How Grocers Can Unlock the Brown-Bag Opportunity

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How Grocers Can Unlock the Brown-Bag Opportunity

By Jim Fosina - 09/10/2018
How Grocers Can Unlock the Brown-Bag Opportunity Subscription Economy Ongoing Replenishment
By leveraging in-store frequent-shopper data from recent transactions, retailers can carve out a universe of customers who purchase "brown-bag" products

There’s no doubt that the smart grocer today leverages a wide range of in-store data points to optimize the consumer experience. From new product introductions to end aisle displays and store planning, this data has proven incredibly valuable in making the most of a shopper’s visit to the store.

In recent years, point-of-sale data has unlocked a treasure trove of personal information on individual consumers’ preferences and purchases, allowing the grocer to build a stronger direct relationship among the retailer, the brand and the personalized shopping profile to increase the frequency of purchase. As progressive grocers, we understand that to remain relevant and engaging with our customers, we must do more than monitor behavior and preference. Today’s consumer expects the retailer to be thinking ahead of the shopper’s needs to create new products and services that address these challenges and make the overall shopping experience pleasurable and efficient.

Subscription Economy Solutions

With the rise of what’s become known as the “subscription economy,” the consumer has once again provided insight on the path ahead. Today’s shopper is looking for a wider range of services from the grocer to take the hassle out of the shopping visit and checkout line. Most notably, shoppers have embraced the prepared-meal subscription service business model, as it promised great flexibility and variety in the quality of meals, either sourcing ingredients for a great meal and/or an actual prepared meal delivered direct to the consumer’s kitchen.

Many grocery retailers have taken advantage of this shopper shift either by selling their own prepared meal options in store and/or partnering with some of the leading prepared-meal providers looking to extend beyond the subscription channel to showcase products in the retail refrigerated cooler. No doubt, these grocery retailers are finding great interest and incremental profits through the marketing of the prepared-meal sector.

As the subscription channel continues to evolve and embrace new grocery retail product categories, there’s a huge opportunity for individual grocery stores and chains to take advantage of this great market opportunity. Many have begun to create their own subscription product offerings allowing their customers to subscribe to services that provide them: big-box products, household items, meal planning services, grocery and produce packages, etc.

As retailers better understand the needs of the in-store customer on regular physical-shopping visits, they can work to build programs that strengthen their relationships through the offering of subscription programs that sell ease of use and flexibility. The end result of this type of program is the building of a more consistent consumer relationship and a larger shopping cart value over time.

A subscription service that focuses on the continuing delivery of certain items to their homes would be a lifesaver to shoppers – as well as a pride saver – by allowing them to have the brown-bag products that they need while avoiding any potential issues related to in-store checkout.

Alleviating Embarrassment

One area that remains open to grocers in this regard is the opportunity to build programs focused on alleviating any stress or embarrassment regarding “brown-bag” items in store.  There’s obviously a range of products that lend themselves to the potential embarrassment factor: certain hygiene products, specific health-related items and nonprescription pharmaceutical-based items, to name just a few.

These are items that have a consistent ongoing replenishment need for the specific consumer. Many of these consumers may be dealing with health issues that keep them homebound, and a subscription service that focuses on the continuing delivery of certain items to their homes would be a lifesaver to shoppers  as well as a pride saver  by allowing them to have the brown-bag products that they need while avoiding any potential issues related to in-store checkout.

As you leverage in-store frequent-shopper data from recent transactions, it would be relatively easy, based on SKU-level data, for your store to carve out a universe of customers who purchase brown-bag products. This group would be a perfect test market to introduce your brown-bag subscription offering.

You can assemble a brown-bag section of your shopping website that would allow the consumer to select these products as a subscription offering. Consumers would actually be able to select, on an item level, the frequency of need within their bimonthly and/or monthly shipment. For customers who need to use these types of products and services on a regular basis, a subscription service is highly convenient to the consumer and speaks highly, from a reputation standpoint, of your grocery business.

Grocers today are dealing with a wide range of online outlets, all competing to gain a greater share of wallet from your customers. For you to leverage your brick-and-mortar presence and legacy of serving the needs of customers, you must keep up with the competitive set by building and executing new programs and services that delight your customers and maintain their loyalty and preference.

About the Author

Jim Fosina

Jim Fosina

Jim Fosina is founder and CEO of Danbury, Conn.-based Fosina Marketing Group, where he leads his team Read More