The 3 I’s of Produce Merchandising...What are they?

In all my years in retail, one of the greatest learning's I had was early on as a produce manager. When I realized what customers wanted wasn't necessarily what I was presenting them. But the question I had was how do I know what they want...well it took me a while to get the answer. And that was, that I had to show them something they had no idea they wanted or even needed and in a way they could not pass by. This was the birth of the 3 I's...

THE premise of the 3 I’s in its truest sense is a principle as much as it is a best practice and standard of operation for retail supermarkets. While the fresh produce department is an anchor for most supermarket operators from a point of differentiation to the profit center of the store. That was not the case just a generation ago. When most supermarkets identified with consumers through their fresh meat department and center store variety. It was not until the late 1980s and early 1990s when consumers were exposed to exotic varieties, more year-round supply due to counter season production and the advent of value added / fresh cut produce. It is safe to safe that the fresh produce department from a contribution to total perspective grew exponentially through the 1990s and exploded in the early 2000s.

With that growth came the demand for more training and product knowledge for retail produce associates. To manage the plethora of items, varieties, packages, and seasonality of products based on production areas.

As all retailers had the same access to many more products, it became evident that to create awareness, knowledge and understanding of how to care for, handle and execute a strong merchandising program we needed something new and innovative.

Hence, the 3 I's of produce merchandising.

The first of which is IMPULSIVE

Retailers have an opportunity to engage thousands of consumers everyday but many times the opportunity is quelled by not capturing the IMPULSE buy from customers who otherwise would be willing to buy additional items if presented in a way that creates excitement and a path to purchase. Creating merchandising and the idea of something a customer wants to buy / try is what truly makes a produce department excel. Displays and merchandising lead over 40% of total fresh produce dollar sales today. Having a strong merchandising plan built upon “extra” sales opportunities help retailers to accomplish volume goals and therefore creating future demand and repeat business from customers.

But without IMPACTFUL merchandising it falls flat

Likely the vaguest of the 3 I’s, creating IMPACT in a produce department is not about the biggest display, it is often about the position of the display. Meeting customers as close to the front door as possible, even outside the front door and continue to engage them as they take their journey through the store and into the main part of the produce department. This impact on their decision making of what to buy often leads to not one but multiple additional purchases of fresh produce. If done strategically, the merchandising which is done outside of the produce department will incentivize a customer to select and purchase products which compliment the other along the way. The impact on a consumer will be that they build an awareness of the “something extra” which a retailer is presenting, and they look forward to the next visit to experience what else. It really works.

INCREMENTAL brings it all home

To close the loop on the 3 I’s, INCREMENTAL is the glue that holds all three together. Consumers mostly shop for staples (the basics) bananas, lettuce / salad, potatoes, onions, tomatoes, and berries. But the incremental purchase is what pays the bills for retailers. The categories which are all considered staples are also those categories which often are the lower gross margin categories because of the competitive nature of said categories. To find the diamonds so to speak…those products which are incremental but also drive volume are the ones which retailers strive hard to find and promote…maybe it is an in and out non advertised promotion or a short-lived advertised promotion with limited supply. The idea of creating demand or FOMO with customers is a time-tested strategy and has worked extraordinarily well for many years. However, such a strategy takes time, planning and flawless execution and is well worth the work and effort. The greatest part of a well thought out strategy around incremental sales is that customers will continue to reward the effort repeatedly, provided they can trust the product and the at home experience is everything they expect it to be.

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In conclusion, the 3 I’s of Merchandising is not anything any retail operator cannot execute and accomplish, whether a single store operator of a national chain. It is a matter of understanding the opportunity to sell more products to their customers, what drives their purchase habits and how to maximize those sales opportunities in a way which creates long standing repeat sales and demand for fresh produce.

I practiced this strategy and taught it to my team for many years, although technology, data and consumers have all changed immensely - customers still buy with their eyes and noses. Appeal to those two senses and the 3 I's never let you down.

Happy Selling to all