Tuesday, June 19, 2018

Ocado Technology Crosses the Pond

Image from Ocado Group's website
Ocado is well-known in the UK for its efficient web -based grocery retailing business. Today, more than half a million consumers shop online at Ocado's e-commerce site and have their groceries delivered.

The company has developed a highly efficient warehouse system that uses robots to pick and pack. See it in operation here.

Now the US supermarket chain Kroger has an exclusive deal with Ocado to build a series of robotic grocery warehouses across America. Ocado's technology will also help Kroger with delivery logistics, a key element.

Currently, Walmart dominates the US grocery business . . . and Amazon's acquisition of Whole Foods Markets turned up the competitive heat last year.

In the long run, Kroger wants to drive down costs and increase efficiency and customer service by transitioning to Ocado's system. Ocado's CEO says the deal with Kroger will "reshape the food retailing industry in the U.S. in the years to come." Meanwhile, how will consumer behavior shape the industry and competition among grocery retailers, online and in stores?

Monday, June 11, 2018

Hummus Market Is Humming

Hummus is having its turn in the marketing spotlight. Above, only part of the hummus display at a Wegmans supermarket in Virginia. In addition to the store's private-label hummus (at top right), other national and regional brands are featured.

One of the featured brands is Ithaca, named for a city in upstate New York, where Wegmans got its start. Smart marketing move to give Ithaca chainwide distribution on the East Coast rather than confining it to New York. Variety-seeking consumers and dedicated hummus-lovers outside of NY will see this unfamiliar brand, check out its unique attributes, and give it a try.

In the overall U.S. market, Sabra is the dominant brand, a market-leading position it's held for years. It's growing rapidly and expanding its R&D and manufacturing to keep up with high demand.

Wegmans carries Sabra, of course. But the diverse brands in each of its stores help to differentiate Wegmans from national supermarket chains, encouraging shoppers to return for unique and interesting choices. For the hummus brands, the marketing objective in this competitive marketplace is to secure distribution, raise brand awareness, and reinforce brand loyalty.

Note: This is post #1200 for my Marketing Handbook Blog.

Monday, June 4, 2018

Macy's Fine-Tunes Store Retailing

Macy's is still attracting in-person shoppers, despite the incredible growth of online and mobile shopping, all competing for the attention of customers. Among the innovations it's using to draw shoppers into stores is its outlet-style retail section, known as Backstage.

In my local Macy's, Backstage occupies an area on the lower level, with its own cashiers and decor. Customers can register for text messages about new products, in-store events, and other Backstage specials. This retail brand has its own Instagram account, Facebook page, and Twitter account.

Backstage is largely stocked with "off-price" merchandise, often new products purchased out of season or as excess inventory. Mostly apparel, but also home goods, brand-name cosmetics, and lots of shoes.

What caught my eye was the above sign in the handbag department, sitting on top of a showcase featuring "previously loved" merchandise. Turns out these are high-end purses that have been repaired and are now marketed at discounted prices compared with the original new-product price.

One strategy Macy's is using to fine-tune its store retailing is "Growth 50." This involves testing a concept in 50 stores, assessing the lessons learned, and applying the most effective ideas to hundreds of other stores. Watch for more innovations and lessons learned as Macy's reinforces customer loyalty in this age of omnichannel retailing.

Friday, June 1, 2018

Pepsi and "Performance with Purpose"

As part of its "Performance with Purpose" strategy, PepsiCo has three types of product portfolios. One is "fun for you" foods and beverages like Mountain Dew. The second is "better for you" products like Baked Doritos. And the third is "good for you" products like Naked Juice.

 Just a few days ago, it acquired Bare Snacks Inc., which markets Carrot Chips, Apple Chips, and other crunchy snacks made from fruits and veggies. This acquisition expands the pantry of "good for you" products.

In the beginning, Bare Snacks produced apple chips and other products from its own organic apples. The company recently said that no matter who acquired it, Bare Snacks would stay true to its strategy of producing fruit and veggie snacks that taste good, as well as being healthy.

PepsiCo is also using a "brand incubator" to encourage small businesses to pursue "good for you" food and beverage innovation. In addition to money, the entrepreneurial brands enrolled in the Nutrition Greenhouse incubator receive mentoring to grow their businesses.