June, 2007

Research Perspective and Comments & Analysis

Reach Out And Touch Someone

Because of my line of work, food shopping is not a chore. I enjoy seeing how different produce retailers can offer similar wares, and I try to intuit shoppers’ decision-making as they shop one display but bypass another. I also watch retailers’ staff at work.

Back home, we shop a few stores in our area. We frequent the same stores because of their location and the service we receive, in addition, of course, to their variety and high-quality offerings. Those stores are rewarded with my family’s repeat business.

After focusing on topics involving current events such as food safety over the past few months, Produce Marketing Association’s (PMA) latest consumer survey returned to a topic near and dear to me because it can make such a difference to sales: customer service in the produce department. In late March, Opinion Dynamics Corporation surveyed 1,000 primary shoppers for us by telephone on this subject.

Shoppers generally have a favorable opinion of the service they receive from their local supermarket produce department, although there is plenty of room for improvement. Sixty-four percent positively rate the service they receive; 34 percent give the highest possible rating. While some readers may be satisfied with those numbers, I see much opportunity to better satisfy customers. And that means increased produce sales.

For customers to be wowed, they must first be “touched” — by product offerings or by service or, preferably, by both. When asked what characteristics best define a good produce department experience, shoppers point to the people as well as the produce. They most highly rated product freshness, variety and selection, department cleanliness, staff courteousness and low prices, respectively.

When asked to tell us what they look for from produce department staff, our respondents ranked staff’s knowledge of freshness, produce in general, quality and availability as most important. Shoppers who give their produce department service a neutral (21 percent) or negative (8 percent) rating similarly echoed the same sentiments. They reported they want improved service, better selection/ variety, fresher produce, lower prices and better quality — but apparently they aren’t getting it, unlike their fellow respondents who gave us a positive rating.

Perhaps one reason produce retailers don’t earn stellar marks for service is because most shoppers don’t interact very much, if at all, with produce staff. Almost half of shoppers surveyed reported they have no contact at all with their produce department staff. Meanwhile, only 17 percent reported some degree of contact and less than 10 percent report they have a lot of interaction.

Isn’t it strange that the produce department, the place where stores have the highest level of “high touch” in product offerings, often does so little to reach out and touch its customers? Why do we allow so many of our employees to work with a focus on the shelves, avoiding eye contact with customers, intent mostly on stocking, not on selling? Why do we settle for mediocre performance in selling products whose sales can be driven so much through proactive customer service?

Touching customers has both intangible and tangible value. Our research shows that it not only helps promote customers’ loyalty and goodwill, but it also has a very real impact at the cash register. Almost half of shoppers who have some interaction with staff report they are “somewhat” to “much more” likely to buy more fruits and vegetables based on that interaction. If our retailers can engage a fraction of those shoppers who said they had no contact with produce department staff at all, they will foster customer relationships that can also be measured in dollars and cents.

Our survey looked at one particular touch-point opportunity: taste testing. While consumers typically report that taste is the most important reason they buy fruits and vegetables, many of our shoppers (64 percent) report their stores don’t offer taste-testing. The shoppers also told us tastings encourage them to increase their purchases. Among those who do have access to tasting, 55 percent report they are somewhat to much more likely to buy more fresh fruits and vegetables when tasting is offered.

Just as importantly, even those who don’t have access to taste-testing said they would be more likely to increase their purchases if tasting were offered. In addition to reducing the risk consumers may feel about buying a produce item new to them, taste-testing gives produce department staff an opportunity to connect with their customers about any and all things produce. Anyone who eavesdrops on tasting conversations, as I do, knows how often shoppers seize that opportunity to approach staff with other produce questions. A bond is built, a relationship created, a value added. Suddenly we’re no longer just in the commodity business.

An investment in customer service training and produce education can pay for itself in short order through higher per-trip sales and return business. Savvy retailers know this well, and best-of-class stores are living proof that customer interaction and taste-testing are activities with a very definite return on investment. I encourage retailers who want to equip their produce staff to deliver a higher level of customer service to contact PMA’s education department for assistance. We are now developing some new associate training tools designed to meet this specific need; stay tuned for more information in the future.

Solutions Go Beyond Staffing

It has been said the difference between elections and capitalism is that while elections will tell you what most people want, capitalism will tell you what people want most. Thus we confront a limitation on the power of consumer surveys that, roughly speaking, translates into this: The answer you get depends on the question you ask.

If we ask consumers whether they like uniformed gas station attendants who pump gas upon arrival, people may say yes. Whether they would patronize gas stations with that service — and a correspondingly higher price — is another matter entirely.

Questions about consumer satisfaction produce results that are as indicative of how low we have set the bar of consumer expectations as of how good a job we are doing.

The past 15 years have seen an explosion in the growth of low-service retail concepts such as warehouse clubs and super centers. Most conventional supermarkets have cut back on produce department man-hours, even as departments have expanded in both square footage and number of items carried.

This didn’t happen by mistake; the logical conclusion is that when confronted with real life choices, the great mass of consumers, whatever their abstract preferences, prefer low prices to more manpower in the department.

There are exceptions, of course. An explosion of high-end concepts, natural- and organic-based concepts, specialized ethnic concepts, new convenience-oriented concepts and more indicates a substantial market for high-service concepts — but we shouldn’t kid ourselves. Fifteen years ago, there weren’t 200 stores in the whole country we would recognize as a super center; today there are over 3,000. The tens of millions of people voting with their dollars in those stores every week are telling us something.

It is often easy to forget about these stores as their basic approaches are boring. They don’t get cover stories in trade magazines and seminars and workshops at conventions and industry functions. How much more interesting to profile the retailer growing his own herbs hydroponically in the window and featuring a juice bar with 200 produce items grown on the roof!

Now the research reminds us of something important as well — that people react to being “touched.” The mistake all too often made in the industry is to think that the only solution is more staff, and since they rarely get the budget for that, the retailers do nothing.

For 19 years, Produce Business has produced an annual special report entitled The Mystery Shopper Report. We send undercover sleuths into departments across the land and ferret out what actual consumers experience.

Some stores do an excellent job, yet, by and large, 19 years of experience studying these reports teaches us staffing has severe limitations as an answer to this problem:

First, very often staff is not there. Many stores are now open 24 hours, and during many hours, the stores operate with a skeleton staff or no dedicated produce staff at all.

Second, even if staff is there, the number of hours in the department is so low it is all they can do to keep the shelves stocked. Managers increasingly complain they have no time to train or manage because they, themselves, have to replenish all day long.

Third, there can be a language barrier. If the clerks don’t speak the language of the customers, it is hard to get quality interaction.

Fourth, the quality of interaction is irregular. Over the 19 years of the report, we have received wonderful spot-on information and horrible, incorrect advice that could even damage people’s health if it were followed.

It is wonderful PMA will offer new training tools. Of course, we need to train our people better. Yet we also need to look at alternative means of interacting with customers.

In the age of the Internet, why rely on an associate’s memory of a particular product or the best advice for someone looking for something specific? There is something almost bizarre that every supermarket does not have available for customer use, both in store and at home, all this information, plus recipes, nutritional data and more.

Getting the customer to taste the product shouldn’t depend on the happenstance of a consumer interacting with an associate and asking for or being offered a taste.

Sampling and demos have always been hindered by the commodity nature of produce. Retailers have tended to rely on vendors to offer free product for sampling and demo and often to pay for the staffing, insurance and other expenses. Some retailers have even made doing demos a kind of profit center.

Many of these in produce have been paid for by ancillary product vendors. Why? Simple — a salad dressing is a unique product and consumers are likely to look for the brand if they really liked that particular dressing.

On the other hand, apple shippers were hesitant to pay for demos because they have no way of knowing if the store will carry their product next week, and consumers are unlikely to seek out a particular trade brand.

We are at the threshold of a new day in marketing produce. Retailers need new varieties and packs to distinguish their stores from competitors; shippers are producing proprietary items to prevent being caught up in an oversupply of commodity produce and to capture the value of promotional expenditures.

Together, retailers and vendors now have interests congruent enough to join together in an aligned supply chain to provide consumers with intriguing and exceptional product. Add a little technology to the store, upgrade training to capitalize on this plethora of product, and we will touch enough to get them reaching for their wallets.