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“Today’s shopper wants it all—everyday low prices and promotions,” says Colin Stewart, senior vice president for consumer packaged goods at marketing firm Acosta. “There’s been an overall decline in promotional lifts over the past three to five years, but most shoppers still enjoy the thrill of the hunt and feel good if they know they saved some money.” To give customers that feel-good boost—while buoying the bakery’s sales—look to the major trends shaping customer habits and expectations. Then price accordingly.
Grocery sales have become so common that it’s harder and harder to generate buzz. “Shoppers have been saturated with promotions,” says Stewart. And unless the sale item is an absolute favorite or a truly notable discount, many shoppers don’t make the purchase. Yet because customers expect these promotions, bakery managers can’t abandon them altogether.
Mix promotions with valuable experience and information: Against the steady drumbeat of grocery sales, the occasional super-deep discount does still get noticed. However, another tact is to pair special pricing with experiential promotions, suggests Bill Sussman, president of influencer marketing company Collective Bias. Cake-decorating classes and bread-baking workshops can attract potential customers. In addition, studding these outreach efforts with handouts containing useful content—from the history of apple pie to the proper way to braid a challah—sets your bakery brand apart.
Gone are the days of 100 percent customer loyalty. Today’s shoppers are less loyal to both brands and retailers, Sussman says. And while that may vex some marketers, it can also bring big opportunities. “Grocery stores have the chance to capture the eyes, minds and, most importantly, wallets of consumers based on their willingness to jump from brand to brand,” he says. This holds especially true with Hispanic millennials: According to a recent study from marketing consultancy IRI, more than 70 percent are willing to try a new food product.
Catch shoppers’ attention with something shiny: Shoppers may be open to a new bakery item, but a low price alone isn’t enough to entice them. Visually engaging in-store displays are essential, says Sussman. And to pique the palate of more adventurous shoppers, lean heavily on interactive displays, like food demos and samples. Even if the bakery items aren’t tagged with rock-bottom prices, the experiential promo can sway curious shoppers.
The surge of sales in meal kits, take-and-bake offerings and prepared foods all underscore shoppers’ demand for convenience—and how they expect grocery stores to meet it. Roughly half of shoppers don’t decide what’s for dinner until two hours before mealtime. This lack of planning is good news for bakery prices: “Shoppers tend to have a value threshold driven by the type of trip they’re on,” Stewart says. “If they’re on a mission to buy prepared food in a grocery store for dinner, the pricing thresholds are much broader, and shoppers typically aren’t comparing price points across channels or retailers.”
Know when to promote ease over price: Save the sales for bakery items that are more likely to be part of the weekly shopping trip. “A Gen X household with two working parents may pay up for convenience,” Stewart says. So, emphasize convenience over value when appealing to these customers; package fresh bread and single portions of dessert alongside prepared chicken and vegetables for a grab-and-go meal that effortlessly features bakery items. Consider moving prepped meal kits to the front of the store, so shoppers can swing through after work in mere minutes.
Old-school coupon-clippers want the absolute lowest price—even if that means hours of effort. Millennials? Not so much. “Millennials love promotions that save them a quick buck without having to try too hard,” Sussman says. For these shoppers, coupons and circulars take a distant backseat to easy apps, like Ibotta, which offers cash back with a quick receipt scan. “Millennials respond positively to brands that lean heavily on innovation and are more likely to spend their money at stores that are continually finding better ways to cater to their desire for cost-effective options,” he says.
Embrace Technology: You don’t have to ditch the “buy 10 bagels get one free” punch card—that may still resonate with some shoppers. But now is the time to double down on tech investment, whether that means wading into the shallow waters of loyalty apps or getting in deeper with on-demand grocery delivery services. “Mobile apps that can inform, educate and take the friction out of a purchase occasion have a value that, in many cases, will trump price alone,” says Stewart.
While the bakery alone may not be able to drive store- or chain-wide tech adoption, buyers can work with managers in other departments to ensure company leaders are well versed on the benefits of bringing mobile loyalty into the store.