Innovation and high quality vital for online produce sales, says retail panel -

Innovation and high quality vital for online produce sales, says retail panel

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Innovation and high quality vital for online produce sales, says retail panel

As more retailers turn their focus to online produce sales, suppliers will need to adapt to the new landscape to succeed. At the recent Produce Marketing Association (PMA) Fruittrade Latin America, retail representatives from across the world discussed what producers and exporters needed to do differently in these changing times of e-commerce.

During the session 'Fresh Produce Renaissance: Packaging and Merchandising Strategies to Increase Sales' led by marketing expert Lisa Cork, retail executives from the Netherlands, the U.S. and Brazil all agreed that what made a successful in-store product did not necessarily translate onto the internet.

(Left to right) Lisa Cork, Ge Happe, Paul Kneeland, Francisco Homsi

(Left to right) Lisa Cork, Ge Happe, Paul Kneeland, Francisco Homsi

"The big challenge for us is that our in-store experience is so strong that it's a challenge for us all to say 'lets go online', because we're so fresh-focused that when people come in they get inspired. For me it's hard to get inspired on an app or online," said Paul Kneeland of U.S.-based Fresh Formats, an Ahold division.

It's a change that has been a struggle, but the entity is looking to take advantage of the growing online trend all the same while taking note of how to engage with young consumers and fit in with their routines.

"For our brand focused mostly on millennials, you may have guessed that we are developing an app with which you can order anything in store," Kneeland said.

"Millennials are Uber-ing [using the international transport company], so we're looking at potentially having Uber do the deliveries. Co-branding makes sense for our strategy.

"We also have a culture-ninja in both of our stores and she goes around and takes photos and Instagrams saying 'this is new in our store'. So to create excitement online is definitely a huge part of what we are doing."

While the U.S. group is just starting out in online produce sales, its parent company across the Atlantic has far more experience and has recently been enjoying strong growth.

"We have had online sales for a long time, but in the last five years the growth has been tremendous," Netherlands-based Ahold European sourcing director Ge Happe said.

"Online fruit and vegetables sales are growing at the same rate that they grow in stores, which surprised us as we are a small country and have 950 stores, so there is a store almost round every corner."

While an increasing number of the U.S. and Dutch retailers' consumers are buying their groceries online, the same cannot be said for Brazil's Oba Hortifruti.

"We had an experience in the past but it was disappointing trying to sell fresh produce online," the retailer's commercial director Francisco Homsi said.

However, he explained direct sales were not the internet's only benefit.

"We decided to step back and have a different approach. First we are very present in social networks, informing and calling people back to the store," he said.

"It's a fantastic way to interact with our customers because we receive feedback 24 hours a day. This is a huge operation, because we are answering people all the time."

What can suppliers do?

While it is the same product that is sold in-store and online, all three panelists agreed fruit and vegetables sold over the internet needed special focus in certain areas to attract consumers and build their all-important trust.

Happe emphasized that while Ahold's online shoppers were buying roughly the same amount of fresh produce as they would do in-store, their demands were higher.

"They are extremely keen on quality and availability. So the quality must be fantastic, because you're not in store where you can take an alternative," he said.

The representative also said innovative products tended to fare especially well on the internet, where people were often looking for something new.

Kneeland urged suppliers to think 'totally differently' when selling their produce online, encouraging them to think beyond being a producer.

"How can you enhance that online business? Can you ship items from your packing house or fields directly to the consumers? Could you have a coordinated effort with your retailers to get fresh produce off the trees and right to the consumers? Is that possible?" he said.

"That would be fresh. That would be something special, so I would start as a supplier thinking of ways to do that."

Homsi agreed with his fellow panelists, stressing that both quality and packaging were key given the high levels of consumer expectation.

"Honestly, when people come to our store, if they chose something they are responsible for their choice. If it's wrong it's on them," he said.

"But if we are chosing for them then we might be wrong, so we must be careful. I think it's a much bigger responsibility."

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