David del Pino

Positioning Maps are fundamental tools for companies to make decisions, and are built on the basis of market research that interviews consumers and describes their perceptions about products and/or brands in a market and in relation to the main factors that generate the purchase decision.

Unfortunately, and as in other sociological surveys, there are numerous uncertainties regarding their validity and they are being constantly revised. The sources of these “errors” are many and well-known: the cognitive biases of the interviewees, the size and quality of the sample, changing tastes and so on.

It’s easy to understand bias on price. Many consumers don´t like to say during the interviews that they they prefer to buy cheaper products (whatever they are) which is why we often find headlines in the specialist press such as: “price is only the fourth factor in the consumer’s fruit and vegetable purchase decision”.

Meanwhile, the perception of store managers is completely different and they have reasons for it. For them the reality is the sales figures (the real ones) of the stores in their chain. They are absolutely sure of what sells (and therefore what consumers like) and won´t be swayed by a study, a positioning map or any other marketing embellishment.

But what if we’re all wrong?

What if the studies only paint a picture of desires that are far from reality but ideal?

And what if these ideal sales are no more than the “least worst possible” choice within the range available in the stores?

Never before has such an array of points of sale and such a quantity and diversity of fruit and vegetables have been on offer in these outlets. And yet consumer complaints still exist. They complain about the freshness, the taste, and even the price, to such an extent that consumption per capita continues to fall. 

Consumers don´t seem to be completely satisfied with any of the existing offerings and become “disloyal” and navigate several stores (including traditional stores) to complete their purchase.

In 2004, the executive Chris Anderson wrote an article (and later a book) called “The Long Tail” in which, on the subject of the audiovisual industry (cinema, music etc.) and even on book sales  he said things like:

“We’ve suffered the tyranny of the lowest common denominator for a long time…Why? Because of economies (of scale and distribution).”

“Many of our assumptions on popular tastes are nothing but empty shells, based on poor supply for demand. A reaction from the market (the consumers) to inefficient distribution.”

In the article, Anderson demonstrated that, by overcoming the distribution restrictions of a traditional sale (in-store) though on-line sales, on-line sales companies were able to sell completely unexpected quantities of items that they had never been able to sell before in physical stores.

In some cases, like in that of AMAZON, these sales account for 57% of total sales. That means, at least for AMAZON, 57% of sales were of products that it was believed wouldn’t be popular through traditional distribution, and because of this it wasn´t worth selling them. But in fact it was.

These items weren´t popular and this enormous sales figure was achieved with modest sales (a few units) of a very high number and diverse range of “unpopular items”. In summary, a “Long Tail” (Larguísima Cola) of products sold.

This shows that consumers’ personal taste is very diverse and many sectors have entered a spiral of personalisation (customisation) that the advent of 3D printing threatens to end.

In our case (horticulture), we should also consider that a horticultural “Long Tail” is possible. It’s clear that the progressive adaptation of businesses to the on-line world (with the overtaking of physical restrictions and in-store sales to the public) allows a great diversification of products to satisfy the real tastes of consumers.

If consumers’ needs are met, more will be sold, consumption will rise, and a rise in (and convenience of) market segmentation will make production more profitable.

But what if this is already happening? What if this Paradigm shift is already taking place?

It’s not just that traditional supermarket chains are focussing more and more on on-line tools, or even that AMAZON has decided to start selling fresh products (causing alarm bells throughout the industry). No, it’s not just this.

It’s clear that there’s a race to conquer the last available channel (on-line) in order to reach consumers and it will be a struggle to control it with different strategies – monochannel, multichannel and omnichannel.   

While all this is important, what´s more important (in my opinion) is related to the implications of “Long Tail”.

The paradigm shift (the change in model) in the sale of fruit and vegetables is coming, and I don’t think we’re aware of it. In fact, it has already started happening in an informal and emerging manner,  although it hasn´t been acknowledged. Take the following account as an example…

Recently, the head of a Scandinavian chain told me about operational and supply policy changes to adapt to the on-line world.

The Scandinavian chain in question is multiformat. It has Hyper and Super stores and Corner and Convenience Stores. With all these store formats, the fresh fruit and vegetable buying team manages more than 700 products.

The Hyper format of the chain typically has some 370 products in its fruit and vegetable range.  With this, the larger store format doesn´t have sufficient space nor does it need to have on display the 700 products to maximise margins and revenues (or so they thought).

The implementation, in these Hypermarkets, of the on-line Click & Collect sales strategy (order on the web and collect in-store) has opened their eyes to a  new reality.

Click & Collect users are ordering a large part of their orders from products that aren´t included in the 370 products that can be found in the Hyper range.

The fact that the on-line tool was developed for all store formats has made it possible for consumers to have the entire range at their disposal (+ 700 products) and therefore, their choice is not restricted by the physical limitations of a store.

Consumers no longer have to settle for “the least worst of the possible options” that the store has, now they can choose what they want or what best suits their needs.

The range has doubled with a simple on-line tool. The logistics, picking, cross-docking and all the other operations and resources are exactly the same.

And, according to this executive, with a few more changes and a modest increase in resources, the chain can increase the range of fresh fruit and vegetables by more than 4 times (3,000 products).

Some of the implications of this are incredible…

Even without further expanding the range, the chain can use the on-line sales data to optimise local ranges in each of its stores which increases income potential and margins and reduces losses for products with poor turnover.

Poor turnover products can still be sold to “all consumers”, without being limited to a market sector, which reduces the potential for unit sales, as the in-store exposure step is avoided (as are the costs associated with this step).

Speciality, niche, and newly launched products don´t need such a high volume launch and maintenance threshold to incorporate them into the range.

The chain can be both “generalist” and “gourmet specialist” at the same time.

And dare we speculate about the following…?

If the tool is available to suppliers (as with AMAZON’s consumer electronics) a supplier may offer its products directly to the consumer through the system (provided that the orders are delivered to the distribution centre at the time advertised), and so consumers can freely choose between the suppliers/brands of the same product.

This could increase brand profile and be a way for traditional or on-line distributors (as, for example, AMAZON) to build a differentiation strategy between the brand and the competition.

We will have to get used to modernising and using words such as Dropshipping, Click&Collect, Design UX, Digital-Physical Blur, Circular Economy … and others that emerge.

David Del Pino

International Consultant

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