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04.14.2010

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Pantry to Pantry

By Jarrett Paschel, Ph.D.

Though I don’t necessarily recommend the practice to others, I often use my father-in-law as inspiration for innovative ideas in the CPG and associated retail sectors. Some men share common interests like hunting with their fathers-in-law. Others bond over sports. Still others plastics. And when Stan and I get together, we always talk about the grocery business—in part because he was a VP of a large CPG firm before retiring.

Shortly after meeting him for the first time, we went shopping for ingredients to make a special welcome meal. Knowing we were visiting Wegmans country, I thought I'd impress him with something different than his tried and true. Rule #38: Never try to impress one’s father-in-law:

What are they doing? These guys obviously don’t know their business. There must be more than 20 different kinds of bread here. And they are arranged loosely in these bins, as if nobody could take the time to shelve them. Here’s the deal, in a real grocery store, not one of these fancy places, you need at most three kinds of bread—white, wheat and rye—and you store it properly in shelves so it is neatly organized and easy to locate.

Not being (too) stupid I shrugged and moved on to more important matters like trying to figure out how to hide an extra bottle of wine under the groceries in the cart.

But the more I thought about it, the more I recognized he was on to something. Even though he didn’t quite make the connection, I realized that his observation regarding the organization of products on shelves was spot on. In other words, how one chooses to organize products on shelves is a critical point of differentiation between traditional retailers and those promoting more enjoyable food experiences.

Because his was an era that changed little, if at all, during his tenure, it should come as no surprise that he found Wegmans to be a foreign world even in his own backyard. In his era, grocers treated the store and the shelves within them largely as a warehouse. Efficient, orderly organization of the products on shelves made for efficient restocking as well as simplified product location. To be certain shoppers themselves benefited from this scenario, so long as the grocer never decided to make changes to the store that required moving products (to this day, product resets remain one of the most frequent complaints echoed by most shoppers).

But as much as shoppers may have benefited from the convenience of this layout, it was far from inspiring. It made for an experience that was much more like walking the halls of a library than anything celebrating food. Looking at more recent developments, a symbolic pattern begins to emerge. Namely, the transformation from what was formerly a warehouse of products to a more engaging food experience. Anchored by an ever-growing constellation of departments in the perimeter, this retail transformation is itself a driver of the single biggest trend of the past 20 years — the movement toward all things fresh and higher quality.

So the real take away here — the Eureka if you will — is that the organization of products has a lot to do with how consumers perceive and understand food experiences. Organize the products with military precision—stacked, efficient, orderly—and the consumer will treat the grocery experience, and, by extension, the food experience similarly. In this world the goal is to get things done with expedience and efficiency. There is little room for passion, creativity or spontaneity. Food preparation and consumption is more of a means-end game that favors efficiency over pleasure.

What’s even more interesting is that this relationship between the organization of food products and the consumer’s orientation toward the food experience can also be found in consumers’ pantries. In our ethnographic work we typically find that consumers who cook from their pantry are less interested in the fresh proposition, and generally less interested in food for food’s sake — a mark of what we know from our work with occasions as an Instrumental Eating Occasion. Conversely, those more passionate about food tend to cook largely with fresh ingredients sourced from a recent trip to the market or things found in one’s refrigerator, more of a Savoring Eating Occasion.

The two photographs below do a great job of highlighting the symbolic nature of this relationship:

As careful researchers we must note that, technically speaking, causality cannot be determined. In other words we cannot say with definitive proof that the organization of products on grocery store shelves drives consumers toward more banal and mundane perspectives on food. In fact, one could argue that grocers are merely responding to the way consumers tend to approach their food preparation needs.

But we simply do not believe that the latter is true, as evidenced by the fact that many of the food retailers encouraging the celebration of food—especially those with heightened focus on the fresh departments that line perimeters—are finding enhanced loyalty and higher margins.

So at the end of the day, how you choose to organize your store has important symbolic implications for how your customers come to understand food. Choosing the traditional model may prove more efficient in the short term, but how does this affect your competitive edge in markets that are rapidly evolving? Alternatively, should you choose a store layout and design that encourages passionate engagement and the routine celebration of food, such as Wegmans, might you not expect your customers to respond accordingly?

Of course, we are not suggesting that consumers are always looking for a joyous food carnival. To that end it likely is the case that consumers on more mundane occasions may benefit from a more rationalized merchandising approach. But as our data suggest, the number of such occasions has been dwindling for some time now, and this is a trend we do not believe will reverse itself. Plus, the competitive advantage in these occasions is mostly driven by convenience and price—a platform that might prove tenuous at best.

And to the naysayers or others who question this analysis, I offer yet another data point. My retired father-in-law opted for early retirement when the company he worked for underwent a massive reorganization. Whereas the firm formerly maintained a traditional, vertical, top-down authority structure—much like the military—the organization was forced via market pressures to become less centralized, less vertical, and more flexible. Just as he found the cavalcade of bread selections chaotic and poorly organized, so too did he express frustration with the so-called “new” management style, which emphasized autonomy and empowerment over military like efficiency. Not surprisingly, he opted out early.

Ironically, while he found the less traditional, less vertical, and (arguably) less efficient authority structure of his reorganized company too much to handle, he actually came around to the Wegmans proposition and shops there on his own now.

Every time we visit we now spend time grazing around the olive bar and sampling fine cheeses before picking the evening’s wines—a task that has thankfully transitioned from the singular to the plural, which is important for good family relations.

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