International Data Corporation recently surveyed 4,000 consumers in North America and Europe about their expectations for the grocery shopping experience, and the results bring to mind a number of questions that retailers should be considering as they make their spending plans for the next 5-10 years.
Online grocery is more popular in Europe than in the U.S., but the share of e-commerce in U.S. grocery has been climbing and is projected to continue on that trajectory.
The consumer expectations captured in the IDC survey — while they might not reflect where the average U.S. consumer stands today — may very well point to what is coming in the next decade.
Do you know how shoppers want you to talk to them and what they want to hear?
Various reports indicate that many consumers still value the traditional circular, but among younger shoppers numerous digital tools are gaining in prominence.
With people of all ages becoming increasingly inseparable from their smartphones, it only makes sense for retailers to use that connection to their maximum advantage.
IDC found that, among the consumers it surveyed, 63% of shoppers say personalized promotions and offers are important.
Every retailer needs to figure out what kind of communications with its shoppers are welcome. Included on the list from IDC were:
- loyalty rewarded with product suggestions (57%)
- contact on the right device or channel (49%)
- product suggestions matching tastes and preference (48%)
As far as how shoppers want to receive personalized communications, 66% said loaded to their loyalty card, 55% said mailed to their home, 54% said printed at the register when checking out, and 45% said via their own mobile app — and that last method was cited by 58% of millennials and 69% of Gen Z consumers.
Your shoppers may not want all those same things, depending on age and demographics and income level and area of the country — but you can be sure they have their preferences, and you need to figure them out and deliver on them while still positioning yourself for the future as well.
Do you have the tools you need to maximize the shopper data you obtain?
Eighty percent of retailers surveyed said among key capabilities for the coming years will be a platform for customer data and personalization analytics. Seventy-nine percent said the same about a smartphone shopping app “for in-place and in-the-moment relevance.”
Perhaps one of the biggest challenges for retailers will be gathering all the different streams of data they have — from physical and digital coupons used, to sales of items featured in paper and digital circulars, to purchases recorded on loyalty cards, and much more — and synthesizing those sources to create a complete picture of how shoppers are responding to all the different communications they are receiving.
How are your kids — or other people you know who are early 20s and younger — shopping for groceries, for food overall and for general merchandise?
If you’re hesitant about pouring resources into the giant undertaking of moving your chain’s digital presence to the next level, I’d encourage you to consider how the young people you know are using their phones.
Many are big fans of buying things online, particularly through Amazon’s one-click-to-order model.
More importantly is that even though many purchases are still made in-store, those purchases are very much influenced by online ads, social media and exploring the digital presence of a brand.
So if the search function on your website doesn’t produce accurate results ...
... or if it’s a big pain to get an account set up to make an online order ...
... or if there’s no way to access your past orders so you can easily find your favorite items again ...
... those are problems.
On the flip side, having a low-friction should translate to fewer abandoned virtual baskets — especially important since online grocery baskets tend to be larger than in-store ones.
Right now there are still a fair number of consumers who still believe phones are best used for calling people, but the growing majority is becoming dependent on their personal devices for so many other uses, and shopping research is one of them.
What’s been happening to your sales in center-store categories and how can you adjust your stores accordingly?
This shouldn’t come as news — items like paper products, cleaning supplies, health and beauty items and other dry goods are increasing being bought online.
IDC writes that, in response to that dynamic continuing to strengthen, grocers will need to reallocate space in their stores, expanding some departments and shrinking others.
Can you envision a store that’s all “perimeter” — maybe with some foodservice elements to serve as another draw for foot traffic?
Perhaps that will never be, but I wouldn’t rule out the possibility. I know I personally split my shopping between where I want my fresh products from and where I buy dry goods.
Maybe no drastic changes will be warranted in the next five years, but at some point, I’d be surprised if we continue to see companies building huge one-stop-shop locations, at least in the traditional sense where paper products and other such items are available in the portion of the store that’s open to shoppers.