Technology now enables consumers to create their own customized supply chains and design products to meet their particular health goals, dietary desires and cultural values. This creates an interesting question for food retailers — how do you deliver this trend towards customization in a brick and mortar store?
At last month’s FMI Midwinter event in Miami, Anthony Flynn shared his story around the creation of YouBar, a customized nutrition bar company he founded in 2006 with his mother. Flynn began creating custom protein bars at home to meet his taste, health and allergy needs. He loved eating his unique bars so much he thought there would be a huge market for customized protein bars made freshly to customers’ own taste and nutrition needs.
Flynn believes the success of YouBar is due in part to the fact that millennials love customizing, and customize everything from apparel to music to news feeds. With the growth and buying power of millennials, Flynn pointed out the increasing number of companies specializing in custom food manufacturing, offering products such as custom granola, ice cream, chocolate, and tea. He reinforces the influence of this customization trend by pointing out that CPG manufacturers have also entered the game, be it General Mills with cereal,P&G with special coffee blends and M&M’s Mars with “My M&M’s.”
But is product customization a profitable business?
Flynn explored this question in his book, “Why Customization is the Future of Business and How to Profit from It.” His research found that there are two major components to making small batch manufacturing profitable: a configurator and batching. A configurator is a website that allows the consumer to create their product, while batching is an algorithm that combines orders based on common elements in the production process to minimize waste while maximizing efficiency.
“My research also found that while more and more consumers love the idea of customizing products, they are really not good at knowing what they want,” Flynn said. “So to address this, companies have reduced the number of choices and have provided a more curated experience based on understanding consumers’ tastes and preferences.”
The existence of products such as subscription boxes offered by Blue Apron demonstrate the viability of curators in the food space. Subscription boxes provide recipes and all the ingredients required to prepare a meal as selected by consumers. In November of 2014 Blue Apron shipped over one million boxes, valuing the company at over $500 million dollars. Flynn also noted the proliferation of “celebrity curators” that consumers subscribe to and receive items the celebrity of their choosing selects, likes, uses and endorses. The fundamental concept behind these curators is their ability to collect and process information, trends and data, and facilitate an efficient and effective product selection process that their “subscribers” will value, appreciate and pay for.
Bringing curation into the store
Flynn used the example of purchasing eggs as an example of how “egg-hausting” making a product decision at the supermarket can be, and how curation can be brought into the store. With the overwhelming variety of eggs available to the shopper (Cage Free, Omega 3, brown, etc.), having a curator available to help make the egg purchase decision would be of value. Through the use of in-store beacons, a shopper would download the store app and subscribe to their favorite curator site.
Beacons enable the store to know your preferences, how often you’re in the store and where you are in the store while shopping. So, when the shopper approaches the egg section, their chosen curator would send a message to their phone helping them decide which eggs to purchase, and a coupon might also be provided as well as information about the eggs, the farm where they came from. Beacons and curators bring digital solutions into the store and create a personal, customized experience for the shopper.
“By the end of this year, 35% of the top 100 retailers in the U.S. will have in-store beacons in their stores, and that number increases to 85% by the end of 2016,” said Flynn. “Beacons are coming and they are coming fast,”
To further reinforce the opportunity that beacons present to food retailers, Flynn cited a marketing survey conducted by Swirl, which found that 60% of consumers opened a beacon-sent message and 30% purchased a product as a result of that message. In addition, 50% of survey respondents would shop a given store based on a favorable experience in beacons.
Beyond beacons, Flynn suggested other ways that food retailers can use technology to offer curation to their shoppers. He described the cheese section in a supermarket and the “cheese guy” who is well-liked and does a great job helping shoppers navigate the variety of cheeses to make their selection.
“Don’t limit your cheese expert to face-to-face conversations,” Flynn said. “Give him aTwitter account, offer a sign-up to receive emails or text messages with special offers and encourage him to host special events at your store so your shoppers can learn more about their favorite cheeses.”
Ira Gleser is the founder and president of Amplify Marketing Communications, a B2B marketing communications firm that helps connect brands to B2B audiences. He has worked in management, leadership and consultative roles in the beverage, foodservice, hospitality, financial services, consumer durables and retail industries, including companies such as Coca-Cola, MGM Mirage, Burger King, Charles Schwab, Tyson Foods and Lowe’s.