COVID-19 has put grocers and CPG brands through some changes

Discussion
Photo: @przemekklos via Twenty20
Sep 29, 2021

Retailers of food and grocery products struggled to meet consumer demand for delivery, buy online and pickup in store (BOPIS) and other options last year as the novel coronavirus pandemic hit.

Consumer packaged goods (CPG) companies at the same time were switching their marketing focus to channels that would make it easier for consumers to buy their products.

At a session during last week’s Groceryshop in Las Vegas, executives from Rite Aid and Frito-Lay stressed that a new kind of retail is being born out of this chaos, one that features digital marketing assets, differentiated assortments, operations that remove in-store friction and re-worked services.

Andre Persaud, Rite Aid EVP & chief retail officer, said the drugstore retailer is now using modern digital assets to focus on the consumer. This includes differentiated beauty merchandising that features clean products; pharmacists out on the store floor talking with shoppers and a revamped bright and airy shopping experience.

The retailer is targeting 25 – 49-year-old consumers who are caring for their children, parents and pets. In creating a new in-store experience, Mr. Persaud said the chain is empowering store managers to lead an omnichannel effort that creates the type of demand for front-of-store items in line with each location’s pharmacy sales.

“Rite Aid wants to be a whole health pharmacy addressing issues in areas like diet, hygiene and home testing,” he said.

Mike Del Pozzo, SVP of sales and chief customer officer at Frito-Lay North America, said PepsiCo is also overhauling its approach to omnichannel, focusing on collaboration and innovation. Every campaign starts with a strategic deep dive with retailers that calls on digital media tactics to spur omnichannel growth. Those tactics are measured for return on investment, supported by advanced analytics, to determine campaign repeats, drops and repairs.

Both Mr. Persaud and Mr. Del Pozzo agreed that grocery companies have to up their omnichannel game or risk irrelevance in the near-term future. Focusing on what the consumer wants next, where and whenever they want it, is the only way to thrive.

DISCUSSION QUESTIONS: How can retailers and their trading partners best reduce friction through all channels while simultaneously increasing value to shoppers? What omnichannel marketing tactics do you expect to see employed most over the next year?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"The use of AI to really understand customer demand and their preferences will certainly help retailers and CPG suppliers to work collaboratively to deliver a better offering."
"Reorienting around omnichannel is definitely the way to go for grocery and CPG – categories where you won’t need or desire in-store trial."
"Retailers and their trading partners need to work together to provide more consistent product information across all of these touchpoints."

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9 Comments on "COVID-19 has put grocers and CPG brands through some changes"


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Neil Saunders
BrainTrust

Rite Aid has been proactive in refreshing its stores. Those that have been updated are far nicer places to shop than traditional pharmacies – lighter, brighter, better showcasing of brands, and easier to interact with staff. In a world where so much can be done digitally, these are exactly the type of thing stores need to be promoting. At a product level, the focus on wellness is not misplaced: the pandemic created a surge in demand for products related to heath and well-being and this shows no signs of slowing down.

Michael Terpkosh
BrainTrust

Retailers and their trading partners must work closer together to use shoppers insights, digital assets, and compliment each others in their efforts to translate consumers into shoppers. Regardless of the channel, reducing friction (meaning reducing inefficiencies and mistrust) is critical for success. The pandemic has changed many ways of conducting business, but in the end one goal remains true, understanding what consumers want and how to meet their wants.

Melissa Minkow
BrainTrust

Reorienting around omnichannel is definitely the way to go for grocery and CPG – categories where you won’t need or desire in-store trial. I also appreciate the emphasis on home-testing. COVID-19 isn’t going away anytime soon, so emphasizing that part of their assortment will be differentiating for Rite Aid.

Andrew Blatherwick
BrainTrust

The use of AI to really understand customer demand and their preferences will certainly help retailers and CPG suppliers to work collaboratively to deliver a better offering. We already know that Millennials are less interested in pure price and more interested in added value services, but that is only one sector of consumers. What we need to understand is what drives each sector and even each individual so that we can service their particular needs perfectly.

Now, in a retail environment where we have large national chains and self-service, we are not able to talk to every customer, know them personally and their family, but with AI we can understand their purchasing behavior and work out what is likely to be important to them. We can then reward them accordingly. But let’s not run away with the idea that price will not remain as one of the main triggers. Also promotions will remain an important part of the mix. People like to think they are getting a bargain, it is human nature.

Gary Sankary
BrainTrust

Retailers have a reputation for being slow to adopt new technology.
The pandemic has finally pushed the industry to widely adopt the omnichannel strategies that they’ve been talking about for years. This isn’t “new” by any means, it’s implementing strategies that have been available for a long time. What is new, and good, is that companies are really getting serious about customer engagement and delivering consistent experiences across channels. That’s what will “win” in retail.

David Spear
BrainTrust

There is no doubt that new ways of working and business models are emerging. Just look at any statistics lately. Moreover, what’s foundational for a more frictionless environment in which retailers and CPGs operate is a maniacal focus on the use of advanced data and analytics. Look at some of the retailers who pivoted hard during the pandemic to offer better digital experiences, both online and in-app. They won big. CPGs who pivoted to “healthier for you” products won as well. New insights – brought about via data and analytics – were the cause for many of these changes. Rite Aid is spot-on with their focus on whole health pharmacy, but they’re not alone. Most other grocers who have large Rx businesses and clinics are eager to figure out how to curate better experiences for shoppers at both front and back of store, leveraging the digital touchpoint as well as the physical in-store presence.

Brian Cluster
BrainTrust

Retailers and their trading partners need to work together to provide more consistent product information across all of these touchpoints. Consumers are demanding more information and want transparency about the product origins as well as all of the ingredients and side effects so they can make more informed decisions.

Going forward, I look to see that both retailers and manufacturers use more advanced analytics to provide more intelligent recommendations based on sound data for promotions as well as relevant products that will fit their needs. CPGs will be testing and learning from the new retail media programs and digital promotions that have recently been expanded or launched in the last year.

Gib Bassett
BrainTrust

As Ron writes to start, there as a struggle “to meet consumer demand for delivery, buy online and pickup in store (BOPIS) and other options last year as the novel coronavirus pandemic hit.” Fixing that, even incrementally, in line with investments aimed at omni-channel marketing and promotional improvement, is arguably the only way to reduce the ultimate friction that’s going to hurt many companies in the coming months: product availability. It’s about time that retail and cpg look much more closely at embracing a CX that proactively and pre-emptively considers the capacity to serve consumer demand requirements at every step of their journey.

Rachelle King
BrainTrust

Omnichannel is certainly where to focus for grocery and CPG. More and more, retailers can show that omnichannel shoppers are their most valuable shoppers. Collaborating to remove friction and provide relevant product solutions at fair prices is one of the best things that retailers and CPG can do right now.

wpDiscuz
Braintrust
"The use of AI to really understand customer demand and their preferences will certainly help retailers and CPG suppliers to work collaboratively to deliver a better offering."
"Reorienting around omnichannel is definitely the way to go for grocery and CPG – categories where you won’t need or desire in-store trial."
"Retailers and their trading partners need to work together to provide more consistent product information across all of these touchpoints."

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