Thursday, March 28, 2024

High-end shoppers seek quality

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Top-end Chinese supermarkets battling for consumers’ hearts and minds often use their virtual stores to better understand their customers’ shopping habits, both on and off line.  Until now premium shopping experiences have been largely limited to online stores but more online outlets like JD.com and Alibaba are offering a bricks and mortar shopping option.
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For Shanghai and Beijing based chain City Shop the evolution has been the other way around with the 20-year old firm’s shops in prime city spots adding an online offering since its acquisition by Fruitday, an online fruit specialist, in 2017.

In the produce section Zespri kiwifruit has locked in 12-month shelf space for a fruit that claims top spot for both volume and value.

The SunGold variety accounts for 80% of sales, selling for about NZ$3.50 a piece in pack of six, 12 and 25. It is building a strong following among the supermarket’s well-heeled, upper-income shoppers.

Fruitday assistant president Huang Jing said a key focus of the chain is to boost shoppers’ consumption of fresh fruit and Zespri’s focus on offering a nutritional, convenient snacking fruit fits well with that goal. 

Having 12 months of supply has done much to stabilise and build demand as shoppers learn to expect to find the fruit on the shelf regardless of the time of year. 

That has been in part thanks to Zespri sourcing fruit from Italy at the tail end of the NZ supply season, filling the gap over January-March until the NZ fruit crosses the wharves.

“The other key reason for purchasing Zespri kiwifruit is to take it as a gift when celebrating holidays and festivals with friends. 

“Offering a good-quality, branded fruit like Zespri’s is appreciated by your hosts,” she said.

Fruitday’s main business is an online store with 15 million shoppers downloading its app and 1.5 million identified as regular, high-value weekly shoppers on it. 

Huang said City Shop’s fruit sales are split evenly between on and off line purchases and the online data is a valuable source for helping it better understand its shoppers’ preferences and behaviour.

“With what we are learning from this data we have been able to narrow down our stock keeping units from about 20 to six in the fruit sector.”

“We are also learning from looking at their total purchases whether they may have children and what food preferences are and from that we can tailor our promotions. Some may work well, others may not so we drop that promotion and try something else.”

City Shop now focuses more on the higher-spending customers it already had online rather than trying to grow those numbers further.

The chain’s customers are typically well educated, time-short and happy to pay a premium on prepared, convenient products sourced from high-quality suppliers. 

It has recently started stocking airfreighted Bostock organic apples selling for 12 yuan (NZ$2.59) each, alongside snack-sized Rockit apples in their distinctive Rockit cylinder container. 

Rockit recently joined the Primary Collaboration company, which now represents 13 NZ brands in China.

With almost 500,000 Chinese visiting NZ every year this country has earned a good reputation among City Shop’s high-end customers, many who have been or aspire to visit NZ.

“It means as a country NZ is in a very good position to start from.”

Chinese food production standards have lifted significantly in the past decade. 

Huang said if prices are similar between NZ and Chinese products shoppers will still tend to opt for the NZ product.

“It also depends on the product. For example, something like squash, they will be less concerned. But for something like kiwifruit they will pay the premium for NZ product.” 

City Shop offers only Zespri kiwifruit to its customers.

The chain got some of China’s first shipment of avocados from NZ and the good flavour profile was appreciated by customers. 

However, she noted the price at 29 yuan (NZ$6.20) each was high compared to competing and established Mexican fruit.

Wang said organic products pose something of a hard sell given NZ’s conventionally grown products are already held in high regard for their purity.

“NZ fruit has proven to be very high standard and sets a good example for other countries to learn from. Customer expectations before and after are always met.”

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