Does your Dairy Department work for you?

Dairy accounts for 19 percent of an average supermarket’s profit while taking up just 3 percent of store space, according to the Willard Bishop Store Super Study. Dairy generates more than 2.6 times return on space than produce and 6.2 times higher return on space than grocery in general. It’s no surprise that many retailers are looking for ways to reinvent their dairy departments.

Dairy Management (DMI), which supports the Innovation Center for U.S. Dairy, recently released a guide to help retailers reinvent their dairy departments. The Dairy Department Reinvention Activation Guide is the result of more than three years of research by DMI, Kraft Foods and Dannon. Since 2006, the coalition analyzed 343,000 shopping trips, audited 22,000 retail grocery stores and spoke with 2,500 consumers. With milk penetrating 96 percent of U.S. households and acting as a trip trigger that often leads consumers to the store, putting a focus on dairy can be a great way to increase profitability.

Understanding your shopper’s needs drives store loyalty, which increases shopper perceptions and can lead to increased sales. The best practices outlined in the Dairy Department Reinvention Activation Guide address the feedback from consumers. Comments include that the dairy department was traditionally not an emotional engagement, that they often had difficulty finding items, that they often felt rushed and usually bought the same things week after week. Shoppers’ wishes include making the dairy department easier to shop, personalizing the engagement, leveraging more meaningful merchandising and fostering interaction.