Unless there are some frightening changes in the food industry in the next few years, computer technology isn’t a part of the food we eat. However, the internet, eCommerce and mobile devices have drastically changed the way modern consumers shop for food, whether they are in the store or shopping online. As with any industry, it’s important for grocery store owners to change and adapt their store’s marketing and design using the latest tactics to meet the expectations of their customers. Recent studies from Phononic and the Food Marketing Institute provide some insight into what customers want to see in a modern grocery store.
Technology Integration and Consumer Expectations for Modern Grocery Stores
Phononic, a company that manufacturers freezer units for grocery stores, conducted a survey of more than 1,000 consumers to get a better understanding of the grocery store retail landscape and consumer trends. A key takeaway from their report is that the internet and ecommerce have changed consumers expectations for convenience when shopping in all venues.
According to the report, nearly nine out of 10 (89 percent) shoppers surveyed said they want to shop in a grocery store that understands how to make buying groceries an easier and/or more efficient experience. That sounds like a lofty goal, but the respondents also zeroed in on some specific areas stores should strive to improve.
The vast majority (92 percent) of the surveyed shoppers said it was important that the layout of the store makes it easy to find things. One way to accomplish this would be to make item pairings easier to find. In the survey, roughly two-thirds (64 percent) of the respondents stated they would be more likely to buy products if they were shown together, such as chips and dip or cheese with the crackers. Even small changes in display unit types can have an effect. According to the Phononic data, 77 percent agree that with stand-alone freezers, they’d prefer them to be more at their height instead of reaching down into them.
“As eCommerce innovation continues to disrupt brick-and-mortar retail in response to consumers’ desire for a more convenient and personalized shopping experience, traditional retailers are adapting to stay relevant,” said Tony Atti, Founder and CEO, Phononic, in a press statement about the research. “Refrigerators and freezers have long been warehoused in the back of the store, but cooling innovation will realize distributed solutions that feature healthier food options at checkout, more efficient store layouts and additional impulse purchases. By embracing new technology, retailers will improve consumers’ shopping experiences, and ultimately survive – and thrive – in this increasingly competitive landscape.”
In many ways, grocery stores haven’t changed much over the 25 years. While some larger chains have made efforts to integrate new technology, these efforts have been limited at best. This lack of integration hasn’t gone unnoticed by many shoppers. According to the Phononic data, 50 percent of consumers say that grocery stores haven’t yet figured out how to use technology like other retailers have.
While there are many ways to integrate technology into retail stores, grocery stores included, the Phononic study offers some data on a few grocery-store-specific solutions. [To be fair, these solutions happen to focus on products that Phononic sells.] For example, more than 75 percent of their survey respondents said they would be likely to use smart technology in a refrigerated unit to find recipes or the right food/wine pairings. And nearly half (46 percent) of the respondents said grocery stores should have more frozen and/or refrigerated options at checkout, which would make it easier to try new things.
The Future of Grocery Store Shopping Online
If you told someone 25 years ago that a large number of people would buy their groceries online, they may have thought you were crazy. Even in the 1995 film, The Net, the plot focused on the idea that because the Sandra Bullock character ordered all her meals from online services, no one knew what she looked like and she could easily be replaced (it was the 90s). But here in 2018, many people live lives where most of their shopping is done online (then again, identity theft is a huge problem nowadays, so maybe The Net was right).
Grocery stores have often been seen as the last bastion of the brick and mortar store, and that’s probably true. People will be buying all their clothing online before they’re buying all their food online. But even if there will always be a market for a place to buy fresh produce, that doesn’t mean that grocery stores are immune to the same online pressures of other retailers.
According to a recent study by the Food Marketing Institute and Nielsen, in as few as five to seven years, 70% of consumers will be grocery shopping online. Growing faster than previously expected, the estimated $100 billion spend, which is equivalent to every US household spending $850 online for food and beverage annually, will occur by 2022 or 2024.
“The grocery industry is currently in the age of digital experimentation, where the roadmap on how to navigate and achieve real and profitable growth continues to evolve,” said Chris Morley, U.S. President FMCG and Retail, Nielsen. “While analytics will continue to be critical for retailers and manufacturers to understand the digitally engaged food shopper on a deeper level, a collaborative approach to balancing physical and digital sales strategies is the key to unlocking omnichannel success.”
To help grocery stores owner prepare for the coming shift to increased digital integration, FMI and Nielsen offered the following six tips with additional notes from Market Research Today added in italics.
Six Digital Transformation Imperatives For Omnichannel Success
- Align Organizational Structures for Omnichannel Success: Integrate digital offerings in parallel with brick-and-mortar operations. By keeping a unified digital and in-store marketing campaign, grocery stores can use social media, PPC and location-based ads to boost in-store sales.
- Address Discrepant Datasets: Scrub master data files for discrepancies; strength in data and accuracy is a critical component to successfully support online sale efforts. When email servers decide whether to put a certain email in the inbox, the promotions folder, or the spam file, the decision is based on the response rate from previous campaign. Using outdated lists can hurt marketing efforts by making it seem like a brand is sending out spam or unwanted emails.
- Integrate Forecasts to Increase Operational Efficiencies: Integrate online and offline forecasting so the right amount of inventory is available to meet orders through either channel. At this point in the ecommerce, both “showrooming” and “webrooming” are legitimate concerns for retailers. It’s important that supply chains make it possible to quickly get most products to customers as quickly as they can get it from any other channel. This can mean implementing site-to-store pick up or ensuring in-store promotions carry over to the website.
- Optimize Shopper Insights: Bring retailer and manufacturer shopper information together into a single, comprehensive view of customer insights. Make sure to view your customer data from all angles. Combine the online and in-store data set to get a fuller picture of your target consumer, but make it possible to separate them out again when it’s time to fine tune targeting for each marketing channel.
- Improve Marketing and Promotions: Optimize the management of omnichannel marketing and promotions. As stated before, it’s important that all channels have consistent pricing and promotions. Sometimes, a customer sees something at a store at a great price, but waits until they get home to research other online prices. If the store’s online price is higher than the in-store price, the inconsistent pricing can easily lead to cost sales in the competitive online marketplace.
- Merge Digital and In-Store Shelf Capabilities: Manage the physical shelf and its digital counterpart to create a seamless shopping experience, where consumers see the same information both on or offline. One of the most useful features for any sort of retailers is an accurate, in-store availability counter. Some larger retailers, like Home Depot even have it so their app can tell you exactly where to find an item in the local store. This kind of functionality makes in-store shopping much simpler for consumers, especially in large retail spaces.
It’s likely that the grocery store of the future will look a lot like the grocery stores of today, only with improved display units and online functionality that makes shopping easier. Online shopping has been around long enough that it’s clear many consumers still want to browse through physical products. So customers with carts going down the aisles for groceries will probably be a standard of grocery stores for decades to come. But grocery store owners still need to make the adjustments and the integrations needed to ensure they are offering a shopping experience that meets the expectations of consumers.