If you find yourself asking Roger Pepperl to talk to you about apple merchandising, grab yourself a cup of coffee, a comfy chair, and prepare to be wowed. When we decided to broach the topic, I was expecting a few bullet points of common misconceptions and a couple quick pointers, but what I got was my new apple merchandising tome.
The Marketing Director of Stemilt Growers, as well as a former produce buyer and merchandiser for the Midwest supermarket banner Meijer, has approached the concept from every angle imaginable. Whether from the supply-side, buy-side, or as a consumer, this mainstay of the apple industry is not shy about giving his opinions about best practices for merchandising. So join me here as we dive down the rabbit hole.
Jessica Donnel: To start, can you share some of your best practices as far as merchandising from a retail standpoint?
Roger Pepperl: First and foremost, let’s get right down to the bare bones of it: color breaks, which, with the number of bi-colored apples today, are not easy to execute. You hear the excuse: “They all look alike, and there’s nothing I can do about it.” Well, there’s a couple things you can do. For example, I was just in a store the other day, and they had all the Golds and the Grannys at the end of the display. I thought, ‘Wow, you only have a couple color breaks, and you wasted both of them.’ And the bi-colors; we say they all look alike, but believe it or not—they don’t all look alike. There are some that look more alike than others, so, break those up. You can break up apples by color, by shade, by shape, but make it easy for the consumer to tell that it’s a different varietal section.
Number two is that your retail display should be reflective of your sales, so your largest selling item should not have the same width display as your slowest selling item. You’ve got to remember that display size will also dictate sales. A small, skinny, and unobvious display will end up reflecting those types of sales. If it’s an apple you want to develop and you give it the worst spot in the store, you’re ignoring a major opportunity. In general, you have to make sure your category and scan data are reflective of the space you give an apple. That way, when you sell five cases of something a week and you sell two cases of another thing a week, it allows those displays to turn over and constantly gives you fresh product on display.
Those are things that seem really simple, but we stumble over. I call it the blocking and tackling of selling product.
JD: How important is signage in merchandising apples? How can signage increase sales at retail?
RP: Signage is super important, and using it incorrectly is a pet peeve of mine. I was a retailer for many years of my life, but today we have marketing departments in grocery stores deciding what the sign policies are going to be and how the signs are going to look. How often have we seen a sign above a new apple variety that just has the name of the apple, the price, and nothing more? The barrier to buying that apple for a consumer is huge, because you’re asking a person to buy an apple they’ve never heard of before, with no description, only a price, and no expectations of what it will taste like. In many cases, the staff is not trained to tell them the apple’s story.
Your sign becomes the entry to that product. People always call that your silent salesperson, and going into these stores, you can see those salespeople are not very good at their jobs. If you’re a structured large chain, you may have the encumbrances on signage that I just talked about. But, if you’re a smaller niche or local retailer, you could have a leg up on some people because you can do whatever the heck you want, and you should get out there and do it. People want to know, not only what their food is, but also who grows their food—they want something they can grasp about the product they’re going to potentially purchase.
JD: What is the importance of working and training with Produce Managers in store?
RP: We talked about the silent salesperson, but the other salespeople to look at are the actual people that work in the stores. If you’re a produce team leader or a produce manager, do you know what those products are? Do you know what those apples are in your store? In many cases they do, but not always. I think there’s a lack of information or bad information out there on varieties. Inform your team leaders and they can teach their staff. If you’re saying, “How do we do that?” at Stemilt, we offer information, either print, digital, or verbal training in stores and in produce manager meetings. If you’re not an expert, talk to an expert. Make sure that you’re an expert on the products that you sell. Your customers will appreciate it.
I often think about myself as a consumer. If you go to buy something such as an automobile or another big purchase, and you ask the salesperson about the engine of the car the consumer is considering and the salesperson responds, “Oh I don’t know, I’m not familiar with it,” then you’re not going to buy it from that person. We act like, because it’s an apple or a produce item of much lesser value, that people are going to react any differently. We need to be informed and have confidence in our responses. We have to be considerate of consumer questions.
JD: What is two-tier or multiple-tier pricing?
RP: Two-tier pricing, or multiple-tier pricing, is a super simple concept. The basic premise behind it is that you want to lower the level of confusion. For example, you might have Fuji, Gala, Granny, and Braeburns, but you’re purchasing all those apples at relatively the same price FOB. It may be a couple dollars difference here and there, but often they blend out in a way where you can offer a price point of $1.59 a pound. But then we have a Pink Lady® apple or other trademarked varieties like the Piñata® or SweeTango® that might be getting bigger dollars in the range of $2.49 to $2.99 a pound. If I’m at the store, I see $1.59, and I see $2.99, so I have two decisions. Will I go high, or will I go low? And once I go high, I have multiple choices in that high category, and once I go low, I have multiple choices there. It lowers my barrier.
If everything were just a dime apart, the tendency would be for people to just go with whatever the cheapest item is and then you have people buying out of confusion. Or they may get overloaded and not make a decision at all. It’s like if you were to go buy soup and every can was 15 cents different in price—you would get bleary-eyed. People really are on budgets and do look at price, so tiered pricing can lower the barrier of entry for different varieties. However, the produce director or the category manager who is setting pricing has to cost average, because nothing is exactly the same price.
JD: What are better practices for digital merchandising? How can produce companies digitally merchandise effectively for consumers?
RP: I think digital is essentially going to be a refinement of what people see in the store. I think on digital you’re going to see people concentrate on less things, with price and placement being really important. Where on the screen it appears and the pricing is all you have, since you don’t get the quality perception that you have in the store. You have to wow them by helping them understand what they’re buying with good descriptors. Produce brands also can help in decision making and build repurchase loyalty. Produce brands are growing quickly and digital shopping will speed this growth. Consumers will want to make faster decisions online. We all know Amazon built its platform on speed because they want the click-through on the purchase of an item to be fast so they can keep accumulating items online. I think a good digital retailer is going to want to do that, and two-tiered pricing, to me, is going to make decision-making a lot quicker. I think two-tiered pricing encourages experimentation, where people will try different items. If you don’t encourage people to try everything you have, essentially, they will find them somewhere else.
JD: How is Stemilt helping to capitalize on the consumer trend of storytelling and helping to tell its story at retail?
RP: We provide toolkits to all our retailers any time we have a new variety. These include a logo for the item if it is a trademarked variety, digital pictures of the orchard where the product was grown, photos of the item’s usage, and where they can use them on any digital shopping avenue they may have. There’s also a descriptor which tells a brief story about the product, has any parentage that might go with the product itself, and a taste profile. Further, we always include a little story about Stemilt’s family-owned history. The really nice thing about our toolkits, though, is that they can be used digitally or used for print. It’s just a really quick and easy way to get things done and help produce teams in-store.
Color breaks, signage, multi-tiered pricing—sounds pretty simple when put in the words of Roger Pepperl. You might just catch me critiquing apple displays with this issue in hand in a grocery store near you.