Op-Ed: The SKU Game: What Consumers Want Today
WENATCHEE, WA - While the name of the game today is “expect the unexpected and prepare where you can,” we are seeing signs pointing to a more diversified shopper who wants options and variety. Essentially the SKU game is in jeopardy. Increased dialogue between suppliers and buyers is more essential now than ever in understanding what is happening in the consumer's mind and wallet.
For context, there had been many retailers eliminating SKUs, not so much concerning the fact that they didn't want the SKU, but they were worried about distribution. Many moved to the 80/20 rule but fruits and vegetables are essential and nothing speaks louder than a limited or empty fresh produce department when demand is high. People are highly concerned about their health for good reasons, and produce has been a winner. We are even seeing more ads on the table with our customers in recent weeks and this is a great sign for all. We hope retailers continue to follow suit. We are starting to see an expansion of SKU’s at some chains in the South and Midwest, recently showing that building categories and taking advantage of the shoppers’ willingness to reach out for more items is starting to happen.
So, what can we do for the health of the bottom line at retail and the consumer? It's time to start diversifying SKUS again.
We at Stemilt Growers, like many in the industry, have experienced the dramatic and volatile push and pull of what feels like an instantaneous fluctuation in demand on the retail and consumer front. During that panic buying phase, demand required we ship everything we had in our coolers. And in many cases, an interesting thing happened: Consumers started pivoting their buying behaviors and began purchasing a range of products—especially certain larger and more diverse quantities, and packaging types, that retailers normally weren't selling at such a high ratio. Nobody buys what they don't want, and they were buying larger packaged quantities and increments in excess on apples.
The silver lining: The new variables in the changing and challenging climate of today's pandemic may be triggering consumers to diversify their buying behaviors and, even more, opening them up to building new patterns and adapting to new priorities.
Speaking specifically of Stemilt, we saw a massive shift to more bagged products because people wanted to get in and out of the stores quicker. While traffic patterns still fluctuate, our 5-lb bag program has remained in high demand, way more than it has in the recent past.
Specialty items are now increasing in demand again at retail as well and we're seeing a rebound in the number of varieties of apples we're selling, not just the quantity of apples. So, our game plan is adapting and we would like to see that follow through at retail.
Consumers are doing less frequency of shopping, but shopping with bigger carts or bigger baskets, and so we were recommending that retailers give them more size options with additional grab-and-go appeal. The consumer's eye is scanning incredibly fast so display-ready cartons and vibrant displays will also be key. And we've been recommending those opportunities for about a month now and it has helped retailers address the uncertainty of the shopper.
Another big data insight this past month is that organic product has sold at a higher rate of frequency and we expect that trend to remain. So, keep organics strong in produce departments.
Another arena to address with urgency is the online shopping area where products are not being categorized correctly—they don't have the right picture by them, they're not in the right location, they're hard to find, and the descriptions are not always true to the product.
We're finding all those errors starting to appear, and we're working with retailers to clean up their online sites because produce buying is impulsive, and we know produce is on the shopping list for a lot of people. If we do not have accuracy on the online shopping platforms, retailers will lose the consumer in a huff of frustration.
The produce department is an essential part of success at retail—whether at brick and mortar or online. If we stop giving consumers what they want, we may lose that brand and store loyalty that has been so coveted throughout the years for our industry.