« November 2010 Table of Contents
Point of View: Case variety is a custom fit
By Chuck Anderson
November 01, 2010
A recent Nielsen report noted that more than 50 percent of U.S. consumers are likely to shop elsewhere if they notice reduced product selection. But carrying too much variety can lead to shrink, compromise quality and drive away customers even faster.
Many traditional supermarkets and independent seafood retailers are paring back varieties and focusing on core products that sell. Category management leader Walmart adopted this strategy a few years back. Walmart figured out long ago that 80 percent of seafood sales
come from 20 percent of the items, so that's where their focus should remain. That strategy can help the department become more profitable, but it severely limits sales potential and it is a death strategy for a full-service seafood department.
Here are a few common-sense strategies regarding variety in your seafood case:
First, maximize sales of the best-selling items. These typically include salmon, shrimp and tilapia in most markets. Shrink is low on these best-sellers. Make more aggressive displays of top seafood items until you just start to get a little more shrink. Then you know how much you can display and sell of the top items. Maximizing sales on best-sellers makes carrying secondary varieties easier.
Next, carry more varieties of your best-selling species. Meat departments handle three species for the most part - chickens, cows and pigs. But look at how much variety they have! Maybe handling more varieties of shrimp, salmon and tilapia makes more sense than adding another fresh whitefish fillet. The fourth-best salmon SKU usually outsells the No. 1 SKU of most other species.
Make one item into two or more items. For instance, salmon can be sold whole, cut into fillets, portions, skinless portions, steaks and even salmon heads for soup.
Sword or tuna loins can be displayed whole, cut into steaks and tail pieces can be cut into kebob chunks.
Haddock fillets can be sold skin on or skin off. Cut the thick part off for a "premium cut fillet" at a premium price. Value-minded customers will buy the tail fillets at a lower price point.
Cooked, peel-and-eat shrimp can be sold as is, with spices, lemon-pepper or Cajun seasoning or many other flavors.
Value-added products can be made from one base product such as salmon that is stuffed, marinated, rolled or made into kebobs. Restaurants are great at this, and
no one sells more seafood than restaurants.
Some suggestions can be labor intensive, but if produced during down time, it shouldn't slow productivity.
Augment fresh displays with small amounts of frozen items. Sprinkle in one or two good quality thawed IQF products to have more variety for lower cost. Thawing a few pounds of frozen fillets or steaks is less expensive than bringing in additional 5-pound or 10-pound units of fresh product. This is most effective early in the week when it is harder to fill the fresh case due to slower sales.
Carry a couple of exotic or unusual items. Unusual items convey the "this market carries everything" image without actually having to carry everything. Items like escargot, sepia, octopus and crawfish can be inexpensive ways to convey a strong variety image. Change the items up each week. If they catch on, you can sell them frozen without any shrink.
Bring in one different fresh item each weekend. Some of these items may turn into regular items, but most should not. Examples include monkfish, hybrid striped bass, Pacific rockfish, petrale sole, bluefish, smelts, soft-shell crabs, whole mackerel and razor clams. The items vary by region.
Focus on providing variety by category. Many retailers get stuck carrying too many varieties of the same type of products and ignore other categories completely. A department that has 12 fillet and steak varieties but no shellfish has a lot of variety, but a customer who wants to make pasta with clam sauce is out of luck. Having "X" number of varieties doesn't make sense without looking at variety by category.
Consider call-back sheets, which require some work. The seafood manager can keep track of any items customers ask about, take down their name and phone number, and build a list. Once there are five or six names on your fresh red snapper list, order a 10-pound case for the weekend. Call back every customer on the list. You will probably sell a few pounds of snapper to customers on the list and even those who don't buy will be impressed with the service!
Separating your seafood case from the competition is done with quality, variety and service. Hopefully, these ideas can add the variety while improving profitability.Retail veteran Chuck Anderson is the director of retail and new business for Sousa Seafood in Boston.