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COVER STORY: Thought for food

There's a retailing revolution in bloom in the heart of North Carolina, where an interdisciplinary team of executives from Salisbury, N.C.-based Food Lion is busily trying to perfect a supermarket concept for the future.
Their strategy -- focusing on the consumer -- may sound a little cliched at first, but their methods are anything but trite. The latest in-store technology is here intertwined with the basic fundamentals of shopping. The aisles are arranged as "universes," in which products are grouped by commodity, and food and nonfood items are completely separated. To boot, all 264 of the store's planograms have been rewritten -- all with shoppers' needs in mind.

"Bloom, A Food Lion Market" is the name given to this pilot concept, which made its debut in May in Charlotte, N.C. and is still, ultimately, a work in progress, according to the concept's creators. Its tagline, "Thought for Food," only hints at the impressive amount of time and effort the company is investing.

For Food Lion, a unit of the Belgium-based Delhaize Group, such a retailing gamble is conceivable -- even on ultracompetitive territory that includes Wal-Mart, Harris Teeter, Winn-Dixie, and soon a Whole Foods Market -- because of its large size and brand recognition in the area. Even if Bloom doesn't succeed, the company will undoubtedly pick up best practices that can benefit all of its banners.

So far, however, every indication suggests that Bloom has been a hit early on. During a second-quarter investors' conference call on Aug. 5, Delhaize c.e.o. Pierre-Olivier Beckers said: "Sales, traffic, and customer excitement in the short life of the first Bloom store have exceeded our expectations. Although the Bloom experiment will consist of only five stores at the end of the year, we feel that the learnings from this very innovative store will be significant for Food Lion and the whole Delhaize Group."

Darrell Sapp, one of Bloom's so-called concept creators, whose expertise lies in merchandising, sums up the approach: "We may have created a revolution, but we're on a constant evolution in terms of what we offer."

The unconventional-looking Bloom store, located at the busy intersection of W.T. Harris Boulevard and Sugar Creek Road, is the first of five that Food Lion will test in the Queen City -- which, interestingly, serves as a fertile testing ground, since its surrounding demographics vary from college students to upscale bankers to small-town dwellers. This first unit is in a developing area near a university research park, where apartments, subdivisions, and, consequently, a growing number of stores and restaurants are being built. (Food Lion previously operated a conventional store in the area before it decided to put Bloom there.)

The Bloom format was conceived after more than two years of intensive consumer focus groups and other research led by a group of six Food Lion executives from various backgrounds, who were given just one guideline: Stay within the company's standard 38,000-square-foot footprint so that remodels would be doable. In fact, the first store is the only ground-up construction among the five planned so far. It's also built on the larger of two prototype footprints.

"We had no preconceived notions about what this store would be," notes Robin Johnson, concept creator-marketing, and team leader. "We spent the bulk of two years studying and building a fact base, looking inside and outside this country, and giving due diligence to what our industry was saying, as well as other industries."

One of the main themes that came through loud and clear, according to the concept team, is that shoppers want someone to take the chore out of grocery shopping. Whether it's illogical aisle layout or time spent in lines, consumers voiced their frustrations with the way traditional stores are run. They also said they need help answering the dreaded daily question of "What's for dinner?" Armed with these key insights, the group narrowed its focus to the theme of convenience.

Convenience first

But to really address shoppers' needs, changes needed to happen behind the scenes, Johnson and the others realized. "Taking hassles out of the shopping experience for a customer meant, in some instances, that we had to rethink how we're operating the store -- not just with the associates, but [also with] what's being merchandised where. The way we used to do it may have been efficient for us, but it wasn't necessarily logical for the customer," she says.

The group began to take a hard look at why supermarkets traditionally do certain things, studying which practices could be adjusted in an experimental environment. What they've come up with so far is a store that doesn't look dramatically different at first glance, but embodies significant departures from accepted practices and all adds up to quite a revolution in retailing.

The first change hits shoppers before they even enter Bloom; its outward appearance is more like a high-tech department store than a supermarket. "Some people have said they initially thought it was a department store," notes Johnson. "That's OK, though, because what we're going for here is an experience -- and, by the way, we're going to sell you some groceries along the way."

Once inside the store, that "experience" begins immediately with upbeat music and a minimalist decor based on baby blue, accented by an exposed 25-foot-high ceiling. Associates wearing cheery green polo shirts casually stand by waiting to answer questions and to direct curious shoppers over to a personal scanner station featuring 48 personal scanners -- an idea the concept team picked up from Europe, where these devices are now a commonly used service in retail.

Shoppers simply scan a bar code, then scan items as they shop, bagging the groceries as they go along -- a process that not only leaves them largely in control, but also aware of every cent they're spending during the trip. By the time they're finished, they just re-scan the bar code and pay, and they're ready to go. Bloom also offers self-checkout machines as well as a mobile cash register, so customers can skip traditional checkout lines if they wish.

Even the traditional checkouts are untraditional, however. The group adapted a horseshoe design from Delhaize's European stores, which saves space and allows cashiers to sit down during the transaction.

So far the personal scanners have generated about a 20 percent usage rate on average, says Susie McIntosh-Hinson, concept creator-information technology, and customers with larger baskets seem to be more apt to use them. But they aren't limited to any particular age group, with everyone from senior citizens to families with children getting involved.

"Kids absolutely love it," Johnson enthuses. Adds McIntosh-Hinson: "It's a child entertainment tool. It gives the kids something to do during the shop." Of course, shoppers must be at least 21 years old to use the scanners by themselves, so that they meet the legal buying age for purchasing alcohol.

If scanners are what make the children happy, then it's the centrally located TableTop Circle that thrills the grown-up crowd. That's because TableTop, a circular section in front of the store featuring home meal solutions, among other quick-shop categories, addresses the question that most shoppers have on their minds by the end of the day: What's for dinner?

Meals, front and center

The centerpiece of Bloom's quick meal solutions area is a Boston Market counter, which features an expanded Boston Market menu with items such as squash casserole, spaghetti and meatballs, lasagna, and wings. Takeout items are also packaged and can be picked up, among other foods, within TableTop.

"Boston Market is clearly the dominant seller in the total home meal solutions department," says Sapp. While rotisserie chicken is the most popular, Boston Market has developed a fried chicken recipe for Bloom that has also been doing well. Sapp calls it "superb."

Although many supermarkets in the States have traditionally located their home meal solution centers in back of their stores -- next to the deli, logically -- Sapp says he was inspired by the up-front placement that European chains such as Tesco and Sainsbury's give their departments.

Along with Boston Market, there are plenty of other take-and-go meal solutions in TableTop, including sandwiches, quiches, breakfast foods, and salads. Fresh-cut fruit has been a fast-mover in the section for those who prefer a healthier side dish, Sapp notes.

For shoppers who want to feel that they've made some contribution to meal preparation, Bloom offers several Recipes of the Week, which are highlighted in its circular ads and in creative in-store displays. During Progressive Grocer's tour, Zesty Taco Salad and Wacky Buffalo Pasta Salad were the choices for the week.

Bloom also features Recipe of the Week demonstrations several times each week, and so far customers are responding, according to Sapp. "It wasn't something so much that the customers asked for. But they'd say, 'I don't always want to buy something that's already made,'"notes Sapp. "Other retailers had gone this direction before, but it was always a grocery alternative in the back of the store -- it wasn't located in the home meal solutions area. It was usually a manufacturer-driven end cap display without all the ingredients.".

Bloom's display, on the other hand, is retailer-driven and mixes in various brand names, including Food Lion private label items. Among the selection in the Zesty Taco Salad display: Food Lion and Kraft Mexican cheeses, Taco Bell salsa and seasoning, Breakstone sour cream, Food Lion tortillas, Kraft Zesty Italian Dressing, Fresh Express romaine lettuce, ground beef, and fresh onions and tomatoes.

Across from the meal solutions section in TableTop is somewhat of a mini convenience store, which the concept's creators envisioned to cater to "quick and easy shops."Sapp says he selected the items that a large number of households purchase day in and day out -- primarily milk, eggs, cheese, yogurt, bread, soft drinks, and beer --so that shoppers who need just a few basic items can get in and out quickly. Green Mountain fresh coffee is also available in the front of TableTop, along with a daily newspaper and bagels -- all conveniently located within steps of the checkouts.

Observes McIntosh-Hinson: "In reality, half the time if shoppers only need milk, they'll stop at 7-Eleven rather than walk to the back of a grocery store. It's a missed sell.

Fresh and quick

During Bloom's first focus group since the store opening, customers said they picked up on the new layout right away. "Customers have noticed that the milk is in the front," notes concept creator Rick LaCroix, whose background is in operations. "One woman told us that she had finished her shopping trip, then walked out and realized she forgot the milk. She had her 12-year-old son run in and get it while she waited in the car."

Another quick in-and-out item that customers frequently seek is produce -- but it wasn't as easy to zero in on just a few key items that could be placed in TableTop. So the concept creators came up with a practical solution: They put produce directly behind TableTop, also in the center of the store.

"The first reason we put produce in the middle was because we didn't want to separate it from the quick in-and-out area," notes Sapp. "It certainly turned out to be a positive. Customers told us they don't like to put produce in the basket first, because it gets smashed." Another advantage to the TableTop adjacency is that customers tend to include produce in their meal planning, he adds.

Bloom's produce selection is reflective of where Food Lion has been going as an organization, according to Sapp. Exotic fruits such as mango, papaya, fresh rhubarb, and baby bananas are featured, as well as an organic sampling. Bloom did take a slightly different direction in its merchandising, by using display tables that allow for more product and visibility. "Our old cases are more vertical. These are more horizontal," notes Sapp.

Beyond the produce section, meat and seafood complete the central aisle. "People tend to make their meal decision around meat," observes McIntosh-Hinson. "They select the meat, then they go back to produce to get vegetables. We asked ourselves, 'Why can't we just put them together?' It marries well with the meal solution center."

Meal ingredient choices are made even easier with a meat recipe kiosk by Shop to Cook, which gives shoppers cooking instructions and recipe ideas for various specific cuts of meat. "One of the most commonly asked questions in the meat department is, 'What do I do with this piece of meat?'" observes LaCroix. "With this kiosk they just scan the product, choose from a list of recipes, and print."

Aside from the 'perimeter' departments that are now front and center, the rest of Bloom's aisles are organized in what the group calls "universes." "It sounds like a fancy term for store-within-a-store, but it isn't the same. We wanted to position things so that the customers could find everything together -- we wanted to make it logical," explains Sapp.

That's why food and nonfood items are completely separated, each on opposite sides of the fresh section. "In a traditional store, maybe you're in the canned goods aisle; then all of a sudden you come up on HBC," observes Sapp. "We wanted to separate those things and make it simple for customers so they can even skip aisles if they want to, which is heresy in the supermarket business."

Among the food aisles the universes are broken down into wine, baking, canned goods, beverages, snack foods, condiments, and breakfast, which logically faces a wall of refrigerated units containing dairy, bacon, and other items that are popular morning meal staples. Coffee is wrapped around the end of the breakfast aisle near orange juice. Packaged breads and other commercial bakery products, meanwhile, can be found up front next to the in-store bakery. In the same vein, prepackaged sliced meats are located near the deli.

Even more unconventional than the layout of grocery are the product adjacencies. Instead of grouping products by manufacturer or brand, Bloom uses a commodity-based approach. For instance, in the snack aisle, tortilla chips are in one group, pretzels are in another, and so on, instead of their being grouped together by brand.

"It's a little harder to stock," admits Sapp, "but so far customers have said they like it better." The sales representatives from Bloom's direct-store distributors have had to adjust to the change, too, he says.

Commodity-based merchandising also goes against traditional category management practices, he notes. "In category management you're trying to numerically prove aisle partners, as opposed to just asking customers what they want. They want simplicity."

Bloom's snack aisle is actually very practical for moms who are looking for several lunch items at a time, notes McIntosh-Hinson. "It's my favorite aisle. If you're a parent and you pack lunches, stuff like chips, popcorn, and crackers is typically spread out among several aisles. In this store it's all in one place, so your choices are much easier."

Bloom's wine selection, which is also arranged in a commodity-based fashion, is located near the TableTop Circle, since alcoholic beverages are also part of meal planning. "In Food Lion stores the wine was arranged by manufacturer, or even by country of origin. The customers wanted it simple, so we put the varietals together," says Sapp.

For frequent wine shoppers Bloom offers a free wine bag with a purchase of six bottles or more. Customers can also purchase the bag, which is light blue and features the Bloom name and logo, a white pinwheel.

Another change Bloom made with consumers in mind was to lower the shelving profile throughout the store. Compared to an average height of 72 inches, the top height of most of Bloom's shelves is 66 inches. "Customers noticed that the profiles kept getting higher, and they told us that if this was going to be a simple place to shop, it would have to at least fit a person of average height," says Sapp.

The difference required changes in all 264 of the store's planograms, he notes. "We had to go through a four-month process of testing each and every one to make sure they'd fit."

The end cap displays in Bloom are rethought, as well. Instead of featuring multiple items, each one highlights just one sale item that's advertised in its circulars. And you won't find many manufacturer-supplied displays or even clip strips in Bloom, either -- again, all for simplicity's sake.

Taking some risks

"We did take some risks in regards to impulse sales," concedes Sapp. "But the customers told us that while they bought some things from the clip strips, they found them kind of annoying and would run into them. If we live out our mantra -- which is 'thoughtful, optimistic, simple, easy, hassle-free' -- then we won't have those things. The risk is maybe you could lose sales. But so far we haven't found that that's happened."

If any customers feel lost in the unconventional layout, Bloom has included eight electronic information stations throughout the store, which include not only a store map, but also a search function to find where a specific product is located. Another handy element is a device that can check prices.

"We've nailed the low prices with Bloom, but customers still like to know for themselves that a product is really going to scan at the price they see," notes McIntosh-Hinson.

Bloom's nonfood aisles, which are all on the left side of the store, include the standard supermarket offerings, arranged in commodity-based groups that include picnic and beer, food containers, pet care, household care, laundry, baby, and health and beauty. Paper products, meanwhile, are located along the far-left wall.

The store also features a pharmacy, which its creators see as another part of the convenience equation. "Pharmacy is another errand for many customers. At Bloom they can drop off their prescription, and the personal scanner will notify them when it's ready. Then they can go back to the pharmacy, pick up the prescription, add it to the total on their scanner, and then pay for the whole order at the pharmacy checkout," says McIntosh-Hinson.

Only one other Bloom store will include a pharmacy, since the format is somewhat restricted in space, she adds.

Another of Bloom's errand helpers is a unique services center located in the front of the store. Customers can purchase Charlotte Transit bus tickets, money orders, and stamps at a business counter manned by several associates. Self-service features include a DVD kiosk by GetAMovie, a sales rack with used DVDs, a small popcorn/candy display a la Blockbuster Video, a Coinstar machine, a copier machine, and an ATM machine.

A self-service mini packaging center offers all the essentials shoppers need to mail out a package -- which can also be done by customer service associates. "It's a general merchandise sales opportunity for us," notes McIntosh-Hinson. "The first week we opened, I saw a woman pick up a DVD, bring it to the packaging center, and then go to the customer service counter to have it shipped."

Bloom has incorporated "Dinner and a movie" ads in its circulars to entice customers who would otherwise go by a local video store and order takeout.

Telling the full story

With so many new features packed into a single store, Bloom runs the risk of overwhelming the very shoppers it's trying to satisfy. The creators know they must successfully communicate the store's many points of difference.

"Our biggest challenge has been, will our shoppers know they can do all these things?" says McIntosh-Hinson.

Ad circulars and other media will be a key element in getting shoppers in the door. Before Bloom opened, Food Lion mailed out materials extensively describing the new concept and pointing consumers to the new Bloom Web site address.

Still, when consumers see the "Food Lion" name is included in the new banner, they can make an immediate connection with the chain's reputation for value, she observes. "One of the concerns folks in the consumer panels had that was that while they loved the sound of the concept, they didn't know if they'd be able to afford it. At that time they didn't know it was coming from Food Lion. Then, when we asked them, 'What if Food Lion were to bring you this?', they felt better about it."

On the operations side, the Food Lion connection clearly makes the whole idea possible. "I think it's important to note that along with the uniqueness of the Bloom brand and name, we're leveraging the power of Food Lion," points out LaCroix. "With our distribution, logistics, and supply chain processes, we have the opportunity to do this."

At presstime the company was preparing to open the second Bloom in place of a Food Lion store in Mooresville, N.C., which is a highly competitive area including two supercenters and four more supermarkets in close proximity. After Mooresville the Bloom concept will be unveiled in Mint Hill, a suburban area, on Sept. 1; Harrisburg, a small town, on Sept. 8; and near North Carolina State University in Charlotte on Oct. 13.

The store designs will be essentially the same, and the product mix will initially be similar, says Sapp. Beyond that, however, the group's members will continue evolving the concept as they go along, all the while putting consumer feedback front and center -- which is pretty revolutionary, indeed.
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