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[13 comments]

Grocery Shoppers Desire Better Shopping Experiences

July 22, 2014

Through a special arrangement, presented here for discussion is a summary of a current article from the Retail TouchPoints website.

Big box and dollar store retailers are boosting sales by offering fresh, frozen and packaged foods. While this may seem like a threat to grocers, the vast majority (83 percent) of consumers still prefer to shop at traditional grocery stores, according to PwC. However, many are seeking better shopping experiences.

Nearly 60 percent of respondents said customer coupons are the best way to simplify the shopping experience, while 83 percent said they want more flexibility in how they earn and spend points via grocery loyalty programs.

As part of the report, Front Of The Line: How Grocers Can Get Ahead For The Future, the survey of more than 1,000 U.S. consumers found respondents preferred specific grocery stores based on two factors: proximity to their home (68 percent) and competitive pricing (67 percent). However, 52 percent of respondents said the in-store experience is a major feature that brings them back to a store.

To have a more compelling and relevant grocery shopping experience, 30 percent of consumers said they would like to use store-provided devices and kiosks. More than half of respondents said they'd like to integrate mobility into future shopping trips.

PwC suggested five areas in which grocers could "enable change":

  1. Tailor your brick-and-mortar stores: With populations expected to shift to the South and West regions of the U.S. and increasingly relocate to major cities, consider locations closer to your target segments' home and work. Think wider aisles, more parking, easy-to-reach products, and a smoother check-out process.
  2. Personalize your marketing strategies: Build up trust through transparency. With some segments willing to pay a premium for organic and sustainably sourced products, make sure the products you have in these categories are immediately identifiable. Add storylines about the food's origins. Focus on local foods and community, as well as sustainability.
  3. Empower your staff: A staff capable of offering alternative product suggestions and recipe tips that align to shoppers' lifestyles, budgets, and health goals can differentiate your store as a source for knowledge.
  4. Transform your technology: Consider apps that incent shoppers to check in when they visit your stores, or that help them learn more about your products.
  5. Reinvent your loyalty programs: Shoppers want flexibility and control in how they earn and use their loyalty reward points, such as earning and spending points inside or outside the store on things they're already purchasing.

 

Discussion Questions:

How do you think the supermarket experience will change for shoppers in the years to come? Which changes are technology-driven and which aren't?

While we value unfettered opinion, we urge you to show respect and courtesy for people or companies about whom you comment. Keep in mind that this is a public, professional business discussion. RetailWire reserves the right to edit or refuse the publication of remarks that we deem unsuitable. We may also correct for unintended spelling and grammatical errors.

Instant Poll:

Which of the five areas suggested by PwC to enable change has the most potential to create the biggest point of difference for supermarkets against their competitors?

Comments:

I think that the people who created the survey don't actually shop in grocery stores. (There are plenty of people who let their spouse do the shopping—you know who you are.) I can't imagine that shoppers' first grocery store desire is better coupons. (More fumbling!)

It's much more likely that they want a speedy check-out experience, a great in-stock position and an opportunity to taste-test something new. Wait—that's what Trader Joe's offers.

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Cathy Hotka, Principal, Cathy Hotka & Associates

Walk-in supermarkets have to change the whole concept of direct store delivery before addressing any other concerns. Having "slots" for CPG distributors (aka outside resources) to come in and stock the shelves is just a head-scratcher to me. This appear to be nothing more than a warehousing model rather than a shopping experience.

From there, supermarkets will need to augment the UPC code with additional data to the customer. Barcodes do not work well with mobile phones and there need to be better mobile friendly markers to look up products while in the shopping aisle.

What I find promising is the pick-up grocery store model that was featured here a few weeks ago. This model works best in an urban area with subway QR codes posters similar to Tesco experiment in Korea, and it provides a way for shoppers to use ride-sharing to go to/from the grocery store and quickly pickup pre-ordered groceries.

Ed Dunn, Founder, (Stealth Operation)

Most stores today are attempting to control costs, and labor is a major part of their costs. So as they reduce the number of staff in a store, they should be giving the customer more access to information. Where a product is located, for one, and access to inventory. Why should a customer spend time looking for help just to find out if there are any more bananas in the backroom? More access to information and maybe more services, such as home delivery, or just being able to send a shopping list to the store and being able to pick up the purchases after work or school, etc.

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Frank Riso, Principal, Frank Riso Associates, LLC

The methodology used in this study is so suspect (read the sampling protocol at the end of their report) as to make the results meaningless. So it's hard to believe that shoppers want a different experience, which may suggest that nothing will change.

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Dr. Stephen Needel, Managing Partner, Advanced Simulations

It's about the food experience! Will better technology help? Yes. Will a better loyalty program help? Yes. But it's mostly about the food experience. Endless aisles, poorly lit, with cluttered signs and jammed shelves do nothing for the experience. Celebrating food, ideas, entertaining and exploring (at every price point) is where the wins are. Somehow, you have to take food away from being just another commodity, and turn it into something that it's supposed to be—delicious, fun and interesting.

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Kevin Graff, President, Graff Retail

This survey does not break any new ground. Consumers want to save time and money. For most, the effects of the Great Recession still weigh on their minds and wallets. Developing a new app is not going to help. Instead, grocers should focus on basics: Value, inventory, time savings and customer service. Most of these basics are highlighted in the survey, albeit with fancier words.

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Max Goldberg, President, Max Goldberg & Associates

Strong Internet capabilities, including electronic coupons, discounts, aisle and category information as consumers shop, will all add to the technology-driven supermarket experience. However, we cannot lose sight of the basic importance of retailing; including product pricing, out of stocks, fresh, well-stocked bins and shelves, etc.

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Kai Clarke, President, Kowa Optimed, Inc.

Perceptions of freshness are an issue at dollar stores and big boxes. Convenience stores have been dealing with this issue for a while—how appealing is a hot dog from the C-store vs. a hot dog from the grocery deli? They are probably the same, but the environment seems to suggest a difference in quality or taste.

I believe that this is the reason for shoppers' preference for grocery.

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Liz Crawford, VP, Strategy & Insights, Match Drive

This survey provides a fairly basic view of the shopper desires relative to grocery shopping. It does not, however, break new ground or present any innovative solutions.

It leans heavily on shopper segmentation as the key to success. As Stephen Needel pointed out, the sample was weighted heavily toward younger, urban dwellers and ethnic minorities. So, it would seem that a segmentation solution was inevitable.

It would also be important to understand where these shoppers were currently shopping in terms of channels and retailers. This would enable a more omni-channel viewpoint.

it will be increasingly difficult for the traditional grocery operation to compete on a broad basis. To be successful, most grocery chains will have to focus on a defined segment such as a geography (Publix), a kind of shopper (Whole Foods), a limited assortment, etc.

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Raymond D. Jones, Managing Director, Dechert-Hampe & Co.

In the future there will not be a single supermarket shopping experience, but rather a collection of different experiences that will meet the specific needs of discrete shopper groups in different locations. For example, in suburbia, busy two-income families will want the convenience of home delivery on "staple" products but will also want to be able to pick-up healthy prepared foods for the mid-week family dinner—they'll also want a common shopping list and chat features that are accessible by both parents on a smart phone app.

Singles and couples in urban areas will want to shop more frequently for smaller pack sizes and ready-to-eat meal components. Empty nesters and seniors will want clear information about healthy products on packs and via readable, easy-to-use websites and apps. Enhanced in-store service from more knowledgeable associates will be more highly valued in some locations. Value pricing will be essential for some products in some locations but price will be a secondary consideration for high quality, healthy or unique products.

Most important, these experiences will need to vary across a retailer's chain based upon the shoppers that shop in each store and they will have to keep up with these changing shopper needs as they continue to evolve.

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Graeme McVie, VP & GM, Business Development, LoyaltyOne

I expect and demand better fresh food options and want organic options and healthy options. I want better information about the food I am choosing and if the in-store experience can provide this, then I will stay loyal to that store. Today I shop where I can get fresh, high-quality produce and I know the difference. I guess I do not fit the model of letting their spouse do the shopping!

David Lubert, Industry Principal, Bridge-x Technologies

The supermarket experience will become more personalized. Retailers have the opportunity to know who their customers are and what they want with data from loyalty programs, data mining, social media sites, apps and more. The highest ranking supermarkets—Trader Joe's, Wegmans, Publix—do an outstanding job with quality fresh products and distinctive items that are well merchandised. They have enough staff to demonstrate new products, assist shoppers and keep checkout waits to a minimum.

They also know what their shoppers prefer—the assortment is curated for target consumers and the displays are easy to shop, quality is right and pricing reflects value shoppers understand. The stores are smaller and well arranged—we know the average shopper buys the same 200 or so SKUs each shopping cycle. The large stores of everything with 50,000+ SKUs are seas of sameness, hard to navigate, and take more time to shop. With so many retail channels to handle different shopping missions, the shopping experience has to be worth the drive.

Anne Bieler, Sr. Associate, Packaging and Technology Integrated Solutions

Training staff and developing a better shopping experience are keys to growth and success in grocery. Low prices are important, but if I had to choose to forever shop in a low-price warehouse setting or a higher touch/more comfortable setting with prices at somewhat of a premium, I would choose the latter.

Of course, this is a personal opinion and there is a demographic that would put price at the top of their list, just as one would that wants healthier choices in the form of products that also exhibit sustainability. In other words, there is room for many formats, and there doesn't have to be one that is determined to be the winner.

In the Florida market, families have market-driven reasons to split their grocery basket among Costco, Walmart, Publix and Fresh Market. Depending on the basket being pursued, there is reason to rotate among these on a regular basis.

In every format, well-trained and knowledgeable staff can make the difference.

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Bill Hanifin, Managing Director, Hanifin Loyalty LLC

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