Raley’s Educates Shoppers at the Shelf
ROSEMONT, ILL. — Shoppers today are asking more questions about the products they buy, seeking to learn everything from if a food has added sugar or preservatives to what “all natural ingredients” really means. “We’re all scrambling to expand our organic offerings, our non-GMO offerings, our natural offerings,” Raley’s chief executive officer Mike Teel said during a presentation at TransparencyIQ, a Path to Purchase Institute event in October. “Our customers are confused by rapidly changing marketing claims.”
Raley’s, a West Sacramento, California-based supermarket chain, did a survey in 2015 that found 66% of customers wanted nutritional information at-shelf, and knowing more would affect how they shopped. Raley’s worked to meet that need for information in September by launching “Shelf Guide” through a partnership with Label Insight, Chicago. The program had been in development for more than a year and eschews existing labels and standards in favor of fresh research.
Label Insight analyzed data on 22,000 products containing more than 250,000 ingredients to verify their health claims and messaging. It then applied qualifying products with up to eight labels: vegan, no added sugar, organic, nutrient dense, minimally processed, Kosher, non-GMO and gluten free.
Teel said that about 13,000 of the retailer’s 22,000 center-store SKUs received a label, which appear as a bright colored message on price signs. There’s only room for two icons at the shelf, so the retailer prioritizes which to show based on what’s most important to shoppers. For instance, Teel said 59% of customers are seeking minimally processed food, while 41% are trying to avoid GMOs and 30% want low-sugar items.
More detailed information is available online, where shoppers can browse products and filter based on the attributes they want. They can also curate unique shopping lists by cross-referencing labels. “We believe that the digital experience is going to be a real game changer,” Teel said.
The retailer introduced shoppers to Shelf Guide through shelf blades, circular features, an email sent to users of the eCart e-commerce program and social media updates. Raley’s plans to use data from dunnhumby and its own loyalty program to learn which icons are being shopped the most frequently. The retailer has also partnered with a registered dietician to get research and insights on nutrition trends and plans to evolve the program to incorporate new products and generally keep it relevant.
While the system is currently limited to packaged foods, Raley’s wants to move it across the store.
Raley’s already persuaded the manufacturer of its private labels to align products with the retailer’s new standards, and Teel said he hopes that major CPGs will do the same as labeling becomes more prominent. The change aligns with the retailer’s values, which also drove them to follow CVS/pharmacy’s lead and stop selling cigarettes. They continued that trend by removing sugar sodas and candy from the checkout area.
“We felt that was part of our mission, to help customers make better choices,” Teel said. “It was at great risk to our organization but we were driven by that purpose first.”