Winning the grocerant war
The pizza business is competitive, but how well do you know your competition? Canadian city streets are thick with pizzerias offering various combinations of quality pizza and good prices. When you search for a nearby pizzeria on your smartphone, the list is long and top-heavy with the big chains.
But do you consider the local grocery store your rival? If not, you should. Grocery stores are locked in a battle for your customers. They are smart, powerful and not to be underestimated.
Here’s the thing: grocery stores want to be you. In-store bakeries and pizza counters are competing for restaurants’ customers by providing eat-in experiences – often strategically near the front door – aimed at not just keeping customers in store longer but also drawing in hungry newcomers (your potential customers). There is a word for this new hybrid: the grocerant.
Canadian customers are in the habit of buying prepared and made-to-order foods from the grocery store, says new research from Mintel. Eighty-five per cent of Canadians have purchased prepared or made-to-order foods from a retailer that sells groceries from June through August. Younger Canadians aged 18-34 are most likely to do so, the report said.
About one-third of customers buying prepared meals find themselves suddenly hungry and tempted to stop at the grocery store. You need to focus on that one-third.
With more buying power, grocery stores can provide a whirlwind of products to choose from and one eye-opening discovery of Mintel’s research is that more than 30 per cent of those who buy these grocerant products find them at least as good as those from restaurants. You heard that right!
You can’t do too much about the pricing. But to pizzerias that use high-quality ingredients, creative topping combinations and know-how that sets their crusts apart, as Bugs Bunny’s rival Yosemite Sam would say, “Them’s fightin’ words!”
Fortunately you as a pizzeria have a couple of six-shooters in your holster.
You have a principle called the Paradox of Choice in your favour. According to a report out of the University of Guelph entitled Food Focus 2018, people generally like the idea of choice. However, if customers are given too much choice they may be overwhelmed. In an influential book called The Paradox of Choice psychologist Barry Schwartz argues that eliminating consumer choices can greatly reduce anxiety for shoppers.
Here’s where restaurants have an advantage, the Guelph researchers suggest. Because you as a restaurant have customers’ attention, you can direct them to choices by providing more information.
Also in your holster: the freedom to buy in small quantities, long experience in delivery, and the potential to provide take-and-bake pizza and sell proprietary products such as sauces from your restaurant to help people re-create the experience of your restaurant in their homes.
The key to winning on this battleground is selling yourself as the pizza expert. Now that you know what this key competitor is up to, and what those key customers want, put on your marketing hats and steer some pizza-loving millennials over to your camp.