When we set out to do a “sneak preview” piece on Lisa Cork’s upcoming presentation at The Amsterdam Produce Summit, we found her simply bursting with ideas and experiences.
So much so that Pundit Investigator and Special Projects Editor Mira Slott divided the piece in two!
Part I focused on Big Picture Issues regarding Omni-Channel retailing and the produce supply chain.
You can, and should, read the whole thing here:
AMSTERDAM PRODUCE SUMMIT PREVIEW PART I:
Branding and Packaging Expert Lisa Cork Takes Deep Dive Into Omni-Channel Retailing And The Prospects For Fresh
Now, in Part II of this “sneak preview” piece, Mira and Lisa have a deep-dive discussion into the real issues, practical problems and enormous opportunities that lay ahead:
How can retailers use fresh produce to make their omni-channel efforts more successful?
How can the supply chain profit in this environment?
How does the “long tail” of the Internet work with perishable products?
Does perishability make Omni-Channel Retailing a big winner over digital-only solutions when it comes to produce and, more broadly, fresh foods?
Here Lisa gives us a keener perspective on what she will be presenting in Amsterdam:
Fresh Produce Marketing
Auckland, New Zealand
Q: In store, retailers are limited on space to hold inventory versus the unlimited amount of “space” for inventory online. Will the future of produce industry become more niche, where a consumer wants Cotton Candy grapes in the same way as a unique book? Could the consumer pre-order and get the product when it’s available?
A: This is a great question, and I am not sure I can predict the answer yet. With fresh produce, unlike other CPG, our industry has the challenge of perishability and seasonality. So the potential answer to the question may depend on the online distribution system.
Let’s use Instacart as an example. I recently went ‘online shopping’ in Austin. Instacart gives me access to HEB, Central Market, Sprouts, Costco, Natural Grocers, Wheatsville Co-op, Sams Club, Whole Foods and Randalls. These are all brick-and-mortar retailers that are using Instacart to give them an online ordering, store pickup or home delivery offer.
Q: Are consumers less likely to be loyal if they can have online access to all these stores?
A: I don’t think so. There will always be shoppers who swap – but they are not the norm. For the foreseeable future, average consumers are still going to shop at offline stores and will continue to support their favorite store. If they are happy with the produce quality offline, then they may feel better about trying to buy produce online. Produce is not easy to compare across channels and, as mentioned above, trust is a big deal, so I still predict loyalty within Fresh.
Center-store, however, where every box of Wheaties looks and is the same… look for loyalty here to erode as consumers can easily price shop with the swipe of a finger. This is where the multi-retail availability via Instacart might be making some CPG brands nervous.
Think this through… In a case where it is fulfilling its online orders through product being ‘picked’ at store level, the store may actually be able to offer more fresh produce variety online because it is selling its fresh produce via two channels – offline, where shoppers are coming in to the store to buy, and online, where shoppers are using Instacart to buy from a specific store. With two chances to sell, one can argue the retailer can keep product fresher and quality better because any sub-standard product could be discounted and sold at the offline store.
Q: Are offline stores willing to sell substandard product? Also, could you elaborate on how this results in selling more variety online versus in-store?
A: From what I have heard from suppliers, online retailers would love to sell more fresh produce varieties. But there are complicated logistics. Bigger producers want to ship pallet lots – not a lot of mixed boxes, which is what online can require. Given online sales of fresh are still quite low compared to offline, this can be challenging.
For now, I see stores with an offline presence being more successful at offering perishables than online, even though this is a space online really wants to be in – it is their MO. It’s currently just more challenging in fresh. In the future, the Ocado model of full automation may make this more possible, but does it remove the burden on the large volume growers to change the way they sell fruit?
The situation is quite different for a store working off a DC model. Here, there is less foot traffic. Here, there is no discounting poor quality, and unsold product turns into waste.
For a brand marketer, this is where the brave new world becomes reality – how are you stimulating awareness and demand for your product? How are you manifesting your brand online? Who are you targeting with key messages and what buying channel options are available to them? How are you building preference and trial?
To be a proactive, fresh produce brand marketer in omni-channel retail, target market and strategy will be critical because most brands won’t be able to afford to target everyone. Choosing partners, choosing channels and choosing targeted consumers who will have a propensity to buy and that you can reach given the budgets you have will become key influences in marketing decision-making.
Q: Could you provide examples here?
A: There is a chart I often show when I speak or lead workshops. It compares demographics across the five current segments, from the silent generation (1930’s) to Gen Z (2000+). It covers points like attitude, communications media, formative experiences and more. It is such a great tool for showcasing the huge demographic spread marketers face. To me, being proactive is about understanding who you are as a company, where you want to be and how you want to show up. Are you an edgy, front-end-of-the-curve company? If yes, then which target segment do your values align with?
If you are open to your marketing being edgier, your story telling being bolder, then your best match might be Millennials – and the best way to get to them might be bringing your edginess to life via an innovative fresh product. Look at Mann’s Nourish Bowls or Eat Smart’s Superfood Salads. These used to be bulk veggie companies that have reinvented themselves.
Are you more corporate/conservative? Do you like the status quo and don’t want to be disruptive? Then maybe you’re better off focusing on offline retail and a more diverse demographic target market.
The produce industry has real innovators, and the produce industry has companies that really don’t want to see change. Knowing who you are is important to figuring out where you want to be and who you want to target.
Q: For retailers, could you offer ideas/examples of how a store could use its online capabilities to market/brand itself and integrate channels? For instance, maybe retailers could have side signs in store: “Here we have wonderful apple varieties” … “If you’re looking for more specialized varieties, you can go to our online website”.
A: I think the bigger opportunity for retailers is cross-merchandising and upselling online. FreshDirect.com in the USA does this very well. Search for fresh strawberries at FreshDirect.com, select a punnet, and before you click and add it to your cart, a cross-merchandising offer pops up alongside the strawberries for Greek yogurt. Or search for avocados and get a deal for limes. The opportunities for this are limitless and inexpensive to set up.
Q: But Fresh Direct can’t capitalize with a brick-and-mortar upsell… are they in danger with new omni-channel competition?
A: I don’t feel that they are. Right now, even if offline retailers have added an online component, they are still mainly offline-focused. So important aspects such as shopper-centric store layout (not department-centric), cross-merchandising, meal solutions, etc., haven’t changed much. Whereas online retailers like FreshDirect.com are very good at what they do. I think they have a slight advantage in an area like cross-merchandising or upselling because they make it so easy – and across so many categories… and not just fresh.
There also is an emerging technology called ‘shoppable content,’ which has real potential for food. It is being used by Tesco currently and works like this: Say you are scanning a meal idea or searching the site for dinner inspiration. You find a recipe you like, great photos, easy to make. Rather than add each recipe ingredient to your shopping cart one by one, shoppable content means the entire recipe can be downloaded into your shopping cart in one click. This has real potential for food and fresh produce brands.
In China, influencer marketing is used to drive online, channel-specific retail sales. KOL’s (key opinion leaders) do live stream video selling and share links to retail channels where the product can be bought online. I have direct experience with this for a client where we saw the results of a KOL live video stream on Taobao increase the fresh fruit product’s sales by 30% within 24 hours.
Q: This is very interesting. Could you explain a little more?
A: Basically, we wanted to test KOL influencers to see if them talking about, promoting the brand, doing tastings and recipes of my client’s product, and then providing a sales link to an online retail channel where shoppers could order the fruit for delivery, would boost sales. It absolutely did. We were promoting some unique angles, a purity and origin story, and then KOL’s were biting into and commenting on the taste of the product. It was a winning combination and something I would repeat again.
As online retail and social technology intersect and become interlinked, fresh produce can expect to see these types of direct sales strategies used more and more.
Q: On the supplier side, in stores such as Costco, they can fund sampling programs… produce companies will align with a salad dressing company, for instance. In retail, location is one effective way to market your product. What can be done when the consumer can’t physically try the product?
A: There are several ways already being used to encourage trial. The cross-merchandising idea mentioned above presents a good opportunity to get new products in the basket. It is like an online version of your salad dressing partnering idea. Someone adds salad dressing to their basket and up pops a cross-merchandised offer for a salad kit. Or someone adds a pie shell or cream to his or her basket and up pops an idea for a fresh fruit pie or fruit and cream.
Shoppable recipes will be another way in. Imagine a pasta using a special type of gourmet fresh tomato. The consumer loves the recipe and adds all the ingredients to his or her basket.
There has also been a range of creative ideas already tried. I understand the pear industry did an online promotion a few years ago where if consumers added an apple to their basket, there was a pop-up ad that offered them a free pear to try. Once the consumer said yes, the pear was added to the basket and there it remained. From what I heard, this had a positive impact on sales as a way of encouraging trial without the need for in-store sampling.
Q: Do you have any social media branding/marketing ideas? Impacts with Instagram, etc. How has technology changed produce suppliers’ ability to brand/market their products?
A: I’ve spoken a lot about brands taking control of their online presence. Even if they are not yet fully selling successfully in an online sales channel, they need to be thinking about their brand in an online world.
The good news is social media enables a brand to own and control their own marketing and brand voice. And, many social channels are now becoming ‘shoppable.’
In fashion and in CPG, brands are using their social channels to sell. Tagging, shoppability and other emerging technologies now make this more possible than ever, and it is the best of both worlds, with full margin sales plus sales control and live shopper data.
In China, brands are using social channels like WeChat to sell both via their own micro store front and via community selling.
Look for more social channel selling and for perishable products like fresh produce, look for links tying together a brand’s Instagram account or WeChat presence with an online, direct buy, sales link.
Q: Should there be a special focus on packaging especially for delivery for things people have ordered?
A: One of the lessons learned from reading AmazonFresh.com customer reviews is that there is still a big gap between buying a fresh product online and having it arrive in pristine condition. It’s frustrating to think that a produce company can invest months in growing a fresh fruit or vegetable for consumption, only to have it be ruined or damaged in what the industry calls ‘the last mile’ – which is getting it from the online outlet to home. One of the areas we are exploring in terms of full online service provision around branding and packaging is the opportunity to create more specialized packs that help ensure a fresh product’s arrival success on the doorstep and influence a positive ‘unboxing’ experience.
Of course, the challenge with this is the packaging required and where this sits within consumer opinion about plastics and packaging. For the moment, there is no immediate solution. Within my team, we are already preparing to create and design different packaging for offline vs online sales channels in the future.
Q: Often when buying produce online, people will be buying blind compared to in-store where the product is tangible. Amazon and Fresh Direct, for example, have online produce ranking systems, of what’s in season, the freshest, and ‘honestly this isn’t really good out of season but it’s here if you need it for a recipe’ … Do you think this is a good idea? Will that raise consumer expectations for transparency in other channels, such as in supermarkets, which don’t have ranking systems?
A: As Ocado has done in the UK, fresh food (including fresh produce) can be done online successfully. It requires significant supply chain technology and distribution control. Many would argue the USA is not there yet, but it will only be a matter of time.
For now, in the USA via the websites you list, quality indicators provide some degree of information. But I would query how much they are used and how much they influence purchasing. Are shoppers actually buying one offer of blueberries over another because one is 5-star freshness and the other is 3.5 stars?
I think what’s missing is guidance around taste and flavor. As an avid reader of consumer comments on AmazonFresh.com, there are so many posts that deal with shopper disappointment regarding taste and flavor. ‘Flavorless grapes’, ‘floury apples’, ‘tasteless strawberries’ – these are regular comments.
The thing is… comments about poor tasting fruits and vegetables are not new… they are now just more visible. And this is a great thing for our industry!
In the past, if you bought grapes from your local brick-and-mortar and took them home and they were tasteless, what did you do? You suffered in silence.
Q: Or never bought them again or switched supermarkets…
A: While yes, all retailers had return policies… but after two days of them sitting in the fridge and with the receipt thrown away, did you really ever know anyone who took them back? How long did it take you to buy grapes again?
What online is giving us now is transparency and feedback. Yes, it is still rudimentary. Yes, the system is not perfect when a negative comment that is three-years old is voted as ‘helpful’ is allowed a better position than a positive comment one week old, but the good news is now we are getting consumer feedback.
No matter how fancy technology gets, no matter how much innovation disrupts our industry, taste remains king. Empowering consumers to buy or not buy based on crowd-sourced taste reports has the potential to be a game-changer.
Q: Suppose a consumer gets something on line and really likes it. Is there something that can be done with branding to make them order in future?
A: Yes, and this is an area my team and I are putting a lot of thinking into because it crosses over brand, packaging and voice. For example, for future online pack designs, we are starting to evaluate putting voice-based action cues on pack. This could be in the form of a sticker or a call to action on the pack itself: “Love my taste? Add Stella Bella to your list.” Or “Love my taste? Ask for Stella Bella grapes by name.”
Q: That demands a new way of thinking when coming up with brand names…
A: In the world of voice ordering, clever brand naming becomes even more important. I have recently been introduced to ‘Stella Bella’ grapes. They were beautiful, and I love the fact the brand name rhymes. I can see myself remembering the brand and being able to ask Alexa for them by name: “Alexa, order more Stella Bella grapes.”
Sticking with the grape analogy, there is where unique IP varietal names come into their own and by intent or default, the grape category has done this really well. Cotton Candy grapes are both visually memorable and easy to say. “Alexa, order me more Cotton Candy grapes.”
Q: If you are selling something blind to consumers, are there different standards for branding? What should be done in terms of branding and marketing to make consumers satisfied with their purchases, especially when produce quality and varieties can fluctuate through the year?
A: This question gets to the heart of a key issue I have not yet spoken about – which is the loss of control experienced when a producer sells online via a channel not their own.
Here is a classic example: About five months ago, I was researching cut fruit online. I wanted to see how processed fruit, which is often branded due to the punnet it is in, compared with fresh fruit in terms of consumer comments. What I found was alarming. For the branded processed fruit comments, there were many people who could not separate their recent bad experience from the brand nor did they recognize the online channel might have a role to play in poor quality. This is troublesome – especially when a brand does not have any recourse or any ability to respond to consumer comments via an online sales channel like AmazonFresh.com.
So the brand in question, which will remain unnamed, but suffice to say is a big brand that spends significant money on the brand, did not get the chance to defend the brand when shoppers reported poor quality product. Comments like, “I will never buy this brand again” peppered the page. And all the while, the brand remained voiceless and unaware these comments were being made.
This is where it comes down to control. At the moment, I am not seeing any fresh produce brands, big or small, exhibit much control of their online shopping presence. I am not seeing control of innovation in their online brand presence, I am not seeing any manifestation of their brand story or their brand differential advantage.
My gut feel is at the moment everyone is feeling their way and it is like a game of chess. An online retailer continues to purchase for its online and offline channels exactly the same as if the retailer were selling to an offline channel only, and as a result, the online descriptions, photography and brand representation are VERY GENERIC. As I mentioned above, this devalues a brand and sales are lost.
In the future, companies must have a deliberate online strategy and seek more control. A produce brand, especially one that spends significant budget promoting the brand, must control all touchpoints of its online presence. Until this happens, brands will forever be at the mercy of a retailer (much like they are in the offline world today).
Q: Every mode of purchase has advantages and disadvantages. How do you compensate in each? How can you create a holistic approach with omni-channel to raise sales to a new level?
A: Fill the gaps. At the moment, both online and offline challenges have opportunities and weaknesses. Ramping up the opportunities and strengthening the weaknesses are the keys to omni-channel success. So what does this mean?
Offline supermarkets: I think the way we merchandise fresh produce — which is the same way we have merchandised it since Piggly Wiggly created the first self-serve supermarket 102 years — is outdated. Does having whole watermelons, 18 varieties of apples that look identical and chilled cabinets that only have cut/chopped fresh produce salads and not meal solutions serve today’s shopper? Probably not — especially with today’s Millennial shopper.
What offline supermarkets do well is offer freshness and sensory options to explore. What they don’t offer is information that can influence purchase, whether it is this brand, story, origin or social/environmental credentials. Maybe it’s time to mix it up. With center-of-store sales starting to erode (thanks to increased online shopping for CPG goods!) I would love to see retailers tear down the departmental silos and create wholesale change in-store.
Q: In a PRODUCE BUSINESS cover story where we honored Sprouts with this year’s annual Retail Sustainability Award, we highlight how Sprouts flips the conventional supermarket model, putting produce in the center of the store…
A: I have not been into a Sprouts for a couple of years, but I remember produce featured big, with most of the displays still bulk-style. I did like their bulk bin concept though. They could be doing so much with that right now…
We need to change the entire silo strategy of supermarkets. I go to the U.S. as an observer now because I don’t live there day to day. Center-of-store is starting to change more rapidly because of online, but not the perimeter departments. I’m not seeing anyone embrace radical redesign. Let’s integrate and cross merchandise from a meal solution perspective, as opposed to categories of product that always have to be in a certain place. Where does that fit with the new emergent shopper; it doesn’t feel solution-oriented.
If you want to see what the future will look like, visit a Hema store in China, not because they are tearing down old retail – instead, they are building new retail. Focused on fresh foods, they use big displays, smart technology, retail theatre and in-store restaurants. In Hema, you can pick your prawns from the prawn tank and have them cooked at the in-store restaurant. When I was in Shenzhen a few months ago, I had the chance to see this in action. Fresh food was converted to shopper meals, right before our eyes. It was impressive. When I was in a Hema, in-store pickers were racing around. Hema will deliver product in 30 minutes…
Q: Supermarket buyers are segmented by departments and are protective of each department’s limited shelf space, and ultimately, which department will get credit for the product sale…
A: If you’re thinking of radical retail design, the money ultimately flows to the same place. It shouldn’t matter whose department it is; it should be about engagement and multiple purchasing. Why aren’t we actively collaborating? How many departments can a meal solution come into?
Traditional supermarkets are starting to feel old and outdated. In the future, arbitrary boundaries will not dictate. It’s really important for companies to look at themselves internally and ask, “Are we going to embrace uncertainty, or stay in comfort?”
Everyone is talking about turning retail brick-and-mortar into a more experiential environment. This is critical and such an untapped opportunity. But it does require thinking outside of traditional departmental structures and allowing things like radical cross-merchandising – which shouldn’t even be called cross-merchandising any more, as multi-department meal solutions should just be the norm!
Critiquing offline channels does not mean online is perfect. Online offers have strengths and weaknesses too. Case in point: During July 2018, a mock shopping trip on AmazonFresh.com showed there were 72 variants of apples available for me to purchase. 72! This wasn’t all varietal, but the offer was split across variety, organic/non-organic, and pack size. 72 choices! The more interesting fact about this online offer was: There was no information or buying guide to ensure shoppers purchasing could be successful with their purchase. This is a real missed opportunity. The information and knowledge are held by the apple industry, so why isn’t that knowledge guiding shoppers to success?
Q: What about saved shopping lists, and online retailer shopping suggestions based on past orders? Is there an argument to narrow the choices? Research shows, consumers gravitate to a few top brands online, and with mobile phones, the consumers gravitate to what comes up first on their search because of the small screen and time used to scroll down…etc.]
A: I think saved shopping lists better suit CPG/grocery items. I am not sure online retailing is far enough along for these to work well yet. Maybe for veggies, where there is less varietal variation, but fruit can be trickier. If you are a fan of Jazz apples, and it is the cusp between the seasons, are you going to not buy apples or just substitute? What would be amazing (and I know it will come) is the days when it can recommend a fresh produce item of a similar taste profile because that is loaded in the system.
So if you like Jazz and Jazz isn’t available, it recommends a Pink Lady or another apple that is a bit tart, not just any other apple. Regarding choice, I still think the perishability issue weighs heavy on online retail having too much choice available, especially when actual sales volumes are still quite low.
Right now, I understand supply companies have to ‘pay to promote’ and that the cost of this has gone up significantly over the past 2-3 years. C’mon Amazon – treat fresh as different and give the fresh produce industry a chance to partner with you (not just pay you) to increase your fresh produce sales!
Forever the optimist, I am hoping there will come a time when Amazon and the other online retailers treat fresh produce for the unique, sensorial, seasonal and perishable product it is. But don’t hold your breath.
Online also does not do a good job with brands. Brands appear to have little control of their online listing and, as a result, face being compared with more generic options in the absence of unique brand benefits. This is a killer. The more shoppers put generic, unbranded items onto their lists as they move into the world of buying fresh produce on line, the more branded produce will suffer the sales consequences.
As I tell my clients, one size does not fit all. Internal teams need to understand the strengths and weaknesses of all channels and create effective brand, packaging and marketing strategies specific to the needs of the channel.
Q: Where do you see the most promising directions for omni-channel in produce in the future? For instance, if ordering through voice-recognition, you can’t order something you don’t know exists… Could you discuss advertising/marketing to get the word out?
We also don’t know all the ways people are going to buy things in the future. For instance, in Chicago, the train stations have thousands of pictures of products, and consumers can use their smart phone while waiting on the train and scan a QSR code to order by phone. Kitchens of tomorrow, with RFID chips on items like milk in the refrigerator, reordering automatically. But there are limitations with produce, seasonality, perishability, much larger swings in prices in produce, etc.
When analyzing each of these issues in three ways — from the perspective of the retailer, the producer and also the consumer side — what are the most important takeaways for each?
A: The thought that comes to mind is, “the more things change, the more they stay the same.” In the fresh produce industry, we have struggled with moving beyond commodity and creating and owning brands. Yes, there is a cluster of big companies that do branding well, that allocate sizable budgets to brand promotion and are cutting through the commodity clutter.
Q: By capitalizing on clever social media approaches, could there now be more opportunities to build brand excitement without a large budget that used to be required for TV ads, such as Instagram and YouTube videos, etc., as you pointed out examples earlier?
A: It’s a misnomer that it’s not costly to do a social media campaign. It’s not to say a company can’t get major runs on board effectively with a YouTube video. If they get what their customers are looking for, they can serve up a brand story and get resonance and do that more cost effectively than a company that has a diverse product line.
Having just managed a 12-month social campaign in China across WeChat and Weibo (similar to Facebook and a Twitter/Instagram combo), social media may be ‘free’ but it definitely is not free! To do social media well takes investment – in tech, in recipes, in imagery, in tone of voice, in fan development, in engagement, in sales conversion and much, much more.
In China, I managed an agency team of 4, plus two of us on the client side. We invested significantly in both time and money. We all would love to go viral – to find the sweet spot and gain instant fame, but social doesn’t tend to work that way. Success is achieved by those companies that 1) know who they are as a company and as a brand; 2) know who their audience is and what makes both their heads and hearts tick, 3) can cut through the clutter to craft a message and create a personality that is true for the company as well as fans, 4) that have the budget and staff resources to do all of the above.
Just consider the stats: both WeChat and Instagram have over a billion users. Not all of these are business accounts, of course, but how do we get noticed in a sea of one billion? You gotta niche, niche, niche.
Equally, there are lots of other big companies struggling to find their way in a disrupted marketplace. These are the companies I am concerned for. The saying that comes to mind is, ‘Too big to be small, but too small to be big.’ For these companies, they cannot sit back and wait for the online world to work for them. They actually have to grab the opportunity themselves. I summarize it this way in advice to clients. To be successful in online selling, you need to:
Be branded and have brand control – regardless of channel
Be intentional – selling, marketing, branding and packaging for online and offline is different
Be willing to invest. Allocate some budget to future thinking and the impact on your business.
And this is just the beginning. These are more attitudinal things, but there are also more tactical actions companies need to do to be branded and successful online -- but let’s save the tactics for another article!
Let me close with this. I had a conversation with a very successful Chinese online retailer recently in Hong Kong. I asked him what it takes to get a permanent, branded sales link on their very successful imported fruit sales website. He was brutally honest when he said, “Look, your brand is simply not famous enough. Get more famous and we will give you a page.”
So there you go. One more thing to add to the list above: Be more famous.
Q: You’ve certainly given produce executives a lot to ponder in advance of the Amsterdam Produce Summit!
A: This topic energizes me. I’m passionate living this day in and day out. There are two worlds where I’m 100 percent integrated head, heart, and soul. The first is writing, where an entire day can pass, from the sun coming in and the sun setting and rising again, so filled with joy and completeness, I can write 8,000 words without even noticing in a transcendental moment. The other time is when I’m on stage. What you see is what you get when I’m on stage. I’m me and fully present.
Many thanks to Lisa for helping us think through such an important topic -- and for helping us find specific and practical ways to use marketing, branding and packaging to find success in the Omni-Channel Retailing future.
Come hear Lisa give the full story in her presentation in Amsterdam!
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