Natural Foods Merchandiser

Stores say, "Hey, big spender"

They?re educated. They ask challenging questions. They appreciate special treatment. They are your biggest spenders. And they are also tempted by the price, convenience and atmosphere of other naturals stores, gourmet shops, conventional supermarket chains, warehouse stores and drugstores.

Even customers concerned with naturals values shop at several different stores for different items and have little loyalty to any particular store, according to consumer research performed by The Natural Foods Merchandiser. On average, consumers spent 48 percent to 56 percent of their natural products dollar at the store they deemed their ?favorite.? Even supernaturals, which claimed nearly 65 percent of their primary shoppers? weekly spend, allowed 35 percent of that spend to go elsewhere.

?I am not really loyal to one particular store. I like to shop at them all,? says Alixine Sas of Tacoma, Wash., who was raised on natural and organic food by a mother concerned about health problems. ?My whole life I have been buying organic. … I buy fresh juices, vegetables, pasta sauces, meats, cheeses, fruits, pasta, breads, snack foods, chocolate—all organic.? She spends about $400 a month on natural foods, dividing her purchases between two independent stores, The Grainery and Marlene?s Market, and chains, including Fred Meyer, QFC and Trader Joe?s.

In NFM?s research pool, those who are spending roughly $100 per week on natural products constituted only about 17 percent of the total base of consumers. However, their contribution to total spending was 47 percent of total store sales. So what are you doing to win over big spenders like Sas, and how are you increasing the size of their shopping basket?

The key is to know how they want to be communicated with and where they go for more information.

Where everybody knows your name
These big spenders favor direct communication with their stores of choice over advertising. This is good to know for a retailer who is broadcasting advertising messages to a large audience. Finding ways to send targeted, direct mail to prospects and then to build ongoing newsletter and e-mail communications with existing shoppers may yield a much higher return.

Jay Jacobowitz, president of Retail Insights, a Brattleboro, Vt., consulting firm for the natural products industry, agrees with the direct approach. Jacobowitz suggests creating a monthly e-mail or call list to remind regular customers when they need to purchase a new stock of their vitamins or supplements, since most supplements come in 30-day cycles.

Then, to keep your big spenders feeling appreciated, thank them for their business in a tangible way, Jacobowitz says. ?Make them feel special for dropping big bucks,? he says. One way to do this is through premiums. Jacobowitz suggests throwing in a quarter-pound of bulk foods or some free samples as a way to show your big spenders that you appreciate them. Giving your staff permission to give a little away shows your generosity and leaves customers feeling appreciated.

Be king (or queen) of information
According to NFM?s consumer research, more than 87 percent of naturals shoppers are college-educated. These shoppers are savvy with the Internet and get current health information from a variety of sources, including books, magazines, product labels, health practitioners and friends.

?They?re on the cutting edge,? says Joseph Eorio, president of the Fountain of Vitality health food chain in central New Jersey. ?[Our big spenders] are almost ahead of us.?

When it comes to keeping up with those affluent, on-the-ball customers, the one who knows the most wins the game, says Peter Farber, principal of Loyal Customer, a marketing and merchandising program for retailers in western Massachusetts.

Farber explains that branding a store with nutritional information is one of the keys to keeping the attention and trust of your big spenders. Forming a knowledgeable staff is the first step in keeping them up to date on new products and studies.

?The owner who does not invest in the knowledge of his staff is misusing his most valuable resource, especially in supplements,? Farber says.

But beyond keeping your staff sharp and knowledgeable, taking a few extra proactive steps in the education department can give you an added edge. More than half of shoppers who said they increased spending on naturals this year also said they?re influenced by health magazines or books; 37 percent were influenced by coupons and 25 percent by in-store sampling.

A store newsletter or Web page can display your staff?s knowledge and draw attention to products. A nutrition article by a staff member published in a local paper can give your store an educated, knowledgeable image. Jacobowitz also suggests bringing in nutritionists or health practitioners for discussions.

Sharing relevant new information can help keep your intelligent, educated consumers? confidence and will very likely add new products to those regulars? shopping baskets.

It?s all in the ambience
Heavy spenders are much more likely than average to be Product Passionates, indivuals who are on the lookout for freshness, local flavor and variety.

Sampling is therefore a crucial part of the shopping experience that club stores take full advantage of, says Bill Wyman of Rockwell Consulting. Opening up a package to share with your customers makes their shopping trip more fun and tempts them to purchase something new.

?We just got a new store called Henry?s [Farmer?s Market], and I really like it,? says Mary Wickett of Phoenix, Ariz., whose regular stores include Wal-Mart, Costco and the commissary at a nearby Air Force base. ?I tasted shark for the first time and ended up buying it for dinner that same night. … I even got a great recipe from the demo guy.?

As conventional grocery stores stock more natural and organic products and gourmet food stores lure customers with special treatment, stepping up your knowledge and building direct ongoing communications with them will help build loyalty with your biggest spenders.

?The consumer is king, and there are many options,? Jacobowitz says. ?You can?t take them for granted.?

Hilary Oliver is a freelance writer in Fort Collins, Colo.

Natural Foods Merchandiser volume XXVI/number 8/p. 16, 28

Influencers and trusted sources of information

Influencer

% of those who reported overall increase

Trust: % who always or usually trust this source

Health magazine or book

51

54

Coupon

37

NA

Advice/information from a friend or relative

31

40

In-store sample/product demonstration

25

NA

Article/story in national TV, radio or newspaper/magazine

28

30

Advice/information from a health practitioner

24

65

Web site

26

31

Label or other information supplied with product

24

50

Article/story in local TV, radio or newspaper/magazine

21

25

Product advertising

17

19

Book by a health practitioner

16

39

Display

14

NA

Product literature distributed in the store

13

29

E-mail from an organization or company

10

18

Personal speaking appearances by a health practitioner

8

31

In-store recipe

7

29

Course or class (cooking, natural medicine, etc.)

6

40

More than half of shoppers who spent more on naturals this year get information from health magazines and books. Practitioners remain the most trusted source of health information.


Preferred marketing communications

Frequency

%

Direct mail

799

39.6%

E-mail

655

32.4%

Store newsletter

223

11.0%

Print advertising?local publication

91

4.5%

Store Web site

78

3.9%

Television advertising

69

3.4%

Print advertising—nationally distributed publication

45

2.2%

Web-based advertising

39

1.9%

Radio advertising

21

1.0%

Total

2020

100.0%


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