The Lure of Local

Sep 26, 2018

Look around any national or regional grocery chains, and it’s clear to see that “local” is driving key initiatives in grocery. From HEB to Meijer, Walmart to Publix, big retailers are trying to customize assortments, pricing, and services to give the impression they are, in fact, local retailers.

Of course, the truth is that what makes big chains work is efficiency and scale. No large retailer could afford to completely customize their assortment to the individual needs of a local marketplace for fear of destroying their operating margins and devaluing their stock. Instead, they want to garner the “appearance” of local. So they run TV spots talking about being local; they put up displays and signage about being local; and they buy an endcap or two of local honey and locally-produced jellies, all to prove that hey, they are, in fact, one of your neighbors.

No wonder big chains are trying desperately to “look local.” And while being local and marketing like a local retailer are clearly two different things, chains have big sophisticated marketing teams, and that means when they put their mind to a tactic, they have the resources to be highly disruptive.

That’s precisely what’s happening all across the country. Big chains like Walmart and Home Depot do everything they can to appear more local. They put the state name on the front entrance (Georgia’s Home Depot), and they deign corporate giving programs for local charities and foundations. They run kid’s workshops, give away materials for local playgrounds and Habitat for Humanity builds, and they make sure the names of their associates—your friends and neighbors—are visible and obvious.

Walmart announced in 2012 they were committing to local, and in less than two years, doubled their produce department sales of “local” products to almost 10 percent. But big chains’ definitions of local are often different than the consumer’s understanding.

For shoppers, local generally means family farmers, products grown, made and/or shipped within a few hours of the store, and supporting their own community. For bigger global chains, local has a much broader definition, ranging from grown in that region of the country or close to a distribution center, to more broadly, sourced in the United States.

For independent retailers, this shopper preference for local is a real competitive advantage. But it only works in our favor if we are willing to tell our shoppers about it. Often when I walk independent stores I find their local identity is completely invisible, with no distinction from what was sourced or made locally and what came from a warehouse, corporate food broker, or even international sources. The high turn, high restock nature of grocery means that often we are better at pricing than visual merchandising and, as a result, undersell our advantage.

Ask yourself, “how would a shopper know?” Walk the store and see if, through untrained eyes, the consumer could tell what was local. Now walk it again, and take note of everything that is truly local.

Are you cutting fruit on site? Does the package say so? Are you baking on premise? Tell the shopper which items are locally made! Are you buying from local wineries and craft beer brands? Make a big display and promote the local entrepreneurs! And in deli and prepared meals, brand locally-made items, letting the shopper know you—and not some distant corporate kitchen—made the items they feed their family.

IMG_0133

From produce to prepared meals, from beer to BBQ sauce, independents are often full of unique, locally-produced (sometimes on-premises produced) products. But we guard the news like it is a precious secret.

Imagine your store is a restaurant. If you were writing the menus, how you would romance the ingredients? What story would you tell to increase the appeal? Instead of a sign that says ‘potato salad,’ you would have a marketing blurb that might read, “Made from farm-fresh ingredients every day, ‘Martha’s family recipe’ has been a southern tradition for over 50 years.”

IMG_0137

National retailers have so many advantages, but this is one where we can and should beat them every day. To do that, we have to tell our story. Imagine putting a sticker on every local item in the store. Now imagine writing a little restaurant-like review. Now imagine putting up signage that tells the shopper that you are committed, wherever possible, to sourcing from local and regional farms.

From local family farmers to local manufacturers, brewers, vintners, and bakers, there are probably a huge number of incremental suppliers that have the volume to supply you, but not a national chain. The more you promote local, the more likely these products will sell in your store.

IMG_0132

Many of IGA’s core initiatives for 2018 are concentrated on local—including a whole new visual merchandising kit launching later this year designed around the idea of letting shoppers discover how local is good for them. From department-level to item-level, look for new signs you can use and customize for your stores (read IGA’s National Retailer Advisory Board Weighs in on Core Initiatives in Action to see how the prototypes of the merchandising kit are being tested in store).

You’ll be surprised how much of a statement you can make over time—and how much a sales increase you can enjoy—if you seek out and merchandise local the way shoppers want. After all, the big national chains aren’t trying to be local for fun—they know the more local they appear, the more sales go up.

IMG_0032

Shoppers already believe we should have more local and fresh ingredients in our stores than national chains. Let’s reinforce their assumptions, sign our stores, and promote our locally-produced selections in a way that further differentiates what we do from the big national, homogenous corporate chains.

You have the advantage here. Now it’s time to take it.

 

You May Also Like

These Stories on From the Desk of

Subscribe by Email

No Comments Yet

Let us know what you think