Retail Operations

How Shopper Behavior Has Changed During COVID-19

How Shopper Behavior Has Changed During COVID-19 1644 1085 Natalie Tatum

In a recent report from Acosta, researchers found that two-thirds of U.S. shoppers said they have changed their grocery shopping habits in response to the COVID-19 outbreak. The report, Grocery Shopping during the COVID-19 Pandemic, dives into how shopper behaviors have changed in recent weeks following stay-at-home warnings and the panic-buying that’s associated with the coronavirus outbreak. To best understand this information, let’s take a look back at grocery shopper behavior in 2019. 

In 2019, one of the biggest trends in grocery was the shift in dietary needs. “One third of households have at least one family member following a non-medically prescribed diet, and this rate is higher for younger generations,” said Leslie G Sarasin, President and CEO of FMI. This shift changed the grocery landscape by influencing grocers to expand their natural and dietary restriction sections in the store and helped introduce new products on the shelves that fit the new needs of their shoppers. The other leading trend in 2019 was online grocery shopping, with  roughly 43% of shoppers got their groceries online, and visited the store 1.7 times per week, higher compared to the national average of 1.6 trips per week 

Both of these trends were expected to grow in 2020, but nobody could have predicted that a global pandemic would be the reason that both trends went off the charts. 

One of the most grappling statistics of the report is that two-thirds of U.S. shoppers said that they have changed their grocery shopping habits in response to the coronavirus outbreak. Comparing March 20-29 to March 6-12, shoppers in all age groups reported making significant changes in the way they get their groceries. The leading age group making changes was the Gen Z & Millennial shopper group, with 68% of those surveyed changing habits. They were followed closely by Boomer shoppers at 64%, and Gen X followed them at 64%. 

In addition to changing their grocery shopping habits, 72% of those surveyed shared that they have been implementing new behaviors like social distancing, a trend even some grocers have picked up on with the introduction of one way aisles. 70% of individuals surveyed said they have been avoiding public areas, and 64% said they have been sheltering in place and at home. 

Acosta also reported that top categories are changing, recording that 44% of shoppers are buying canned foods and shelf stable foods like rice, pasta, and beans, and more paper products. 36% of shoppers are buying more household cleaners and disinfectants and 36% are buying bottled water. 

Unsurprisingly, 9 out of 10 shoppers experienced out-of-stocks during their most recent grocery trip, with 47% of shoppers saying that they were able to find some sort of substitute for items that were unavailable. 

Acosta concluded their report with helpful tips for retailers and manufacturers during this difficult time, including suggestions on implementing new solutions that reduce the risk of shopper and employee transmission of the virus with shields, re-establishing inventory of core items, and providing creative, budget friendly meal solutions in store and online. 

For more information on the report and best practices during COVID-19, click here

 

What the Grocery Industry Can Learn from Nordstrom About Customer Service

What the Grocery Industry Can Learn from Nordstrom About Customer Service 453 299 Natalie Tatum

It’s no secret that Nordstrom is synonymous with customer service. We’ve all heard the age-old story of a customer returning tires to a Nordstrom and getting a refund even though the high-end fashion retailer doesn’t sell tires. Whether it’s an urban legend or a lesson on the legacy that a good customer service story can leave on our minds, Nordstrom’s customer service can teach more than the fashion industry something about customer care and satisfaction.

Nordstrom’s famous customer service can be broken down into two categories: their detailed care of the customer from the moment they walk into the door to days after their purchase, and the way they empower their employees.

In a 2014 Quora post, former Nordstrom employee Ambra Benjamin cited many examples of customer service excellence that helped Nordstrom stand out in the crowd, including that associates are encouraged to walk customers to the items they’re looking for instead of telling them where to find them, walking their purchase to the customer instead of handing it to them over the counter, and providing a one to one service model. These little details and experiences add a touch of luxury to the shopping experience and leave a lasting impression on the minds of the customers, even if they don’t realize it in the moment. If you’ve ever been to a Nordstrom, you’ll be able to recall the camaraderie of the shopping experience just as easily as you’ll be able to remember the purchase.

Sales associates are even known to go above and beyond outside of the store. One Black Friday, an intern passed out hot chocolate, coffee, and doughnuts to the growing crowd outside in an effort to keep them calm, comfortable, and congenial going into their mad-house shopping spree.

Shoppers aren’t the only ones being taken care of – Nordstrom has landed a spot on the Fortune 100 Best Companies to Work For for 20 consecutive years. Employees cite the extensive training and educational opportunities within the company as their top reasons for loving where they work. Nordstrom also does a great job of hiring employees they can trust, emphasizing their famous “use your best judgment” mantra that’s almost as well known as the tire story. The company is also passionate about embracing the “Nordstrom Family” mindset. In a 2018 Business Insider article with former employee Aaron Valentic, Valentic said one of his favorite parts of working at Nordstrom was the company morale and culture.

“Sales associates were regarded at times as higher than managers, and if you were a minority you were seen as an asset. As someone who was gay, I never once felt that I was not welcomed or not an important part of the ‘Nordstrom Family.'”

While Nordstrom leads the fashion industry in customer satisfaction, grocers can learn from Nordstrom’s examples to recreate that specialized, intimate experience with a food-focused spin.

While it isn’t always efficient for baggers to bring each bag around to the customer like Nordstrom does, grocery employees can still step up their game with how they assist the customer with their purchases. Like Publix, other grocers can implement initiatives for employees to walk customer’s purchases to their car and help them unload and return the cart. While it takes the customer the same amount of time and roughly the same amount of energy to walk to the car and get situated for their drive home, eliminating one round of the heavy-lifting adds a luxurious touch to their grocery shopping experience.

The grocery industry is no stranger to creating comfortable environments in-store. With coffee shops, banks, and even childcare being offered in some stores, grocers are personalizing micro-experiences to their shoppers and their needs. Micro-experiences, whether being a specialist in-store to educate shoppers about a new dish they can recreate in their home or events like shop n’ sip, ensure that time spent grocery shopping is eagerly anticipated and not dreaded. Especially with online ordering and delivery at its peak, creating a comfortable environment for shoppers should be at the forefront of customer service initiatives in order to get customers back through the door.

Beyond the customer, grocers can encourage their employees to provide top notch customer service by treating them with the same respect and care. In a 2019 Investopedia article about the best grocery companies to work for, Trader Joe’s, Whole Foods, and Publix top the list because of their competitive salaries, enchanting work environments and stock opportunities for employees.

Even with automation at the forefront of grocery innovation, people will always need to get groceries and there will always be room to personalize the grocery-shopping experience. Enchanting shoppers with hyper-focused assistance and and  relaxing experiences, and providing employers with incentives to further their involvement in the company are just a few examples of what the grocery industry can learn from Nordstrom. With these tips, any grocer can become synonymous with customer service too!

 

 

 

 

3 Key Takeaways from NRF 2020

3 Key Takeaways from NRF 2020 1200 800 Natalie Tatum

The National Retail Federation (NRF) Big Show is not an event to be missed. Retail industry leaders from around the world gather for three days in the retail capital of the world, New York City, to discuss upcoming trends, technologies, and troubles that the world of retail and its consumers are facing.

In 2019, NRF taught us about the importance of transparency in retail, the evolving workforce, and how personalization all come together to amplify customer experience. In 2020, NRF shifted more towards personalization to stress how important it really is to not only know your customer, but to be their eyes and ears in the global marketplace. Here are the top three trends we saw from NRF 2020 that are shaping the future of retail. 

Bringing Back the Human Element of Retail 

In a world where automation and artificial intelligence are at the forefront of most retail operations, NRF flipped the script by highlighting the importance of customer interaction and fostering human connections in the workplace in multiple sessions during the three day event. 

Newly appointed Walmart CEO John Furner described how his time with Sam’s Club made him realize that the best way to connect with the customer isn’t through relatable ads on social media, but by re-introducing sales associates as brand ambassadors that can aid and guide you through your shopping process. 

“I visited our Club in Lubbock, Texas, and met the club manager, Jerry, who had worked at the company for 18 years. I asked him a couple questions about his business and he immediately stepped to the back. He had 15 team leaders in front of him and said, ‘They’re going to answer all your questions.’ As I started learning from them, they were not only answering my questions, they told me everything you’d ever want to know about the business, and what it takes to run a business in Lubbock, Texas. At the end of that, it was so clear that if we could replicate that in 100 buildings, we would have the basis of a winning strategy.”

Furner also cited that bringing store leadership out to the floor and away from the front office had a substantial impact on operations and problem solving in the retail space. Where before leaders wouldn’t hear of an issue until it had already been attempted to be fixed, they were now hyper-aware of every moving element in the store, allowing them the opportunity to assess problems, evaluate opportunities and implement new techniques in a more timely manner.

Furner also mentioned that improving the work experience wasn’t only associated with increasing pay and salary. While Walmart did increase pay and salary, Furner cites that one element of major success for Walmart employees comes from rolling out programs that make it easy to change schedules to accommodate work-life balance as well as initiatives to enhance in-store productivity. 

In a separate session “Humans are Back: Why Companies are Putting a Premium on the Human Element of Retail,” PSFK CEO Piers Fawkes divided the delivery options with personal utility into five categories: inspire me, meet me, serve me, value me, and know me. Each category highlights a different element of nurturing a relationship from retailer to customer, citing personalized recommendations, convenience, and solution-based sales behind each reason. 

In a recent survey by PSFK, data showed that 70% of consumers expect a retailer to offer them the same level of personal service whether they are shopping in a physical store or on their mobile device. With initiatives across the retail industry focusing on bringing human experience and expertise back to customer service, the importance of connecting with the customers in a traditional way was at the forefront of NRF 2020. 

Micro-Experiences are a Must

The micro-experience isn’t a new idea or trend in retail. Retailers have been focusing on the small format, in-store activations that engage consumers in a way that can’t be replicated online for the greater portion of the last 10 years.  However, traditional micro-experiences are being left in the dust by industry leaders Rent the Runway, L’Occitane, Nike, Foot Locker, and CAMP. 

Rent the Runway, an online service that provides designer dress and accessory rentals, recently partnered with W Hotels to find a solution for everyone’s least favorite part of traveling: packing and unpacking. The partnership allows customers to reserve and rent their clothes online and have them delivered, hung, and ready to wear in their hotel room when they arrive. 

L’Occitane maximized on a sensorial and immersive micro experience in their New York City Flagship store by taking customers on a virtual reality journey to Provence, their founding city. Guests are also encouraged to touch and feel products under a “rain shower” sink and be transported to the south of France while sitting under the store’s Mediterranean-inspired olive tree. 

Nike’s “Vending Machine” challenges retailers to rethink loyalty programs beyond points and discounts. After finding that 40% of customers use the Nike app, Nike introduced exclusive member rewards for customers that use the Nike Training Club activity app that provides members with personalized access to limited edition product collections that correspond to the training activities they frequent the most. Members only sales, promotions, in-store events & services such as ‘Clean Kicks On Us’ and “Nike Master Trainer Fitness Class” ensure loyal customers receive curated experiences and exclusive benefits.

Foot Locker opened “regional power stores” in Detroit and Philadelphia after first introducing them in Liverpool and London. The stores feature exclusive products and touches tailored to local taste, aiming to deliver on “experience” and hoping to rebrand into a “hub of local sneaker culture, art, music and sports” by hosting traffic-driving community events like pop-up nail salons and Xbox gaming sessions.

CAMP describes themselves as a family experience store designed to inspire and engage families by combining merchandise, play and media. Inside camp are rotating themed experiences, where “every surface is a seamless blend of play and product.” With themes like Base Camp, Toy Lab Camp, Travel Camp, and Cooking Camp, both merchandise and experience are constantly changing to ensure customer loyalty and interest through each quarter. 

Micro-experiences of the past now turn a blind eye – but by looking at these industry leaders, it’s easy to see how micro-experiences have rebranded from a simple in-store event to a fully integrated shopping experience. After all, according to a study conducted by Expedia and the Center for Generational Kinetics, 74% of millennial shoppers said that they would rather pay for experiences rather than things. 

Emotion-Fueled Purchases

Now more than ever, consumers are shopping with alternative causes in mind. In the session The Rise of the Emotional Economy: Honesty, Empathy, and Integrity Resonate with Consumers: Leslie Ghize of TOBE and Amy Vener from Pinterest, Ghize stressed that retail is switching from a commercial to an emotional economy. 

When evaluating brands, consumers primarily use emotions, their personal feelings and opinions rather than brand information or facts to craft an opinion. Advertising research revealed that the consumer’s emotional response to an ad has a far greater influence on their reported intent to buy a product than does an ad’s content – by a factor of 3-to-1 for television commercials and 2-to-1 for print ads. 

Additional research conducted by the Advertising Research Foundation concluded that “likeability” is the measure most predictive of whether an advertisement will increase brand sales. Studies show that positive emotions toward a brand have a far greater influence on consumer loyalty than trust and other judgments, which are based on a brand’s attributes. 

Ghize went on to say that “brands need to look more actively and purposefully at the culture buzzing around them – in entertainment, in fashion, in news, on social media – and use that awareness to inform how they should best position and integrate themselves into the world.”

Following the publishing from a SAP 2018 survey on socially conscious companies, Alex Atzberger, president, SAP Customer Experience, SAP said “we live in an experience economy in which consumers care not just about products but also about a company’s purpose, value and global impact. For retailers this can be decisive while competing during the holiday season, when shoppers are spending more than at any other time of the year. Our survey findings indicate that when a company closely connects its purpose to the brand, chances are customers will relate to it on a more personal, human level – which supports customer loyalty and completes the customer experience.”

Advancements in customer service, micro-experiences and cause-conscious shopping are shaping the world of retail at a rapid rate. Lessons we learned from NRF 2020 not only pertain to major retailers like the Walmarts and Nike’s of the world, but the grocery industry as well. Through 2020, retailers far and wide should prioritize the value of a heightened person-to-person interaction, the power that a micro-experience has on a shopper, and the strength of harnessing consumer emotion in a progressive way. With these tools under your belt, any industry can shape the future of retail in their own unique way. 

Large Format vs. Small Format – What is Winning in Grocery?

Large Format vs. Small Format – What is Winning in Grocery? 720 480 Andrew Hoeft

If you’ve been keeping up with grocery news (here are our favorite places to do so), you’ve likely seen a trend emerging in stories about the format of grocery stores. We’re experiencing a large scale shift in retail as a whole, and it’s only natural that the grocery industry would follow suit.

Traditional retail size and formats aren’t cutting it anymore. We’re seeing the demise of storied department stores like Boston Store and Shopko as retail goes digital and consumers rely on brick-and-mortar retail more for experience than for hefty levels of inventory. It’s simply easier to outfit an online shop with every item that your company carries and shipping directly to customers as-needed  vs. shipping out to stores and hoping items will sell out on your shelves.

You can see that trend emerging in grocery stores as well. Small format stores are becoming a more common occurrence, and we’re wondering as much as anyone – are these curated spaces the grocery stores of the future?

Small format grocery store benefits

The upsides of a smaller format grocery store make sense in this retail environment. They’re great in city neighborhoods where the population is dense and the options for food are scarce. Food deserts can be remedied with small format stores in these locations, and keep residents from having to travel for miles for their weekly shop. 

In addition, shopper behavior has changed drastically over the last 10 or so years. Online click and collect and grocery delivery are becoming popular, and when shoppers are heading to a brick-and-mortar store, they’re coming in more frequently for less items. They’re either stocking up for the week, or purchasing only enough ingredients to make dinner that night.

We’d be remiss to neglect mentioning how small format grocery stores can help with grocery’s narrow margins too. All of the overhead that comes from managing a superstore can be minimized when opting for smaller space.

Who is experimenting with small format grocery stores?

  • Kroger – the grocery giant is dipping its toes into the water with their Kroger Express formats, conveniently located inside a Walgreens location. Their first test is located in northern Kentucky, and offers more than 2,000 items.
  • Whole Foods – Whole Foods Market Daily Shop is a grab-and-go version of a small format grocery store that the health-conscious retailer is testing in New York.
  • Sendik’s – The Milwaukee-based grocer has been experimenting with pairing their small format store with a gas station to offer more convenience to the customer. So far, the test has been highly successful.
  • Giant Foods – Ironically, Giant Foods is getting in on the small format game. They’ve opened a 9,500 square foot Giant Heirloom Market in Philadelphia.
  • Hy-Vee is scaling down with 10,000 square foot Hy-Vee Fast & Fresh locations.

Small format grocery store challenges

Though these stores are definitely bringing something to the table for grocery retail (and adapting to current shopper behavior), these experiments haven’t all been successful. In Austin, Texas, in.gredients, a package-free micro-grocery store closed because of rising rents, and Plenty Grocery & Deli, a Chicago-based store, closed in April 2019.

One Grocery Dive article said it best, “Offering a limited range of products has a quaint appeal, but operating costs in dense areas can be high and consumers looking for a full shop may still opt for a traditional supermarket.”

Smaller format stores are working as a separate offering for many large, well-known retailers, but they do face unique challenges in the shifting retail landscape. You’ll likely see more stories about small grocery store format, as more retailers jump into the ring and try out their chances.

How Plant-Based Products affect Expired Loss

How Plant-Based Products affect Expired Loss 720 480 Andrew Hoeft

With every new grocery trend comes a necessary round of conversations:

“Who will our distributors be?”

“How are we going to market this product category?”

“Where should it be merchandised in our stores?”

There’s one question that is usually left out of these conversations, but could have the largest impact on your bottom line:

“How will this new product category affect our expired loss?”

Through our conversations with grocers, we’ve seen this question missed time and again, and, as your resident expiration date management experts, it’s our job to make you consider every aspect of your inventory’s expiration potential.

The latest category to fall prey to this oversight is plant-based products. Since they joined the mainstream food scene, they’ve exploded, entering nearly every category from the meat counter to the dairy aisle. Grocers like you are jumping at the chance to stock these products – they’ve seen the data, and they know carrying plant-based products will help their bottom line. 

Just to give you a taste of the trend: “Sales were up 31.3% overall between 2017 and 2019, to a grand total of nearly $4.5 billion in revenue,” according to the Good Food Institute and the Plant Based Foods Association.

However, like every new product category, plant-based products will have some effect on your expired loss metrics – both positive and negative.

How plant-based products affect expired loss

First, the good news: plant-based foods simply don’t pose as much of a risk to shoppers past their expiration date because they are not made from animal products. For this reason, they have longer shelf lives in your store.

Now, here’s where it gets complicated. Longer shelf life does not necessarily mean you’ll have better expired loss stats.

With any new category, including plant-based products, you’re still establishing a customer base. Even though sales are rising, and plant-based products are quickly becoming a must-have for grocers, there is still education that needs to take place to get shoppers on board.

If the products that you stock don’t move as quickly as you’d anticipated, and you aren’t keeping track of your expiration dates proactively, you may end up with expired plant-based products on your shelves. And your expired loss numbers will go up, up, up…

Tips to mitigate risk of expired loss

There are a few key best practices to avoid this issue with any new category:

  • Carefully track your plant-based product movement metrics in order to make accurate inventory purchases in the future. Start small, and gauge your shoppers’ interest in the category before wasting funds on large orders that may expire before they can be purchased.
  • Educate your customers on food safety practices for plant-based products. What does a plant-based product smell like, look like, taste like if it’s out of date? Storing plant-based products effectively is another topic that you may want to cover.
  • Proactively track your expiration dates so that you can mark down close dated items before they expire and help move them. There are many forms of expiration date management, but a technology-focused process that notifies you when an item in your inventory is about to expire is the best way to avoid not only a shopper coming into contact with an expired item, but an increase in your store’s expired loss.

2020 Grocery Wellness Initiatives to Delight Your Customers

2020 Grocery Wellness Initiatives to Delight Your Customers 720 480 Andrew Hoeft

Wellness is the buzzword of the month around this time of year as people set goals to hit the gym, eat healthier, and focus on their mental health. The new year gives us each an opportunity to imagine a better version of ourselves and put plans into place to make that happen. As a grocer, you’re perfectly primed to help your customers achieve their goals instead of giving up on them by February like 80% of the population.

 

Today’s customer sees their grocery store as a wellness resource, not just a place to stock up on ingredients or grab a quick carton of milk. According to FMI, 55% of consumers see their grocery store as a health ally. They’re relying on the place that is selling them food to help them make healthy choices while cooking satisfying meals. For grocers, this is a huge boon and a way to increase tight industry margins while increasing customer satisfaction and building a brand loyal following.

 

Wellness Initiatives to Start in Your Grocery Store in 2020

We have a few helpful tips to kickoff the new year right with wellness initiatives in your grocery store.

Position your store as an expert

First and foremost, your customers are not going to trust your wellness expertise unless you give them a reason to. Without a significant effort to adjust your branding, content, and in-store signage to reflect a wellness focus, your shoppers won’t think of you as their health ally. Take a note from Giant Foods who has created a podcast to share relevant health and nutritional information with their shoppers. They’re using an innovative platform to position themselves as health resources, and creating that relationship with their customers.

Offer an in-store dietitian as a resource

Dietitians have been working in grocery stores for decades, but highlighting your existing program or hiring a new member of the team to provide dietary consulting to your shoppers can give you a leg up in 2020. Customers will be thrilled to know that they can ask a registered dietitian questions about the products that they’re buying, and they’ll be well on their way to hitting their wellness goals.

Add nutrition attributes to your aisles

In-store signage and education can go a long way in showing your customers that you care about their health and want to point them in the right direction when it comes to purchasing food. Raley’s is leading the way in this area, posting nutrition attributes as in-store signage that literally points customers to gluten-free, low sugar, and low calorie options.

Utilize NGA’s wellness activation kit

If you’re still feeling like you don’t know where to begin with grocery store wellness, tap your association resource, NGA. The National Grocers Association has assembled a wellness activation kit that can help you get your initiatives off the ground and into your customer’s frame of reference.

This year, think outside of the box with your typical wellness marketing campaign. Implement a few engaging initiatives to activate your customers and position yourself as a health resource and ally to win in 2020.

 

2020 Grocery Trends: Robotics

2020 Grocery Trends: Robotics 720 561 Andrew Hoeft

The “future of retail” holds a lot of promise – and a lot of promises. During annual conferences and think tanks, the possibilities of a grocery industry dictated by artificial intelligence, robotics, and detailed consumer insights are regularly discussed with fervor. Entire presentations are spent talking through what it could be like to shop for groceries in the future.

There’s just one problem. The future is now.

Grocers aren’t waiting for retail-focused technology to emerge before testing new innovations in their stores, and, frankly, they can’t afford to. Retail giants are surging ahead, and making technology a non-negotiable for grocers everywhere. 

Robotics are just one way in which grocers are showcasing their willingness to adapt to the current retail climate.

 

Who is using robots in their grocery stores?

The most notable use of robotics in the grocery industry thus far is Marty the robot. Marty is an in-store robot that wanders the aisles of Ahold Delhaize’s Stop & Shop and Giant Food Stores. He’s a tall, rectangular figure on wheels with large googly eyes and a small grin – meant to give off a human-like appearance and put surprised shoppers at ease. Marty’s main skill is to alert store managers to hazards like spills or items dropped on the floor. The grocer says that Marty allows them to cut down on employee hours and focus in on the smaller things that can take up so much of a store associate’s day like fallen price tags.

An article by New Food Economy said, “Ahold Delhaize has explicitly told shareholders that the company is investing in automation and artificial intelligence to supplement or even replace human labor.”

 

Walmart has also gotten into the robotics game, though at a far less intrusive level. The retail giant has introduced automatic floor scrubbing robots into some of their brick and mortar locations across the United States.

 

Pros and cons of robotics in grocery stores

Robotics is one of the more controversial 2020 trends. It’s not all benefits and value adds with this concept. 

Adding robots into your store can position you as “worker-averse”, and quotes like the one from above about reducing employee hours don’t help. A recent Washington Post article says, “As Walmart turns to robots, it’s the human workers who feel like machines.” 

Technology can be a great thing in retail, but it also has the potential to remove that undeniable human factor that is such a keystone of the traditional grocery experience. Today’s robots are industrial, creepy, and cold, and, even if they are given large eyes and a smile, they are not easily integrated into a grocery store that is determined to provide that neighborly feel.

It seems as though the large investment that it takes to integrate robotics in a grocery store have not paid off just yet. There aren’t many successful use cases of using these technological innovations – so far, they haven’t been able to do much for grocers other than alert them to things that store associates will still need to take care of. One Ahold Delhaize worker has been quoted as calling Marty, “a glorified Roomba.

There are some potential benefits to robotics in the grocery industry when the technology catches up. Adding robots into your store that can effectively take care of smaller concerns can allow your employees to refocus on meaningful tasks like customer service and that oh-so-important person-to-person interaction. Saying “yes” to robots can also position your business as tech-forward and innovative, and add an element of modernity for your customers.

All this is to say that robotics definitely have a place in the grocery industry, and it’s likely that we’ll see more iterations on this concept in 2020. However, it may be a few more years before they proliferate throughout the country, and become a normal sight in the contemporary grocery store.

 

2020 Grocery Trends: Grocery Delivery

2020 Grocery Trends: Grocery Delivery 720 480 Andrew Hoeft

Consumers are used to a certain level of convenience. Online shopping and quick delivery rules the retail industry today, and consumers don’t even have to leave their beds in order to complete their weekly errands. Just a few taps of a button, and their goods will arrive on their doorstep. 

Grocery delivery was the logical next step for this retail environment. Grocery shopping is one errand that many people need to complete weekly, stocking up on necessities like milk, bread, coffee, eggs, or butter. It’s not a rare task, and, to be frank, it’s not a task that many people enjoy doing today.

If a modern grocery store doesn’t offer an elevated experience, it can be a drag for shoppers to come in each and every week and purchase what they need. It can feel monotonous, inconvenient, and even frustrating to shop in a grocery store that hasn’t stepped into the new world of experience-focused retail.

So, what do you give a shopper who doesn’t want to shop in your store? The option to have their groceries delivered right to their home. Et voila, grocery delivery.

 

The current state of grocery delivery

Grocery delivery is a service wherein a shopper orders their items online, and they are delivered right to their home. It eliminates the need to head to the store for a weekly shop, or an impulse purchase.

The concept itself was slow to catch on in the United States compared to other countries around the world. In South Korea, 20% of consumers buy groceries online, and in both the United Kingdom and Japan, 7.5% of consumers do the same.

While grocery delivery has become quite common around the world, even becoming a preferred method for many shoppers, American consumers seem to have waited to judge its success before jumping in. Now, they’ve capitulated with full force.

Coresight recently conducted a study that showed 36.8% of internet-using adults polled bought groceries online in the previous 12 months, up from 23.1% in their 2018 study. That equates to approximately 93 million online grocery purchases using U.S. Census data. 

Of interest to you: the majority of these purchases came from retailers like Walmart and Target, followed by Kroger.

If you take into account the average American consumer’s buying power, it’s clear that grocery delivery’s popularity could become a major income stream for grocers across the country.

And they’ll need it. Amazon has dipped its toe into the water of the grocery industry over the past few years, and grocers need to adapt and innovate in order to stay competitive with technology-savvy shoppers.

 

Who is doing grocery delivery well?

As mentioned above there are a few retailers who are dominating the grocery delivery category, and they all happen to be major grocery industry leaders. Though many independent grocers offer delivery, the majority of purchases take place through Walmart, Target, and Kroger.

According to Supermarket News, “Walmart and Kroger have more than doubled their online grocery shopper numbers over the past 12 months, adding about 20 million and 6 million online customers, respectively.”

Those numbers are staggering in light of grocery delivery’s relatively recent popularity in the United States. Now that it’s caught on with the average shopper, it won’t be going away anytime soon, and consumers will begin to expect a delivery option from even the most independent grocer.

If you’re reading this as a small, independent grocer, you may have just let out a groan. So many grocery industry trends feel like they leave out “the little guy”, the hometown grocer who actually provides that individualized experience that customers say they crave. You feel like you’re doing everything right, but that innovations are leaving you and your business in the dust.

Not grocery delivery.

Because of its near ubiquitous adoption across the country, startups have popped up to assist grocers with executing on a grocery delivery strategy. Third party delivery systems like Shipt and Instacart exist, and they’re here to help your business implement grocery delivery without a large operation or logistical nightmare. An official partnership will still be an investment, but one well worth taking on if you want to remain relevant in today’s retail atmosphere.

 

Pros and cons of grocery delivery

Every trend has its upsides and its downsides, and it’s up to you, as a grocer, to decide what makes the most sense for your business. But, you don’t have to do it alone. We’re here to help you break it down.

Let’s start with the benefits, or the “pros” of grocery delivery, shall we?

First and foremost, the convenience factor. Customers are no longer patient. They no longer are forced to take part in activities that they don’t enjoy, that don’t add value to their lives, that don’t bring them joy. Grocery shopping can easily fall into the category of “things I don’t want to do”, therefore giving your store a negative association simply for existing. 

When customers aren’t given the option to forgo traditional means of retail, they can become frustrated, and, instead of relishing in the experience you’ve created in your store, instead of finding the joy in the person-to-person interactions you encourage with your store associates, they’ll find themselves resenting the fact that they have to leave their homes to shop each and every week. When they’re strapped for time, or strapped for energy, they want to be able to turn to a convenient option. Grocery delivery provides that to them.

More than convenience, grocery delivery is also a trending concept in the United States market. It’s gaining momentum quickly, and we would be remiss to say that it could be important for your business to jump on the trend right now while it’s hot. If you want your grocery stores to be considered thought leaders, innovators, or customer service-focused, you’ll want to look into the bevy of ways that you can offer a grocery delivery service. Even if you work with a third party delivery system, you’ll find that your customers will view you in a whole new light.

One more bonus to grocery delivery: it’s all done digitally, which allows you to gather new insights on your shoppers. Users must typically opt in to the service, and provide contact information like an email address or a phone number. This gives you a new way to contact them with promotions and information that could be relevant to them. While your usual access to a customer may be through in-person interaction and traditional advertising, implementing a grocery delivery service with a digital platform could allow you to push deals directly to your customers through their device or through the contact information that they provide. You’ll also be able to gain insights from their purchases through your delivery service to make informed inventory and advertising decisions.

Now for the negative side of grocery delivery. Though this concept is fast-growing  in America, it does have its downsides, and it’s imperative that you evaluate your individual business situation before making any large scale operational decisions.

The first piece that we have to point out about grocery delivery is that it’s not easily accessible for every grocer. Large retailers like Walmart, Target, and Kroger have success with their grocery delivery services because they have the resources (financial, operational, and personnel) to handle the complicated logistics involved with grocery delivery. 

As an independent grocer, you’ll likely have to utilize a third party vendor relationship in order to implement grocery delivery. That doesn’t have to be a bad thing for your business, as these vendors already have thorough experience with grocery delivery. However, it means that you don’t have direct control over what happens to your product as it’s being delivered from point A to point B. You won’t have direct control over the experience your customers are being provided. When you don’t have an in-house service, you simply cannot control the many variables that come into play with grocery delivery, and that could mean hardship for your business.

Finally, let’s talk financials. Grocery delivery may be cost effective for your customer, but it’s a major investment for you if you try to build your own internal operational structure. Hiring the personnel needed to have an effective grocery delivery service will cost you cash, and implementing the processes and procedures needed to make sure your customer has an elevated experience will cost time and money. The financial stability (and cash on hand) needed to run a DIY grocery delivery service for your grocery store is significant, and it’s something that definitely needs to be considered.

Grocery delivery is one of the hottest trends in this industry, and perhaps the one that is most achievable, even for independent grocers. Though it’s been around for a few years now in the United States, now is the time to hop on the trend because it has been proven to be a success with so many retailers. Consider your business situation and see if there is room in your strategic plan and your budget for a grocery delivery system. It could be a piece of the puzzle that skyrockets your business in 2020.

 

2020 Grocery Trends: Artificial Intelligence

2020 Grocery Trends: Artificial Intelligence 720 480 Andrew Hoeft

When we attended the National Retail Federation (NRF) Big Show earlier this year, artificial intelligence, also known as AI, was a major topic of conversation. Every session that discussed the technological advances that were on the horizon for the retail industry included a hefty examination of AI. 

AI holds a lot of promise for the retail industry. From the ability to accurately predict a shopper’s behavior using data from their previous transactions to being able to serve personalized ads to shoppers in-store as they’re wandering the aisles. However, many grocers have been hesitant to make the significant investment, as the technology often requires an outside vendor or technical expert in order to be put to use. 

To stay ahead of the curve, grocers need to have a greater understanding of the world of AI. Today, we’re breaking down this 2020 grocery trend.

 

What you need to know about artificial intelligence in the grocery industry

While AI has been promised as a gamechanger for the entire retail industry, much of the grocery sector hasn’t been quick to implement and adapt to technology, nor push the boundaries of what the tool could be used for. 

One example: AI’s predictive abilities. Grocers have had a tough time throughout the years of predicting the demand for specific products in their inventory, “with forecasts often containing errors ranging from 40 to 60%”. While transactional data can be a good indicator, it may not take into account all of the factors that could influence a shopper’s buying decision. AI has the ability to integrate factors like weather patterns, changes in social climate, and brand perception into predictive forecasts to give grocers a better idea of what they need to stock up on, and which products can be left off of the next purchasing order.

 

How grocers are using AI

The most-talked about use of AI in grocery lies with Amazon Go, a series of concept stores that use artificial intelligence to allow customers to pick items up off the shelves and walk out of the store without the traditional process of queuing, scanning, and bagging. The customer’s Amazon account is charged for the total of their purchase, and they experience a completely frictionless shopping experience, all thanks to AI. This concept was quickly picked up by grocers like H-E-B and Kroger.

In other grocery AI news, Ahold Delhaize announced a partnership with the Innovation Center for Artificial Intelligence, which would allow them to “make product recommendations to consumers and manage goods flows and optimize the supply chain”.

Other notable uses of AI in grocery:

 

Pros and cons of artificial intelligence in grocery

Artificial intelligence holds a lot of promise for every industry, but particularly for retail, and, even more specifically, for grocery. However, like every 2020 trend, it has its pros and cons.

Many of the benefits of AI are specific to to the grocer, including increased data collection on customer behavior, preferences, and influencing factors. This data can inform grocers on their inventory decisions, as well as marketing messages and discounts. These benefits can also be passed on to the consumer, with more targeted specials.

Artificial intelligence could change the way grocery retail runs, but for it to have a major impact it would require a major technology investment from the grocers. As artificial intelligence becomes more widespread, costs may subside, but for now grocers who want to get in on the trend must set aside significant funds. 

An additional downside of artificial intelligence could be the tendency for technology to replace grocers’ focus on person-to-person interaction, which is at the heart of a successful grocery experience.

As you look ahead to 2020, artificial intelligence may be on your wish list for innovation in your store. Consider the successful use cases that already exist in the grocery space, along with the aforementioned pros and cons, and you’ll be able to make the correct decision for your business and your customers.

 

2020 Grocery Trends: In-Store Cooking Service

2020 Grocery Trends: In-Store Cooking Service 720 480 Andrew Hoeft

There’s a common consumer problem in grocery stores (thought it’s not as much of a problem for grocers!). As they’re wandering through the aisles, trying to decide what they want to eat for dinner later that night, they find themselves growing hungrier, and throwing snack items into their cart, giving into their cravings through their purchases.

When they get home later, they dive into their snacks and dinner becomes a distant thought. 

What if grocers could satiate both of these customer needs – real-time hunger and a wholesome meal? 

That’s what innovative grocers have been chasing over the past few years, and now the trend is becoming widespread. The grocery industry has latched onto the idea of in-store cooking services – and they aren’t letting go.

 

What’s the deal with in-store cooking at grocery stores?

When we say in-store cooking, we don’t mean the typical hot bar or deli options. Many grocers are taking convenience to the next level by adding in grilling stations, hand-rolled sushi counters, and more. They’re investing in trained chefs who can put together a satisfying, and often dietitian-approved, meal for their customers as they look on.

Grocery stores aren’t just grocery stores anymore – they’re competing with fast casual dining. After all, high end customers are flocking to grocery stores for an experience, for healthy and wholesome options, and for high-quality ingredients. If a grocer can add in an opportunity for them to interact with a talented chef who is using their store’s inventory to create a mind blowingly good meal right in-store, they’re tapping into all three of those customer desires.

 

Who should we look to for success stories?

Mariano’s is one of the best in class examples of in-store cooking services. The grocer installed grilling stations in many of its stores – dubbed #MyMarianos – that grilled prime cut meats and fresh seafood right there in front of customers. The stations reached their peak popularity in 2015. Unfortunately, the program has been phased out, but not without creating interest among the industry.

Gelson’s is another early adopter of grilling stations, and Whole Foods has even gotten in on the in-store cooking service trend.

 

What are the pros and cons of in-store cooking services for grocers?

As you may guess, the experience of seeing your food cooked in front of you by a trained chef is a major benefit of in-store cooking services. It makes customers feel like they are being treated, that they are not only getting a convenient meal, but something that is healthy and fresh. Customers can interact with your staff, asking them questions about cooking techniques that they may be able to recreate at home with the ingredients that they’ll purchase in your store. 

In addition, these services can be personalized to local cuisine and shopping habits. For example, a gulf coast grocer may invest in seafood stations, while a Midwest grocery store owner could opt for a focus on beef dishes.

As mentioned in the Mariano’s example, in-store cooking services aren’t always a slam dunk. They’re often expensive, creating extra overhead with the addition of cooking staff and equipment installation, maintenance, and repairs. While grocers may be enticed by the elevated experience an in-store cooking service could provide, they must also be aware that they may open themselves up to financial risk if food borne illness finds its way to their customers.