10 trends in natural retail to know about

Smaller boxes

A 7,500-square-foot Office Depot? Smaller stores are adding up for the office supply megachain and the likes of Best Buy and Whole Foods Market. Sure they might not all follow the less-than-10,000-square-foot mold, but they are shrinking their floor plans to build out their brands and better serve their customers.

Magnus Ohlsson Retail Management, an international retail consultant company, included the idea in its retail forecast last summer, saying “Smaller stores will continue to grow as it means lower investments, closeness to market and higher sales per sqm as well as energy efficiency.”

In our industry, retail leader Lisa Sedlar’s betting on the trend on the natural foods front. Sedlar (pictured) left Oregon’s successful New Seasons to start a chain of small, convenient (see the next trend) grocery stores that lean heavily local, organic and natural.

Be on trend: Review why the big boys are moving in this direction. Likely, you, as an independent natural retailer, already fulfill these customer desires. This is the year to make sure you get your story, your message out there.

Convenience

We’ve reported it here throughout 2012. Customers want healthier food choices and they want it as easy as possible. So, 7-Eleven, Walgreens and Duane Reade and others are stepping up with new offerings in their traditionally convenient store formats. The concept of convenience is really driving Lisa Sedlar’s move to a small-store format noted in our first trend, smaller boxes.

The Hartman Group also points out the move by convenience stores in its Ideas in Food 2013 report, writing: “Watch for mass drug to continue upgrading fresh and convenience while C-stores play catch-up in attracting female shoppers. Reimagined vending and healthy snack delivery demonstrate that higher quality can and should be available 24/7.”

Be on trend: Make sure you make convenient offerings known and truly convenient for your customers. Sedlar offers three tips for offering convenience in your store. Perhaps you could grow your brand throughout your community via healthy vending machines, too?

Customization/personalization

Forget the “Me” generation, it’s now the “Me” nation. New Hope Natural Media, in partnership with Sterling-Rice Group, last year published the research report NEXT: The Natural Products Industry Forecast 2013 that looked at macro forces moving the natural products industry. Included is what’s being called “intelligent customization,” the idea that customers want it their way.

Packaged goods companies are finding ways to serve the individual, it shouldn’t be difficult for retailers.

Online natural foods retailer Abe’s Market has dedicated recent funding it acquired to offer its customers a more personal approach to shopping. "Every day we hear from hundreds of consumers with particular needs and wants--whether it be gluten-free, organic, sustainable, etc.,” Richard Demb, cofounder and CEO of Abe’s Market told Fast Company recently. (Co-founder Jon Polin is pictured at the left.)

The report said: As such, Abe’s Qualities ranges from the more recognizable categories such as USDA organic or vegan and takes it a step further to curate by attributes such as paleo diet-friendly, BPH free, made with plant-based or upcycled materials and about 200 more. You can also choose from categories like “where it’s from” to buy the most local goods or “Nasty Free” to ensure your lemon peel is made from non-genetically modified fruits, for example.

Be on trend: Some say personalization and customization is just giving great individual attention in the retail environment. That’s one step. Review how you and your staff help customers find exactly what they need very easily. Then consider how you might take it the next step further. Do you offer made-to-order choices in your deli? Do you have nutritionists offer personalized advice?

Transparency

Transparency’s old news you say? The story’s not over. Just look at the attention one grocer received after his decision went viral. The Green Grocer received national attention after owner John Wood (pictured) posted a picture on Facebook that showed a shelf-talker explaining why the store would no longer carry Kashi cereal.

The authentic message resonated with tens of thousands across the nation.

Be on trend: Transparency isn’t about virality–but the social storm started by Wood shows the power of being open and honest with your customers. They’re tired of corporate spin and want real connection with the businesses they choose to support.

Traceability

Consumer concern about the roots of their food will continue to grow. Just think how pink slime and gestation crates became big stories last year.

Retailers play a key role in helping customers learn where food comes from and how it’s produced.

What was initially perceived as a premium upmarket offering, transparency and traceability have become part of the cost of doing business, the Hartman Group said in its food report. The research company noted leading retailers in this area such as Whole Foods Market, which has its 5-Step Animal Welfare rating, and Target, which announced it will sell only sustainable and traceable seafood by 2015.

Even McDonald’s has a traceability app in Australia, where Macca’s fans can track ingredients of menu items.

The natural food industry has led the way with manufacturers such as One Degree Organic Foods (representatives shown left) using QR codes on its bread packaging that lead to video stories of the farmers who grow its ingredients. (Read more about them and other CPG companies in the February NFM.)

Be on trend: Natural foods grocers have used their signage and labels to tell customers where their produce and other local foods originate. Some include the miles traveled to the retail destination on these signs. You, too, can share such information and better promote your product standards like Whole Foods.

Social capitalism

Whole Foods Market is getting all of the attention for this because of John Mackey’s new book, Conscious Capitalism, but independent retailers such as Terry Brett (shown left) have been practicing these principles quietly for years.

The concept in short: Doing good for society is good business.

The rise of the B Corporation (the B for benefit) in recent years will likely continue, especially as more and more states adopt the concept as an official tax structure.

Be on trend: You don’t need to change your corporate structure to contribute to your community. Just be a good neighbor (but don’t keep it a secret, involve your customers and brag a little).

Local means more

Everyone in the natural foods business knows about the locavore movement. And we’ve all experienced globalism.

Well put them together and “glocal” is the rising term as local is the new global. Magnus Ohlsson Retail Management, an international consultant, touts the move to local business as a top trend driving retail.

Natural foods retailers have already seen it as customers seek local even more than traditional labels such as organic. But it’s not about food.

The financial collapse further cemented the corporation as the faceless source of consumer angst. The rising local movement includes consumers “mobbing” local retailers in cash mobs (a la flash mobs) to show support for mom-and-pop stores. NFM covers 10 ways to tout local in the upcoming February issue.

Be on trend: Laura Sheehan of Full Circle Market in Kentucky is one who loves to promote local in her store. Work with state efforts such as Kentucky Proud and show your pride with great merchandising of local products. (And watch for our February cover story for more ways show your love of local.)

Pop-up shops

Once the franchise of big chains hitting big cities, independent entrepreneurs have adopted the idea of pop-up shops for launching and expanding their businesses.

Be on trend: Offer space for local brands to pop up in your store. Such a promotion could help draw foot traffic from different clientele. Or use the concept to test the market for expansion into another part of your city.

It’s official. Everyone has a cellphone or a smartphone. OK, maybe not everyone, but what has become a small computer is ubiquitous. And ad agency Moosylvania recently found that 80 percent of smartphone owners want mobile-optimized product information while they’re shopping in stores.

That scares many natural products retailers. So this is the year to move past the fear and integrate your store, web and mobile experience—for the sake of your customers.

“Bricks and clicks” will become the retailing norm of the future, with every retailer expected to have a hybrid business model by 2025, Frost & Sullivan, a growth partnership company, said in a recent release.

Frost & Sullivan Program Manager Archana Amarnath said, “large scale access to connected devices, social media and digital checkpoints is driving the adoption of hybrid business models. The 'Virtual Store' is an excellent example of emerging retail technologies such as Augmented Reality and QR Coding being leveraged and integrated to offer a unique, convenient and innovative shopping experience. In fact, Tesco's online retail sales in Korea increased by nearly 130 percent with the introduction of Tesco's Subway Virtual Store.”

Joy Kemp (pictured left) of Dorothy Lane Market told NFM about the grocer’s app, which helps customers manage loyalty rewards.

Be on trend: Thinking mobile integration can mean click and collect shopping, a great convenience for the natural foods shopper, something they must be seeking as evidenced with the number of delivery options growing across the nation.

The mansumer

Yes, we’ll continue to talk about men this year.

As the Hartman Group said, “designated ‘Man Aisles’ weren’t as big a hit as intended this past year, the fact remains that men shop far more than marketers and retailers reflect in their promotions and advertising.”

Ecommercetimes.com has an excellent analysis of just how different these male shoppers are.

Be on trend: You don’t need to segregate male shoppers to serve them. Help them in the ways they want to be helped and carry the brands they want to buy (making them easy to find).