The Retail View: Lessons from COVID-19
While the COVID-19 pandemic presented many challenges to the retailing of fresh produce and floral products, the important role flexibility plays in the sector might have been the biggest learning from this consequential year.
That was one of the takeaways when three Southern California supermarket executives participated on a retail panel webinar sponsored by the Fresh Produce & Floral Council on Feb. 18. The panel consisted of Bristol Farms Director of Produce Paul Dziedzic, Vallarta Supermarkets Floral Director Paige Venable and Produce Sales Manager Ryan Sanchez of the more than 300 Albertsons and Vons stores in Southern California. The trio represented a diverse cross section of the area’s supermarket industry as Bristol Farms in an upscale retailer with 14 stores, while Vallarta’s 52 stores skew heavily toward the Hispanic demographic in the Southland, while Albertson/Vons expansive list of stores dot the landscape virtually covering every sector in the community.
“This is a change business,” said Venable.
She noted that when COVID-19 first began impacting consumers, leading to shelter-in-place orders, Vallarta’s floral sales plummeted almost overnight. She cut way back on SKU’s and watch the business that she has built at Vallarta in her three year’s there evaporate. Quoting her boss, she said it was like painstakingly building a sandcastle at the beach and having a wave knock it over in an instant. As Mother’s Day approached in May of last year, Venable said sales started to build again and they have been climbing ever since.
She indicated that they key to Vallarta’s success was adapting to the change. She concentrated on the top five sellers in each category, adding that the 80/20 rule defines floral sales: 80 percent of sales come from 20 percent of your products. “We went back to our ‘A’ game and merchandising 101.” In-store, Vallarta emphasizes, great signage, great displays and offered the products at a great price.
Venable said there is no substitute in the floral game for offering a product at a great value that makes people happy. When it delivers, they come back and buy it again.
Dzeidzic said the key to success for Bristol Farms when the pandemic hit was to implement the plan it had devised to make sure it a continual supply of products that customers wanted to buy. Because the pandemic seemingly made people skittish about shopping and searching for that perfect fruit or vegetable, Bristol Farms greatly enhanced its packaged produce offerings putting as many things that they could in bags and expanding the ready-made section. He said produce items associated with good health such as ginger and garlic flew off the shelves but so did old-fashioned staples like bagged onions and potatoes. “Almost anything in a bag sold well,” he said.
Over the past years, the Bristol Farms executive said the retailer has carried SKUs that it had never carried before and has greatly enhanced its in-house tote bag program, as well as the value-added products chopped and wrapped in the back room. “We have sold 10 or 20 times more produce in tote bags than we ever did before.”
He mentioned that even a tropical promotion featuring lychees in a tote bag resulted in huge sales gains. “Lychees promoted in a tote bag brought in $20,000 in just a couple of days,” he marveled.
Sanchez agreed that it was executing a solid plan that allowed Albertsons/Vons to keep its produce shelves stocked. The produce team expanded its supplier list and tried to anticipate and accommodate the needs of its customers. He said bagged products were great sellers and mentioned that for the first time the chain started offering bagged nectarines and peaches. It was such a hit that they added the offering to their daily lineup. He added that organic produce sales skyrocketed as did anything with vitamin C and everything with an immunity connection. “Potatoes sales were off the charts,” he said.
All three panelists agreed that there are challenges when dealing with ecommerce but also agreed that those sales will continue to increase. Sanchez said the online orders for Albertsons and Vons are still increasing and he expects that they will continue even beyond the pandemic when many people come back to the stores. He said consumers are buying into the concept and that won’t go away.
Dziedzic concurred, noting that even almost a year later, online sales continue to increase each month. He said the selling online occurs around the clock and if you check out a Bristol Farms in the morning, the aisles are filled with Instacart shoppers.
Venable said that shopping for groceries and floral online is a “natural extension of the Amazon world” we live in. While older shoppers might have been slow in embracing ecommerce, they have adapted and Vallarta’s sales continue to climb using that platform.
The online sales make it difficult to capture impulse sales, which are such a huge part of produce and floral on a daily basis. But the trio of speakers agreed that it is merchandising 101 in the store and online that helps generate those sales, even during a pandemic. “You have to make sure what you are offering online is exactly what the customer is going to get when they come to the store,” said Venable, who added that for a supermarket floral shop “all of our sales are impulse buys.”
Dziedzic indicated that the online platform can capture some impulse buys by making suggestions to the shopper as they move through the list of products. If a user clicks on a product that isn’t in stock, apparently the online program recommends an alternative.
Venable, Dziedzic and Sanchez acknowledged that they have learned to adapt to online meetings and presentations with suppliers. And Dziedzic admitted that working from home on occasion and not fighting the Los Angeles traffic is a plus. But they also agreed that they miss those personal connections.
“I’d go back to face-to-face meetings yesterday if I could,” said Sanchez. “You can’t replace that.”
He said this year has proven that you can get by with those video calls and he expects that they will continue at some level beyond the pandemic. “We have learned we can do that, but let’s get back to face to face as soon as we can.”
Dziedzic said it is not only supplier presentations that have been sorely missed but tours of grower operations. He said that is an excellent way to familiarize Bristol Farms’ produce people with the local fruits and vegetables that they sell. “We haven’t been able to do that. That’s a huge loss for us.”
Venable looks at those face-to-face meetings at trade shows and luncheons as an important part of who she is. “There are people I have done business with for a long time and they can send me a photo and a price and I can give them a yes or a no,” she said. “But I am eager to get back and visit with those people who have embraced me and raised me in this industry.”
The panelists also discussed the future of the retail industry and what supermarkets might look like a decade from now. Each of them agreed that having a dedicated hub for online shoppers is an idea that has great value. Dziedzic also envisions a hybrid store that offers fewer SKUs concentrating on the top sellers when it comes to produce. But he also said larger stores that offers great variety and big displays will also continue to be part of the landscape. He also likes the idea of drive-thru windows for supermarkets, which have started to appear during this past year.
Sanchez likes the hub idea but he believes that online shoppers might also be accommodated in a special area dedicated to them in each store. “We might see larger stores with smaller sales spaces to accommodate a fulfillment center within the store,” he said.
Venable went back to her answer at the very beginning of the panel discussion. “This is a change business. In our industry there is change all the time.”
She indicated that it is those who can adapt to the change that will survive whether it be drive-thru windows, ecommerce hubs or hybrid supermarkets.