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McDonald's Is Eating Your Lunch



4 Steps on How Grocery Can Fight Back


At the turn of the last century, 2% of meals were eaten outside the home, now the number is almost 50%. The reality is that the eating out phenomenon is a sledgehammer hitting the only two metrics that matter to Grocery Stores – traffic and basket.


The percentage is growing and in the face of health experts who for decades have connected fast food to our continent's growing problem with obesity and diabetes, and to family psychologists who continue to trumpet the importance of the family meal.


A number of research studies have concluded that children who have regular meals with their parents get better grades, have higher self-esteem, are more likely to stay out of trouble, or have eating disorders like bulimia and anorexia.


So why are consumers ignoring all this sage advice in favour of the drive-through or a booth at their favourite QSR? What can grocery stores do to win back some of this business?


If I was consulting the Grocery Store...


First Step:

Identify the forces that are pushing consumers to eat out, and more often.

Time-Starved: The number of North Americans working more than 45 hours a week has gone up exponentially in the past 15 years, and in turn, their kid's schedules are super programmed. Scheduling "Family Inc" is becoming increasingly complicated, with dividing and conquering being the norm.


Space Starved: As homes and office spaces get smaller, and single residents more common, there is a need to find your 'third home' and restaurants and cafes provide a great place to see and be seen.


Attention Starved: The family meal was where parents once demanded undivided attention. No longer. At home the attention is often diverted to the television, smartphone, or tablet - and Parents are equal offenders. At restaurants parents often leave electronics at the door and get to have a real conversation with their kids, even if it's only for the nanosecond it takes the teen to inhale their quarter pounder.


Palette Starved: The Internet, Food Channel and our Multi-Cultural Society have unlocked the inner foodie in all of us. Our taste buds have woken up and we want an expanded and more adventurous palette. Kids ask for sushi the way I used to ask for Kraft Dinner. Fast food has responded much faster than Grocery - and you don't have to make it. Even street meat is given away to themed food trucks.


Cash Starved: Consumers' discretionary income has fallen for over a decade, based on a combination of trading down jobs, taxation, and the cost of living. QSR's strategy is meals for the masses. McDonald's wouldn't have survived without their dollar menu. 'He who sells the most and cheapest wins'.


Game Starved: Society has become a big game to many consumers who are on the hunt to get more and pay less. Restaurants have stepped up to the counter and gamified their business with new formats, menus, loyalty cards, promotions, constant advertising and the shopper's favourite word 'free'. Free coffee, kids eat free, free refills, and all you can eat.


All of these forces combine to create a mighty headwind for grocery stores to win back the meals at home, especially when meals at home require the consumer to travel, shop, unpack, prepare, serve, clean, and when they clean out their fridge on garbage day throw out spoilage.


Second Step:

Determine if the grocery store's appetite.

They can either continue to see their customer base erode, or they can do something about it.


"the only real defence is an active offence" (Sun Tzu)

If they were willing to change, my next step would be to have the Grocery Stores have an honest look at the user experience how your shopper behaves, their attitudes and emotions when shopping at your store.

The key is to not isolate your store as an oasis. It's part of their ecosystem and one where the world they covet is within arms reach of desire. It's why it's called a smartphone. Consumers are becoming increasingly sophisticated in understanding value - not just the cost of something but other factors that are important like time, satisfaction, well-being etc.


The organizations that have succeeded against all odds are the ones that reinvent the user experience based on what their customer values most. At a time when electronics companies were piling on features, Jobs made technology transparent and focused on the end game - putting 1000 songs in the consumer's pocket with a product an Oragantun could use. Google created the best algorithm for connecting the dots. Amazon is the world's biggest vending machine. Nespresso took back the share of the cafes by enabling consumers to become home baristas. Mcdonald's one-back breakfast with inexpensive coffee you could drink. The list of winners - H&M, and Zara with disposable fashion, Walgreen with affordable healthcare, Dollar Stores with their Treasure Hunt, Waitrose in the UK with their supermarket farm shop all do improve the user experience - moving their proposition from providing products and services to enabling life and livelihood.


When I look at the average grocery store I see an operation designed to fulfill the needs of the different buying groups, and one that tries to mitigate the high costs of unions. One that focuses on their bottom line, versus reinventing and reimagining the shopper experience.


When I look at the gauntlet they create for the shopper to make a meal at home no wonder they are leaving grocery stores in droves. Society has set a high bar for the family meal. It has to be tasty, affordable, healthy and convenient to make or assemble. A high bar for sure and one that has to be jumped in-store by racing around an entire store - fresh, dairy, dry goods, protein, sweets, without any flow and the occasional speed trap is thrown in as the store slams in a health and beauty section, barbecues and fashion in the hope of winning some higher-margin sales.


Third Step:

Find an area where you can improve the user experience immediately.

We have identified what the user needs - taste, health, affordability, convenience, and what they are starved for: time, cash, attention, adventure. The easiest place for a Grocery Store to respond is with their HMR Strategy. It is there where you can bundle and merchandise solutions for the consumer, without having to fight the political will and stubbornness of the different buying groups and departments.


Yes HMR. It's your Trojan horse for winning back the consumer and the restaurant occasion. HMR is where you can differentiate your store by understanding the unique needs of your shoppers by daypart and offering them both familiar foods and foods with a twist. Menu items they crave. It’s where you can create immediate appetite appeal and it's where you can differentiate yourself.


Fourth Step:

Get Creative. Test and then invest in what works. Here are some possible tactics.


  1. Hire a famous chef to design your menu and leverage earned, paid and shared media to tell your story.

  2. Be something the restaurants aren't. Take a stand against high fructose, high sodium, high starch and hydrogenated oils.

  3. Create a solution and solve a problem. Build a juice and smoothie bar and also leverage your tired fruit and veggies that might not merchandise well but still pack a healthy punch.

  4. Get a nutritionist on board. Connect nutrition to preventative health. Cold Season create food packed with Vitamin C. Winter make sure you are ramping up Vitamin B. By using products like Ginger, Tumeric, Black Beans, Lemons, Salmon etc in your HMR menu, and espousing the benefits you will also motivate the shopper to buy it in your grocery store. It's paid education and sampling wrapped up in one.

  5. Fish where the fish are. Focus on your customer base. Age, Ethnicity, times when you are busiest. Use data to not only plan and refine your HMR offering but to encourage people to buy more and more often.

  6. On the Go means On the Go. Create unique portable and reusable containers. Not only are they environmentally friendly, but the shopper can also use them to eat on the go, or to take your meals to the office.

  7. Healthy and Affordable. Restaurants seem inexpensive but when you really add up the entire value equation - including their ability to sell you more, HMR is better for you and your pocketbook. Let your shopper know how much they are saving - money and fewer calories each year bringing their lunch to work.

  8. Bundle. If shoppers love your Mango Salad at the HMR bar make sure you give them coupons to shop your exotic fruits in your produce section. The same goes for the signals sent when an HMR shopper chooses fish over meat, salad over fries.


These tactics and more are what you need to fight the headwinds hitting the grocery business. You no longer are fighting simply against the grocery store down the street or the front page of the flyer. You are fighting for the attention of the consumer and the only way to succeed is to give them a user experience that they covet and one that will stop Mcdonald's from eating your lunch.


 

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