Success in bakery requires understanding what consumers want, but also where they prefer to buy it.
The where factor is highly complex. Retailers and manufacturers can improve their chances of success by understanding consumers’ channel choices.
That is a key takeaway from The Power of Bakery, the report produced last year by American Bakers Association in partnership with Food Marketing Institute. It includes a section called “Bakery Channel Choices.”
Here are five keys to succeeding with consumer channel choices.
1-Identify Bakery Missions
Shoppers make decisions on shopping venues based on their bakery shopping missions, the report found. These missions determine if shoppers will rely on the grocery versus bakery channel.
In purchasing functional bakery items, Some 74% of shoppers typically rely on their primary grocery store. Functional items include bread, buns and rolls. The picture is quite different for indulgent items and desserts. For this shopping mission, only 63% purchase at their primary store, and 23% rely on a bakery/cupcake store or cakery.
Meanwhile, for special occasion bakery items, only 40% of consumers make purchases at their primary grocery store, compared to 36% relying on a bakery/cupcake store or cakery, and 14% baking on their own.
2-Explore Channel Switching
There are multiple reasons for consumer channel switching in purchasing bakery items. One of the most important is the level of competition in a market.
“Ample access to competitive choices drives channel switching,” the report explains. “Urban shoppers are the most and rural shoppers the least likely to buy bakery items beyond their primary store.”
In general, supermarkets are least likely to lose shoppers to other food channels.
Nevertheless, any outlet can be vulnerable if it doesn’t prioritize factors most important to shoppers, including price and quality.
3-Target Primary and Secondary Shoppers
Retailers need to be aware of the different purchase patterns of primary and secondary shoppers. Primary shoppers tend to focus on big stock-up trips, at a minimum, and secondary shoppers take care of fill-in or supplemental trips.
Secondary shoppers tend to under index for supermarkets, but over index for organic/specialty stores and club stores, the research found.
The best approach is to focus on both primary and secondary bakery shoppers.
“Being a bakery destination that is top of mind among primary and secondary shoppers goes a long way towards optimizing conversion and attracting shoppers from other retail channels,” the report said.
4-Build Awareness With In-Home Bakers
In-home baking shoppers represent an opportunity for retailers. More than 10% of shoppers make their own indulgent or special occasion items, and 5% make their own bread.
By focusing on convenience, the in-store bakery and the aisle have an opportunity to provide time-saving solutions to complement scratch and box-baking, the report said.
“Examples are pre-made dough, par-baked items, icing or other cookie/cake decoration items.”
5- Address Generational Patterns
Generational behaviors play a big role in channel choices. A case in point is younger consumers.
Millennials are less likely than older shoppers to identify a supermarket as their primary channel for groceries, the research found. They over-index for organic/specialty stores and supercenters.
Many of these shoppers are drawn to channels including dollar, drug, convenience and online for bread and baked goods.
Understanding the unique attractions of each channel may help a retailer to become more of a bakery destination for younger shoppers, the report said.
The channel research in The Power of Bakery points to important strategies for winning bakery consumers.
“Being a well-known bakery destination with a strong reputation and image is crucial,” the report concluded.