Underwritten by Puroast
The retail landscape for the natural foods industry is evolving so quickly it can be difficult to keep up with all the changes, let alone how brands should navigate them. At Natural Products Expo West 2018, industry leaders—from former Whole Foods Market co-CEO Walter Robb to a UNFI executive to small-business owners successfully exploring different approaches to retail—shared thoughts about the current retail environment and the factors influencing it.
Social media comes out near the top in terms of factors influencing the retail environment. This shouldn’t be a surprise, but some of the specific ways it’s influencing retail might be. It can be digital word of mouth, yes, but it also enables brands to connect with their consumers directly on everything from story to product quality. That connection is more important than it has ever been, given the limitless choices consumers have for everything, the increased focus people have on social and environmental impact and the desire to support brands that exist to do more than just earn a profit.
Some companies, such as Native Deodorant, use social as an almost singular tool to launch a brand. Owner Moiz Ali explained how the company values its direct relationship with consumers for product feedback and data collection. The company can tell, for example, which scents are likely to indicate a recurring customer or an isolated purchase, what colors resonate with customers and what kind of effect a Facebook ad is (or isn’t) having. Others, such as Lucky’s Market, use it as more of a first step to connect with customers, before moving to email and then, hopefully, enticing them to join their rewards program; and there are myriad uses in between.
Brick and mortar, online and Amazon. Whether you subscribe to the term “omnichannel” or holistic (Walter Robb’s preference), it’s clear that brands today have to be able to navigate different ways of reaching customers through various platforms. For many businesses, Amazon is crucial; others (but not many) forego it altogether.
For small businesses, Amazon can be valuable for the data it can provide, and as a kind of incubator—offering an opportunity to build a profitable business before taking the plunge into brick and mortar. It can also be a gateway for connecting with consumers. Madeline Haydon, CEO of NutPods, said, “I can tell you, unequivocally, consumers go to Amazon for the social proof of your product.” The reviews there can be a validation tool for consumers—even if they end up buying the product elsewhere.
However, selling on Amazon is almost an entirely different game than selling in brick and mortar. Jamie Lomas, Amazon’s director of global emerging account sales, explains that people will be shopping for products at every hour of every day, so brands need to make sure their products are placed properly, always (always!) in stock, and in general be prepared and well-positioned from the moment they list their products.
Put your customer hat on when thinking about how you market on Amazon, advised Lomas, because the purchase process has become nonlinear.
Social impact is another influential factor, and can be a way for brands to differentiate themselves.
That can be true for retailers as much as for brands. Danielle Vogel founded Glen’s Garden Market as a store dedicated to showcasing small, regional brands. “Our stores are community centers. They’re grocery stores, but they’ve got craft beer bars, they’ve got delis, they’re a way for people to connect to each other. I happen to feel that differentiation, of not only product mix but culture, is how the small retailers are going to survive,” she said.
John Raiche, UNFI’s senior vice president of marketing and supplier relationships, said that brands that stand for something are one of the top trends his team is seeing on the horizon (second only to the use of minimal ingredients).
Crowded marketplace. Consumers have no shortage of healthy options to choose from; they also have less and less time to spend shopping before they make decisions. That can be a double-edged sword. Quality has never been more important: consumers are increasingly looking for items that are fresh, healthy and bring new and interesting flavors, and the competition is stiff. But it also means packaging can offer significant opportunity, and if a package can communicate effectively about the product and also about the brand’s value proposition, it can be an effective tool for reaching the buyer—whether the buyer is a retailer, distributor or consumer.
It also means there’s a need to always be coming up with new and exciting offerings. “Continue to innovate to stay relevant, so you don’t become a one-hit wonder,” advises Jim Nielsen, president and COO of Sprouts.
Walter Robb emphasized that consumers are bombarded today. “They want brands they can resonate with; they’re looking for brands that understand them,” he said. In the end, though, no matter how much the retail landscape changes, it comes down to the quality of your product and how hard you’re willing to work to build your company and your brand.
“There’s no substitute for hard work, grit, scrap,” said Robb.