KANSAS CITY - As the grocery fresh perimeter continues to evolve due to changes brought on by COVID, reimagining convenience and enhancing prepared foods departments provides food retailers an opportunity to rethink the shopping experience and to better meet consumers’ needs.

For instance, according to Margie Proctor, design and marketing specialist for Hillphoenix, a part of Conyers, Ga.-based Dover Food Retail, a manufacturer of refrigerated, frozen, hot and dry display cases, there is now a trend toward food bar orders. Food bars are not going away, but they are being reevaluated.

Customers are reconsidering how they’re being merchandised, and smaller footprints for new bars are becoming popular — 12 feet in length, for instance, instead of the 18- to 24-foot units that were trending just a year ago.

“Retailers are also incorporating a self-service refrigerated or hot multi-deck case on the end of the smaller food bars for prepackaged merchandising,” Proctor said.

COVID also caused a ripple in merchandising with an increase in prepackaged items, which should also be top-of-mind with food retailers as they move forward post-pandemic, Proctor said.

“We are seeing prepacked items in multiple varying sizes being merchandised to accommodate from single households, empty nesters and all the way up to larger family size packaging.”

Over the past year, she added, multi-deck self-service shop-around modular islands have been popular display cases for merchandising prepackaged items with the versatility of case depths, lengths, shelf depths and the option of incorporating refrigerated, hot or dry merchandising areas around the islands.

With restaurants being one of the hardest-hit channels during the pandemic, grocery retailers gained new business by picking up much of that foodservice traffic. Now Dover is helping grocery retailers create a game plan for how to retain these customers post-pandemic.

“With a focus on food quality, grocery retailers have an opportunity to be the destination for the next take-out, delivery or meal consumed,” Proctor said. “Part of having a quality product is having the right equipment and display cases to hold and merchandise a product to the optimum temperature.”

Hillphoenix recently released its all-metal, inline service, made-to-order customizable counter with options for refrigerated and hot applications — and an option for a convertible sneeze guard.

Designing equipment and foodservice departments with flexibility in mind, Proctor said, provides grocery retailers with the ability to evolve with their shoppers, their menus, and — God forbid — the next pandemic.

“We have the equipment to fill the needs of retailers and continues to work with them to overcome the challenges of today, but also to help them look into what tomorrow may bring with regards to store design, equipment layout, merchandising and refrigeration,” Proctor said.

“The Incredible Shrinking Display”

It's hard to know which retail grocery trends that emerged or picked up steam during COVID will remain long after the pandemic has receded. But two IRI researchers are betting on one: new ways of displaying foods in the fresh perimeter throughout the store.

“One of the most impactful elements of merchandising in grocery, display has undergone significant changes – many of which may stay with us in the long run,” Jim Danielson and William Ilaria, members of IRI’s In-Store Solutions Group, write in a new report, In-Store Grocery Merchandising: More Changes on Display.

Efforts to accommodate social distancing have significantly cut into retailers’ display space, according to the report, a phenomenon Danielson and Ilaria dub “The Incredible Shrinking Display.” In 2020, retailers averaged five fewer displays than in 2019.

And, according to the report, the typical 2020 display had fewer items on it. Whereas a typical endcap in 2019 had 13.5 UPCs, the 2020 equivalent had just 12 in 2020. Those 1.5 fewer items add up quickly when multiplied across the entire store, according to another recently published report by IRI, “Reignite In-store Merchandising Effectiveness in the Grocery Channel.” 

“With space at a premium, what earns a place on display is shifting too,” according to Danielson and Ilaria. “Traditional display-dominating categories such as snacks and beverages feature far less prominently.”

Increasingly, retailers are allocating prime real estate only to the can’t-miss items that promise dividends on every inch of display.

Despite changes to the amount and type of items featured, however, displays remain solid sales-boosters, according to IRI. But as demand for precious display space grows, so do expectations for performance.

“In this pandemic era, retailers are taking a hard look at which manufacturers will be awarded display space.”

It’s more important than ever, according to the IRI analysts, for retailers to develop merchandising strategies that reflect their customers’ shopping patterns and preferences. Traditional metrics used to track sales, they write, don’t always translate to the best approach for driving volume and share.

“The industry must get better at leveraging in-store activities to fulfill merchandising needs. For example, does it make more sense to have one big ‘showstopper’ or several displays around the store to make sure you’re reaching consumers in the right place and at the right time with the right product?”

Looking ahead, Danielson and Ilaria predict “parallel trends of collaboration and competition.” Retailers and their supplier partners are working together better than ever — everything is becoming a partnership, and that “is one of the true silver linings of the pandemic.”

That said, stiff competition remains a reality of the industry.

“Elbow-to-elbow shopping may be done for the long run, reducing display space while increasing ROI expectations for months or even years to come,” according to IRI. “This signals that we’re heading into a true era of SKU rationalizing, which will lead to closer scrutiny of tertiary items.”

Merchandising technology adoption actions to take now

Advice from digital marketing specialists Insight:

  • Build customer engagement with the aid of interactive bots, mobile apps and a seamless e-commerce experience.
  • Personalize both the in-store and online experience by using advanced analytics collected by IoT-enabled devices to deliver targeted offerings.
  • Enhance worker collaboration with modern software and apps to improve store productivity and customer service.
  • Optimize business operations by automating repetitive tasks, updating outdated infrastructure and leveraging the cloud.

When combined, the IoT and AI deliver incredible insight that can help businesses better understand buying behavior, reduce costs and customize offerings. Some examples include:

  • Smart, digital signage for advertising and marketing
  • RFID tracking for better inventory control
  • Interactive kiosks for faster checkout
  • Targeted email, text or app promotions based on historic data