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Natural Foods Merchandiser

Experts ponder the future of retailing

With economic times changing so quickly, it’s difficult to know what the future brings when it comes to the retail store front. But four seasoned industry experts ventured their best guesses during Expo West’s “The Future of Retailing” seminar.

John Grubb, senior partner with Boulder, Colo.-based brand strategy firm Sterling Rice, opened the session with a discussion of private labels. “The U.S. will look more like European countries like the U.K. and Switzerland, where private label is more than double [their market],” he told the packed room of about 170 attendees. Other trends retailers should plan on:

• Growing ethnic populations that will put “minority” consumers in the majority in some states like California.

• Increases in self care as more consumers get educated about nutritional science.

• Value plus value: Along with increased demand for economic value, shoppers will also demand ethical value.

• Electronic nutrition information—shoppers will use their cell phones to scan a product’s nutritional profile and see if it fits certain criteria, like that of the U.S. Department of Agriculture.

John Foraker, CEO of Annie’s Homegrown foods in Napa, Calif., said in order for retailers to compete in future markets, they need to tap into consumer behavior like never before. “Retailers will need to build intimate relationships with their customers. Look at Kroger’s and all of the information they get from their loyalty cards,” he said. “In a very competitive environment, it’s crucial to understand the consumer.”

Retailers may also have to become more selective about what they stock, according to Foraker. “Twenty to 30 percent of shelf space is filled with product that doesn’t sell; with knock-offs that don’t sell.”

Another key to retailer success is for the industry to band together, said Mo Siegel, founder of Celestial Seasonings. “We need to get together to unite and drive cost down,” he said. “This means that manufacturers have to give naturals stores a break and product differentiation. [Naturals retailers] need a head start; manufacturers can’t give the good price to Kroger’s.

Priya Hadji, CEO of World of Good in Emeryville, Calif., echoed Siegel’s sentiments. “We need to draw strength from what our industry is all about. Our customer base is counting on us to tell them why we’re here—what to expect from us.”

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