I was at Costco twice over the weekend.  

On Saturday, I went there for paper goods, sunscreen, produce and meat.  But, when you are at Costco, you have to check out the "treasures" too!  

As you may know, "Treasures" is the Costco term for those items that when you see, you buy, because you don’t know how long they will be available.  

I bought a couple of treasures—but it can be hard to know whether a treasure is really a treasure!  I went home, tried out the "treasure" and found it was a definite treasure!  Once I knew that, I also knew I had to get back to Costco quickly, hence, the trip back on Sunday!  

How many times do you find "treasures" in a regular supermarket, pharmacy or department store—such that you will return the next day to buy more?  Not very often..., but aren't there some opportunities for "treasures" at those stores as well?  

Oh, and by the way, when I went back to Costco on Sunday, I bought more than just the "treasures"—I bought detergent, make-up, frozen foods, baked goods and printer cartridges. 

That "treasure" option worked out well for Costco and for me!

A recent study by NPD Group reported in Progressive Grocer showed that, while the number of consumers purchasing private label products in the US continues to increase, consumers’ enthusiasm for private label products is decreasing.  

The study, entitled, “The Evolution of Private Label—Does Brand Name Really Matter?” states that “the percent of private label servings rose from 18% in 2000 to 27% in 2011, but that the customer satisfaction of private food and beverage products decreased from 32% to 24% between 2009 and 2012”.  

What does that mean? 

With the tough economy, out of necessity, many consumers made the switch to private label products.  As we know from any normal curve, some of these private label products were obviously outstanding, some were good, some were good enough, some were not good enough and some were poor.  

In cases where the products were outstanding or good, "private label" will win and gain market share.  But in cases where the products were only good enough or not good enough, it is likely that when those shoppers have the opportunity (i.e., more money in their pockets, or see serious discounting from the national brands), they are likely going to switch back to the products they know and that have served them well. So, over time, those shoppers are likely to be lost to private label suppliers as well.  

The ongoing battle between private label and national brands has a long way to go…    

I stopped at the one of the leading supermarkets over the weekend but only went there because they have a great deli with the best marinated and cooked steak tips.  They are the best!  

While I was there, I picked up a few other things…organic milk, some ice cream for dessert, English muffins and other bread, some produce and cereal.  As I was placing the items into the cart, I thought to myself, “these prices seem really high—I don’t think I pay this much at either of the other stores where I frequently shop.”  But I continued.  

When I got to the check out, I had spent almost $100, didn’t have my cloth shopping bags because I only thought I was going in for 1 or 2 items...  

Just like most shoppers, I bought things that were not on my list.  According to a recent article in Drug Store News, new research from the Integer Group and M/A/R/C Research indicates 9-out-of-10 shoppers still buy items not on their list.  Based on the research, among those who strayed from their shopping lists, 66% of them said were motivated by a sale or promotion, 30% said they found a coupon and 23% wanted to pamper themselves.  

For me, maybe those things were true, but it was basically a matter of being in the store, seeing a product, thinking we might need it and saving myself another trip to the store.   

So, they got me for their higher prices…but next time, I might not be so easily persuaded to purchase more than I planned!

In 2008, Supermarket News reported that, despite a rise in food prices at the time, customer satisfaction with supermarkets was up 1.3% to its highest level in 14 years. This statistic was based on information generated by the American Customer Satisfaction Index.

But fast-forward a few months and the story started to change…

“Early on in the economic downturn (later in 2008), there was a lot of fear and people were opting for the lowest price,” said Shelia Lukaszewski, a Kraft executive, in a 2011 interview. 

“Now, the concept of value is what we hear over and over. More shoppers are saying that it's not worth it to be guided by low price alone if they or their family won't eat it. So there has actually been a big decline in the number of people who say they always choose the cheapest brand." One of the general conclusions drawn from the interview was that retailers were dealing with "more mindful, careful consumers."

This year it seems this trend has continued. This is consistent with information presented in our February 27 post, and is also evidenced by how more nimble regional supermarket chains with an emphasis on customer service dominated the 2012 Consumer Reports list of shoppers' favorite food retailers, as reported in the May issue of the magazine. 

A few of the facts presented:

• The biggest complaint shoppers had overall about their supermarket was that there were not enough open checkouts (cited by 27% of shoppers), followed by congested or cluttered aisles and out-of-stocks on advertised specials.

• One third of the shoppers surveyed said they had stopped shopping at a nearby food retailer. Of those, 43% (or approximately 20% of all shoppers polled) cited lower prices elsewhere; 25% cited poor selection, long lines or poor food quality; 17% cited employee rudeness; and 14% cited crowds.

As supermarket chains look to engage consumers and increase shopping trips, many are offering digital deals which are only visible or available to those who use Facebook and “Like” a company or those with smart phones who sign up for the coupons.  

But what about those consumers who don’t have access or don’t want to be contacted digitally by supermarkets?  Are those customers being left out? Recent articles in Supermarket News point to what is happening in the marketplace…

“A Hy-Vee store in Marion, Iowa, which has its own Twitter and Facebook accounts, used social media to promote ‘mystery sale’ prices that will be available only on its Facebook page. The prices will be posted April 9 at noon CT for the sale later that day from 4 p.m. to 8 p.m. ‘These prices are so astonishing we can't print them!’ a Facebook posting said. ‘However, an added bonus of being our Facebook fans is that we will be posting the great prices for this ad on Facebook.’”

 “Schnucks is offering ‘Schnupons’—rich media mobile coupons delivered exclusively to those who text the work ‘Schnucks’ to 223344.  Shoppers must have MMS capability on their phones to access the offers.”  Schnupons are just one of three digital media options that Schnucks offers.  The others are Wednesday Wows and Drive-Time Specials, both Facebook coupons.

While it is important to embrace new methods to engage customers, having specials that are only “available” to those using digital technology may mean disengaging other customers.

I was in one of the large pharmacy chains over the weekend and was surprised at the level of engagement with one particular employee.  

She was working in the beauty products section of the store… where one finds skin care, perfume and nail products.  As I picked up a few items and placed them in my cart, she said, “I am running a few specials in this department, and if you check out with me (in the beauty department, as opposed to the general lines, I supposed), I have a few coupons for the products you are buying.”  

When it was time to check out, I went to her register.  She scanned my items, which totaled more than $100.00.  She up-sold me on a skin care product and then proceeded to produce $10 in coupon savings for other products in my cart.  One of the coupons was from the weekly flyer, but others were manufacturer’s coupons that she had in a box.  She was friendly, but not overly so, but was working hard to make customers feel special. 

How often does that happen in a big pharmacy chain?  More and more, I suspect…. but how often does it happen in the supermarket?