Will This Summer’s Organic Food Craze Continue through the Holidays?

Produce2

You walk into the local grocery store and enter the produce section. On one side, there are brightly colored signs shouting buzzwords such as, “fresh,” “locally-grown” and “organic.” The other side is stocked with standard rows of fruits and vegetables with significantly lower price points. Which side are you drawn toward?

Industry data shows that more and more people are looking to buy organic and fresh foods. In fact, a recent Market Force study found that nearly half of shoppers (49 percent) prefer to purchase local and natural foods, when given the option. With the summer season serving up fresh fruits and vegetables, it makes sense that organic foods were a big focus for grocery and on-the-go shops during the warmer months. But with cold weather looming, and ushering in the biggest food holidays of the year, retailers must now determine whether the organic craze will carry into the holiday season.

For grocery stores, much like all other retailers, the winter is the most wonderful (and busiest) time of year, and a crucial time to ensure the right products are stocked to keep customers happy and bottom lines positive. Unfortunately, there is no one-answer-fits-all stocking mix for the industry to follow, and this isn’t something that can be determined based on simple mass consumer surveys. Expected consumer demand is dependent on a lot of different factors. Therefore, the key to deciding whether organic food will continue to be a prominent trend for specific stores during this particular season is found by digging into a store’s data.

Retailers are already collecting pools of information from various sources and with the help of the right tools, this data can paint a comprehensive picture of a business’s performance, helping managers and owners better understand a customer’s wants, needs and behavioral patterns. Here are the key data sources and insights retailers should review to properly anticipate their store’s organic demand throughout the holiday season.

ProduceWatch Inventory Management Monitors

Monitoring the flow of inventory throughout the supply chain can help retailers better understand the volume of organic products they’re bringing in and the amount of time it takes to turn over these items. Feeding this information into a data analytics system will offer retailers even more valuable insight at each stage of the organic product flow. This is because this data offers an accurate and timely picture of the dead net profitability and overall performance of organic foods in real-time. Ultimately, retailers can use this information to optimize the ratio of how much of each product they bring in, as well as better understand factors such as pricing and fill rates.

Make Correlations Between Historical POS Data and Loyalty Programs

Looking to a retailer’s POS data can help each store anticipate the successes and failures of specific products, brands and food types. Seeing which specific items customers are buying at an individual store can help retailers accurately understand and anticipate future purchasing habits. Furthermore, inputting this data into a smart analytics system offers even more insight, giving retailers the ability to review information over time and segment specific seasons to determine product fluctuations. With this information alone, retailers can get a basic understanding of how customers interact with organic food during different times of the year.

While POS data can certainly be useful, making correlations between this sales data and information gained through loyalty programs is where the deepest insight lives. Retailers can leverage these two data sets in concert with one another to accurately examine sales of organic foods among their most valuable customers, and start to anticipate a growth trajectory of how this category of products will perform in the coming months.

Don’t forget external data!

While leveraging internal data is key to understanding how a retailer performs on the whole, combining this information with relevant, accredited external data will elevate retail intelligence by adding in a layer of comparison against the wider market.

Take, for example, census data. This information can present a clear idea of a retailer’s customers at the most granular level, including average income, ethnicities, and other specific demographic information. Layering in this information helps retailers analyze who their most frequent and valuable customers are, as well as giving an in-depth look at their purchasing habits. Retailers can leverage this information to identify and analyze the profile of an organic food customer and lay that profile over their geographic market in order to accurately determine if there are sufficient numbers of these customers in their market. From here, retailers can make decisions on whether an investment in organics can be justified. Beyond this, viewing a profile of high-value customers layered over a geospatial view of their full market can also help retailers identify prospect-rich areas to invest in marketing.

Combining census data with geospatial information can help retailers gain unique insight into how a specific organic product, or the organic category as a whole, is performing against the maximum available potential in a specific area. Beyond this, taking advantage of both census and geospatial data helps retailers look at the overall market and where they stand among competitors. This gives them an opportunity to see how their closest competition is performing when it comes to organic foods, helping them make smarter and more strategic stocking decisions.

More and more people are investing in the organic and fresh food trend; however, understanding whether this craze will continue throughout the colder months is dependent upon who your customers are, where your stores are located and what the data shows. ‘Tis the season for big holiday parties and family dinners, meaning it’s crucial that grocers leverage their data in order to anticipate which fresh products they’ll need stocked this winter.

Guy Amisano headshotAbout the Author

Bio: Guy Amisano Sr. is the founder and CEO of Salient Management Company, a provider of performance management solutions with experience developing industry-specific strategies for businesses in retail and wholesale distribution markets. http://www.salient.com

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