamins, coffee, feminine hygiene, cosmetics and tea.
“In 2013, I predict that fresh food will continue to drive sales,” he said.
Hale asserted that smart merchandising can connect housewares with growing food categories, and, so, help the category get a lift from market trends.
“We need to look at mixing up the store to drive more engagement with shoppers. We also need to give them solutions. Why make the shopper walk around the store so much? Why not cooking utensils near where the meat is sold?” he observed
Davis, of Weis Markets, said, “We are doing that, with things like having soup bowls next to the soup.”
Bi-LO Winn-Dixie’s Rabon related, “We are trying to make it easier for people to cook at home and have fun. The home meal experience touches many product categories.”
H-E-B looks at housewares as part of meal solutions that simplify life for its customers.
Anderson said, “I think that the customer looks for solutions to problems, and as a food retailer, if we are not providing solutions, then shame on us. We have a great shot of capturing a market, and that gives us optimism and hope as people spend more time at home.”