CHICAGO — As the commercial baking industry learns to navigate the digital landscape — whether selling direct to consumers online or delving into omnichannel with retail partners — brands must be aware of the benefits and challenges that come with it. CPG and consumer shopping behavior is not one-size-fits-all, and while e-commerce is picking up steam at a record pace, the key is building a bridge from in-store to online, rather than focusing strategies on one channel or the other.
During a presentation on the boundaryless consumer during the American Bakers Association’s annual convention, held March 26-28, Jonna Parker, principal and team lead for fresh foods at Circana, joined Molly Hjelm, group director, advertising, for Kroger Precision Marketing at 84.51 LLC, a subsidiary of the Kroger Co.; Omar Haque, VP and GM of omnichannel for Bimbo Bakeries USA; and Alicia Kuri, eCommerce category and shopper insights for Nestle Coffee Partners, to discuss the impact of omnichannel trends on bakery markets.
Looking at the in-store experience, shopping revolves around lists. And historically, bakery items like bread have anchored the grocery shopping list.
Not only that, but bread is what Haque referred to as a “basket builder” for both online and in-store purchases. For example, Haque said, items like bread or crackers will be joined in the basket by proteins and spreads.
With that comes real merchandising implications, some of which can present challenges.
While non-food items like toothpaste or laundry detergent don’t require a specific relationship with the channel — those items look and feel the same whether purchased on Amazon or in a grocery banner — fresh baked goods rely on experiences and trusted relationships with the channels where they’re purchased.
“For a baked good, it’s about knowing that someone from the retailer picked that particular item,” Parker said.
With those relationships come particular benefits and challenges when it comes to how brands and their retail partners interact with omnichannel consumers.
Parker pointed out that changing a merchandising setup in-store — especially for retail banners that have up to thousands of locations — takes strategy and heavy lifting (literal and figurative). Meanwhile, a promotional switch online can happen in a matter of minutes.
“We all need to figure out, in partnership with our retailers, how to improve the shopper experience and make it less transactional and enable the discovery and exploration that is so fundamental in-store.” — Alicia Kuri | Nestle Coffee Partners
Then again, despite the labor intensity of in-store merchandising, it does create an experience for shoppers who still prefer to take their lists into the brick-and-mortar. In-store merchandising also creates opportunities for impulse purchases, which often account for up to half of the basket.
“That’s the challenge we need to solve for,” Kuri said. “How do we replicate that in-store behavior when someone’s online?”
E-commerce is more transactional vs. in-store shopping, which is experiential. Buying groceries online is more appealing to shoppers who just want to stick to the list. Completing the transaction is easier when the path to purchase is shorter.
“That’s something we’re trying to solve for coffee, too,” Kuri said. “How do you provide those pathways that build the basket, to have that impulse and still be able to discover a new or occasion-based purchase?”
With that basket-building mentality, there is uncharted territory to create prompts for how different products relate to one another. For example, if a consumer adds coffee to the digital cart, is there an opportunity to add prompts for baked goods like bagels or croissants? And with those items, additional prompts could suggest basket builders like cream cheese or sweet spreads.
Just as shoppers are boundaryless, as Parker indicated in her presentation, so too are the possibilities to take them through a digital experience that mimics the trip through a brick-and-mortar.
“We all need to figure out, in partnership with our retailers, how to improve the shopper experience and make it less transactional and enable the discovery and exploration that is so fundamental in-store,” Kuri advised.
Over the past several years, Hjelm noted, Kroger has worked to develop a digital shopper experience that seamlessly allows people to get their preferred items into the basket and take advantage of the same deals they can get in store. The retailer has also jumped on the opportunity to create convenience by enabling “Did you forget” prompts before the shopper checks out online.
Enabling repeat purchases is also a key benefit to e-commerce. For instance, Hjelm also described howejelHjelHh Kroger offers its digital shoppers the option to “start my cart” by building off the same items from their previous order.
While the ease of transactions remains a key benefit for e-commerce, there’s still a qualitative element that is proving to be a hard habit for consumers to break. When it comes to perishable foods in particular, there’s the physical bond consumers have with their purchases.
“People have certain habits,” Haque said. “They want to feel and touch products like bread. Those habits will take time to change.”
The fresh factor is a big reason for this. With items such as baked goods, people want to know they have the ability to purchase the freshest item to maximize its shelf life. Adding expiration dates to perishable foods is a strategy some retailers are employing to help shift that thinking.
Consumers’ increasing concern for food waste is another factor playing into the priority of freshness, and it factors into the food purchases they make online. It’s not always an either-or proposition. Thinking of one product or brand fitting perfectly into any particular channel is just a realistic go-to-market strategy. Food shopping, especially for baked goods, should be seen as an ecosystem, Parker suggested.
It’s about working together with retailers and commerce platforms to build bridges from channel to channel.
Because of that, the bridges from online to offline must be trustworthy. There have to be authentic opportunities for consumers to connect with products and brands that guide them to seamless points of entry, regardless of the channel.
