From The Fall 2004 Issue of Natural Grocery Buyer

Who’s Shopping in Your Store?

Sherwood Badger Smith and Vicky Uhland

One-stop shopping.

Consumers crave it, and supermarkets provide it. Natural products shoppers are increasingly getting their needs met at conventional grocery stores, where they can buy the natural, organic and health food products and dietary supplements they’re seeking while still being able to stock up on the conventional brands they’ve always bought.

But according to a new study conducted by Natural Grocery Buyer and The Intelligence Agency, one-stop shopping isn’t enough to ensure your customers never visit natural products supermarkets, mass merchandisers such as Wal-Mart, club stores, supplements retailers or other types of stores for their natural products needs.

Why?

What are your consumers of natural products looking for when they add other destinations to their shopping routines, and how can you increase your wallet share with those consumers? What are their service expectations when they shop in your store, and how can you increase customer loyalty?

Why they like you
There are three principle reasons consumers purchase natural, organic and health products in conventional grocery stores.

• Convenience: Most respondents to the study reported that there is a conventional grocery store located closer to their home than a natural products supermarket, specialty foods store or even a mass merchandiser. They also reported making grocery trips more frequently.
• Variety: Grocery stores carry more categories, more staples and more choices within categories for shoppers who don’t buy 100 percent of their grocery and supplement items in the natural, organic or health category.
• Price: Grocery stores are generally seen as having lower prices than natural product supermarkets and specialty stores.

Certain consumers are willing to go to extraordinary lengths to purchase products from their preferred venues.

Why they like someone else
Study respondents generally reported making trips to retailers other than grocery stores to gain access to specialized expertise and service or to take advantage of a signature category such as bulk foods, organic beef or specialty cheese.

• Expertise: Consumers generally seemed to trust dedicated naturals specialty stores to select products free of harmful additives. Jean Foutch of Vancouver, Wash., says she is willing to pay $11 for Boar’s Head turkey with no additives at her local natural foods store, Zupan’s, whereas most people go for the $4 per pound version at the nearby Kroger subsidiary, Fred Meyer.<.li>
• Signature category: Certain consumers are willing to go to extraordinary lengths to purchase products from their preferred venues, including driving great distances or even ordering all groceries from a retail store via UPS. Nancy Hancock of Chunchula, Ala., is so concerned about mad cow disease that she buys beef at a butcher 25 miles away because it only purchases local cows for slaughter.

Types of shoppers
Until now, we’ve been referring to natural products consumers in grocery stores as if they are all the same. But in the course of the study, we observed four unique segments.

• Primarily pricers. This group’s mantra is “I want to eat well, and I want to take care of my family, but I watch the pennies.”
  
  Primarily pricers are the most prevalent among natural and organic product shoppers in conventional supermarkets. They spend 21.8 percent less than the average shopper does on food, 6.3 percent less on supplements and 17.3 percent less than the average shopper overall. Their priorities, in order of preference, are very low prices, very fresh food, a store that is nearby and product variety. They tend to have children and also shop at club stores, pharmacies, online or by mail order.
  
  Irene Miller of Monticello, Minn., is a primarily pricer. Although she thinks it’s reasonable to spend 10 percent to 15 percent more on health food versions of conventional items, she’s very affected by price and is most likely to try a natural or organic product if she has a coupon for it and if she needs it. Her vitamin choices are determined by whatever’s cheapest or on sale. She does all her shopping at Cub Foods, even though it has a small natural and organic food section and she feels limited by the selection.



• The second most common category is convenience cravers. Their mantra: “I want to be healthy, but I’m in a hurry.”
  
  Convenience cravers—across all channels—spend 19 percent less than the average shopper on food, 9.8 percent more on supplements and 10.1 percent less than the average shopper overall. Their priorities are stores with easy access, nearby stores, very fresh food and staff availability. They tend to have an annual household income of more than $75,000, are age 35 or younger and have children. They also shop at vitamin, mineral and supplements stores, mass merchandisers, and club stores.
  
  Tami Kowalski of Wolcott, Conn., and Jill Emanoil of Indianapolis are convenience cravers. Kowalski shops at Stop & Shop as opposed to Connecticut supermarket chain Shaw’s because she knows the aisles at Stop & Shop and organizes her coupons accordingly. Emanoil shops at her local Wild Oats because she only buys products she likes and knows, and she wants to assure they’re available. But she spends about 30 percent of her shopping dollar at Marsh and Kroger because they’re convenient.



• Service seekers are the third most common category of natural product shoppers in grocery stores. Their mantra: “I want my supermarket’s staff to get to know me and to meet my unique wants and needs.”
  
  Across all channels, service seekers spend an average of 5.8 less than other shoppers on food, 7.6 percent more on supplements, and 2.6 percent less than the average shopper overall. Their priorities are helpful staff, knowledgeable staff, very fresh food, staff availability and product variety. They tend to be over age 55 and have children. They also shop at vitamin, mineral and supplements stores, mass merchandisers, natural foods stores and pharmacies.
  
  Frances Smith of Raton, N.M., and Laurie Scriven of Beaverton, Ore., are service seekers.
  
  Smith is so devoted to her health food store near her former home in Missouri that she has it ship product by mail to her new home in New Mexico. She particularly appreciates that the Missouri store has been run by the same people for many years and that the staff knows her ailments and watches out for “anything new that might come up that will help.” She completely trusts their advice and says she has had no adverse effects from anything they’ve recommended.
  
  Scriven says she doesn’t want a store where staff members “run their sampling on me”—where she has to experiment with products to find one that works. She wants the best product, right away, based on the research of the manufacturer and the retailer.



• Product passionates make up the final category of natural and organic products shoppers at grocery stores. Their mantra is “It’s all about the products. If I’m going to pay for fresh, local products, the quality has to be there.”
  
  Product passionates are the big spenders of the natural and organic product world, shelling out 28.3 percent more than the average shopper on food, almost 1 percent less than the average on supplements, and 19.3 percent more than the average shopper overall. Their priorities are very fresh food, product variety, local products and a higher proportion of organic, natural and health products. Like convenience cravers, they tend to have an annual household income of more than $75,000, but they’re usually age 55 or older, without children. They also shop at consumer buying clubs, naturals supermarkets, gourmet food stores and through network marketing.
  
  Adrianne Mossman of Phoenix is a product passionate who shops at Wild Oats for specialty cheeses and meats and Kobe beef. “If I’m buying produce, I look for no pesticides first, then price,” she says. Delores Delosos of Wildwood, Mo., is loyal to local health food store World Foods because of the attractive displays, well-stocked deli, excellent produce and “wonderful bakery.” She pays extra and drives farther to shop at World Foods.
  
  Sarah Park of Charles City, Va., is a nursing mother who describes herself as extremely food sensitive and food conscious. She spends more than her weekly food budget on products like organic produce, goat’s milk, organic eggs and yogurt, and hormone- and antibiotic-free, free-range chicken and beef. Kathleen Colenso of Missoula, Mont., is a product passionate who recently switched to natural dish soap and laundry soap because she’s convinced they put fewer chemicals into the world. She’s disgusted by big corporations that label their nonorganic products green this or earth-friendly that. “They steal the language of organic food and turn it into a rhetoric of misguidance.”

The takeaway from all this information is that every respondent to the survey reported making purchases in conventional grocery stores, but not all of them are purchasing naturals regularly in those stores. If you want to court the business of the many customers who take their natural products dollar elsewhere, you should strongly consider providing a dedicated natural products section with the product selection and service levels these consumers demand.

Sidebars:
Natural Grocery Buyer Talks to Your Customers

Woody Smith is vice president of The Intelligence Agency, a marketing consulting firm that quantifies consumer decision-making for natural and health products companies. Smith is happy to answer any questions at 231.932.0400 or ssmith@ intelligenceagency.com.

Vicky Uhland is a Denver-based free-lance writer.