KANSAS CITY - Economics 101 teaches what happens when the amount available of a certain product goes up or down.
What’s true of volume can also be true of time: a narrow window in which a product is being sold, for instance, can get consumers’ attention and be a big sales driver.
That’s the appeal of limited time offers (LTOs), which capitalize on consumers’ desire for novel products and bring a “Buy Now!” urgency that can do wonders for bottom lines - whether it’s the holidays, the season for a certain fruit or vegetable, or just any occasion when retailers want to spice things up.
Limited time offers allow category teams at Carlisle, Pa.-based retailer The GIANT Co. to bring in items that are seasonally relevant for its customers or items that are new and innovative, said Brian Lorenz, GIANT’s director of daily and bakery. It also gives the category teams the ability to test products via a “while supplies last” or small batch offering.
LTO growth in GIANT perimeter departments has been robust in recent years, Lorenz said.
“Historically, our LTOs have flourished in center store. Over the past few years, our fresh teams have ramped up offerings. While our fresh teams have always leveraged seasonally relevant flavor profiles in product selections and availability, participation in Limited Time Originals programs has grown over the years.”
“Limited Time Originals” is the term GIANT gives to four store-wide themed promotions throughout the year. This year’s fall installment, launched on Sept. 4 with more than 35 items, 10 of which were in perimeter departments.
Next up, the Limited Time Originals Holiday program, hit shelves in November with more than five brand-new items in fresh departments, Lorenz said. In addition to these seasonally relevant full-store campaigns, each category team is working with its vendor partners to provide GIANT customers with seasonal flavors.
“Seasonal flavors shouldn’t just be available in cereals and candles,” Lorenz said. “Our customers’ desire for bold flavors ranges from kombuchas to beer, and cheeses to marinades. Each category team works with the Private Brands team to leverage customer insights and engage our vendor community to develop new items regularly. The innovation pipeline is constantly churning to bring fresh ideas across our stores.”
Fresh bakery treats rank high on GIANT customers’ shopping lists from donuts to cakes to breads and cookies. Outside of these events, The GIANT Company has worked with some of its local partners to craft seasonally relevant items, like Mad Elf Cheese, which launched in October as a partnership between Troeggs, Caputo Brothers and GIANT.
Looking ahead to 2021, GIANT’s four Limited Time Originals promotions will include Limoncello, Sol Tropical, Fall and Holiday. In addition to the storewide programs, Lorenz said, GIANT will supplement with seasonally relevant "in-and-out" items too.
Every year for the past seven, Dayton, Ohio-based retailer Dorothy Lane Market has promoted comice pears from Oregon during December, said Michelle Mayhew, the chain’s produce manager.
Customers know they’re only available for a limited time, because they let Mayhew and her staff know, often a long time in advance.
“People ask for them, wait for them, and once they’re gone, they’re gone,” Mayhew said.
The special fruit come from Naumes Pears, which Mayhew said produces the best-quality pears in the market. Comices are an old-fashioned variety, which taps into nostalgia for many shoppers, only adding to the allure generated by the program’s LTO status. Naumes’ comices are as juicy as peaches, Mayhew said, providing further value.
Naumes custom packs specifically for Dorothy Lane, and the retailer makes sure to spread the love throughout the store, dipping them in chocolate, for instance.
“When we do something like that, we try to involve every part of the store in it.”
Other LTOs in the Dorothy Lane produce departments include promotions for New Mexican Hatch chiles, locally grown corn and morel mushrooms, Mayhew said.
When Hatches are peaking, it’s a “couple of weekends party” at Dorothy Lane, Mayhew said. In addition to selling them in bulk in the produce department, stores incorporate Hatches into cornbread, bratwurst, deli prepared dishes and other foods throughout the store.
Seasonal corn from New Carlisle, Ohio-based Brentlinger Farms is sold at Dorothy Lane from early July to early- to mid-September. The grower and the retailer have been doing it for 70 years, Mayhew said.
“People cannot wait until that corn comes around,” she said. “People start asking for it in May, and we say, ‘In Ohio, it’s knee high by the fourth of July.’”
A few years ago, Dorothy Lane bought a corn roaster. Now when the Brentlinger fresh corn deal is in full swing, the retailer fires up the roaster in front of the store and sells “street corn.”
Locally grown morels, if Dorothy Lane can get them, run as an LTO in early spring.
COVID, unfortunately, has definitely put a dent in the retailer’s use of LTOs, Mayhew said. For instance, Dorothy Lane couldn’t get its “million-dollar peaches” from a grower in California flown in.
“Things have been restricted. We can’t demo like we used to. We can’t do the cookouts we normally do. I’m waiting like everybody else.”
The online impact
Limited time offers in grocery retail were changed forever by Amazon and other tech intrusions into traditional retail, said Raj Shroff, principal at Columbus, Ohio-based consultancy PINE Strategy & Design.
It’s now second nature for people to check prices on a given item and shop at multiple stores, depending on who has the best offer. Continually fighting low-cost wars has taken much of the shine off LTOs. Unless you’re Walmart, it’s a battle that’s hard to win.
“LTO has been table stakes for a long time, and I don’t see it changing,” Shroff said. “You have to do it, but it’s hard. It’s a key value indicator for shoppers, and it’s going to drive traffic, but it’s tough in this day and age to give up valuable margin to get those people in there.”
With LTOs not as valuable to grocers as in the past, more and more are turning to investing in their own store brands to generate new sales in the perimeter and throughout the store, Shroff said.
Many grocers already have strong brands to build store-brand programs around, he added. “They have higher margins, and they can go in aggressively on prices against established industry brands.” Still, LTOs aren’t going anywhere, and Shroff said there are ways to update them to make them more viable.
Historically, the same LTO was offered to everyone. With technology, they can now be microtargeted depending on a variety of demographic differences, he said. Many retailers are still playing catch-up on the technology, but they’re getting there.
“They can now be more thoughtful about it, more targeted, which is a much more effective use of dollars than just blasting it out to everybody,” he said. “I think we’ll start to see a lot more personalized offers.”
Taking foodservice’s cue
Neil Stern, a consultant with Chicago-based McMillan Doolittle, said that traditionally, limited time offers have been more common in foodservice. In recent years, however, that’s started to change.
It’s growing in supermarkets as a way to drive traffic and excitement,” he said. “It creates reasons for customers to come.”
Limited time offers, Stern said, can be anything around a holiday or a seasonal event driven by product availability or scarcity. And fresh departments have natural opportunities to sync this around growing seasons and distinct product cycles.
Limited time offers are not only becoming more common, Stern said — their efficacy has been amplified by social media, which brings more attention to LTOs.
There are plenty of great examples of LTOs across all fresh perimeter departments, Stern said.
Just recently, for example, Gelson's and Bristol Farms and other retailers did a great job with Hatch chiles, he said. It’s a produce item that can also be sold in bakery (cornbread) and retail foodservice, giving it extra punch as an LTO.
Stern also cited Met Markets in Seattle, whose recent Peach-o-rama LTO promotion focused on local peaches. Like Hatch chiles, cross- departmental opportunities abounded, and again, could extend across departments.
In seafood, meanwhile, many great programs are built around seasonal catches like King Salmon, Stern said.
“Events can also be created around holidays — king cakes for Mardis Gras, for instance — back to school or any event, like the Super Bowl, that enables creative product developments and promotions,” he said.
Driven largely by social media, LTOs will continue to evolve and proliferate in the coming years, Stern said.
“We’ll see more creative ideas and more ‘made-up’ events,” he said. “They can be around celebrations, large and small, and only limited by a retailer’s creativity. I would also expect to see many more celebrations of ‘local.’”
This story was featured in the November issue of Supermarket Perimeter. Click here for the full issue.