Do grocery stores have a customer engagement problem?

Discussion
Photo: Sprouts Farmers Market
Nov 13, 2018
Patricia Vekich Waldron

Consumers’ weekly grocery shopping trips have declined from 2.1 visits per week in 2006 to 1.6 in 2018, according to Statista. Shoppers now have tons of new formats and food solution options, from online same-day delivery, curbside pick-up and restaurant delivery to subscriptions and direct-to-consumer (DTC) offerings from CPGs. Consumers demand convenience and value as well as more variety, information on ingredients, and healthful, sustainable and ready-to-eat meal and snack options.

How can traditional grocery operators inspire shoppers, given that how they want to shop is becoming as important as what they buy? I believe operators would be smart to: 

Offer solutions (not just food)

I just attended the grand opening of a Sprouts Farmers Market in urban Philadelphia. The store was jam-packed with solutions to the “what to eat” dilemma that supported the company’s “healthy living for less” mantra. I was impressed (and you know I am a harsh judge) with the larger store format, which was assorted to engage customers. It was clear that considerable thought was given to everything, from curating stations by purpose to the clever sayings on its reusable shopping bags.

Make it easy (and fun)

Harness the power of technology to understand and engage customers, including data and analysis for customers, promotions and inventory optimization. Invest in educated, enthusiastic and available associates. Simplify layouts — especially the dreaded checkout — and guide shoppers to not only find what’s on their list, but to discover new items. Provide clear signage, fun messages like “Where You Bin All My Life” in the bulk area to inform, entice and amuse customers.

DISCUSSION QUESTIONS: What are the keys for grocers looking to increase customer engagement? What grocery operators do you think are best at engaging customers in stores?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"The key is for those retailers who are lagging to have the visionary courage to reimagine what grocery shopping could be and break free from what is has been for decades."
"The bottom line for retailers takes into account all revenue streams. So should strategies for customer engagement..."
"New physical store competition as well as online alternatives are diluting share of customer."

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25 Comments on "Do grocery stores have a customer engagement problem?"


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Dave Wendland
BrainTrust

Engaging customers at retail requires that operators move beyond product and price. The future is about experience, solutions, and differentiation. Grocers may wish to consider creating an environment to resemble an open air market, incorporating more community connections, and emphasizing convenience the way shoppers wish to interact. Grocery stores are not going away any time soon and I’ve seen remarkable examples of reinvented spaces … however there is much work to be done. What worked yesterday may not work tomorrow.

Ed Rosenbaum
BrainTrust

Let’s leave our friend Tony Orlando out of this because I do think he works hard at engaging with his customers. But the many chain grocery stores are quite the opposite. They engage on price and/or quality. That is not enough today. Our local Publix, for example changed managers about a year ago. The former manager knew his customers and spent time on the floor engaging with us. I have no idea who the new manager is or if he even walks the floor. The old regime trained the employees to be very customer-centric and friendly. The newer employees, since the change, are difficult to even get a “hello” from. Today’s world is changing. Using this as a microscopic example, not for the better. We need to remember it is the customer bringing his/her money in the store in exchange for more than just groceries.

Tony Orlando
BrainTrust

Thanks for the props Ed. I just started a new video blog, and so far so good. Working the floor a lot more, and engaging a lot more than even before. Things in my area are brutal, so I’m upping my game. Social media is quite important, and the in-store experience is even more so. I’ll keep you posted.

Jon Polin
BrainTrust

I agree that offering solutions, not just food, is a great way to drive engagement. Grocers are at the center of consumers’ health/nutrition journeys and can be a key navigator of these journeys if they think more about offering solutions, not just food. In many ways, grocers are most responsible for weakening their own customer engagement. After spending decades building those customer relationships, many top grocers are now handing those same customers to third parties such as Instacart and Shipt. While Instacart and Shipt have cool solutions for consumers, why are grocers cooperating in handing over their customers to these third parties?

Neil Saunders
BrainTrust
Let’s be frank, many mainstream American supermarkets have not moved on since the late 1970s and early 1980s. Their formats are dated, their stores are dingy, and their whole proposition is stuck in the past. There are notable exceptions — including Sprouts, Wegmans, and Publix — but many of the big players like Kroger and Albertsons have a lot of work to do. Price Chopper’s Market 32 concept is one of the best in terms of evolution. It has transformed a tired format into a really compelling and engaging space with a range of services, including restaurants and takeaway food. Sprouts is also good: new formats like the one near me in Gainey Village in Scottsdale are open and vibrant with lots of counters and a focus on meal solutions. Wegmans is excellent. They understand the theater around food and the range of counters and meal solutions is outstanding. The store is one big box of temptation. Additionally, Wegmans put enormous effort into making things taste delicious – which is a key objective that seems… Read more »
Ralph Jacobson
BrainTrust

Great points made, Patricia! This reminds me of the old adage, “Pile it high and watch it fly.” There are still a few store formats where this “strategy” can work, however the majority of today’s shoppers are looking beyond the product and are embracing the lifestyle that products can support. There are grocers that are successful in this kind of engagement and I think there is nothing but opportunity in the physical grocery store that has truly remained largely unchanged in over one hundred years. We still have dry grocery in the center store and perishables surrounding it. Let’s start with a clean sheet of paper and design the store of today.

Patricia Vekich Waldron
BrainTrust

Right on Ralph! Stores need to be designed to meet the needs of today’s shoppers!

Cathy Hotka
BrainTrust

Some of this will depend on the size of the store. A smaller store with fewer employees can foster strong relationships with customers. A larger store with more SKUs can create excitement around trying new dishes. Regardless of the tactics, customer engagement is a must, and companies that can’t find their own niche will find themselves irrelevant.

Patricia Vekich Waldron
BrainTrust

Great points, Cathy! There are many strategies to delight and retain customers – grocers just need to determine their value proposition …. and then execute flawlessly!

Anne Howe
BrainTrust

Many grocers believe “engagement” means having cashiers stand ready in front of registers to help people check out faster. That’s yesterday’s problem. Today’s problem is that cashiers, managers, and any employee with time is rolling a bin through the aisle packing bags for delivery and/or pickup. There are even fewer employees that will offer to help shoppers plan, find an item or even know the codes to ring up fresh produce.

In my market Earth Fare wins, Publix scores second, Harris Teeter third. Whole Foods and The Fresh Market, two that should win, have dropped to “don’t bother” in my book. I’m very close to switching to Aldi based on the selection of organics at much lower prices.

Patricia Vekich Waldron
BrainTrust

It’s interesting how the best operators can be large or small(er) chains. Size doesn’t necessarily matter.

Jeff Hall
BrainTrust
Given the intense competition coming from Amazon and meal subscription services, it really is puzzling as to why most grocery retailers are not more focused on the in-store experience. Failing to adopt an experiential mindset for engaging with in-store customers will continue to put many grocery brands at risk. Patricia’s ideas are a solid foundational roadmap of where to start, and there are a handful of super-regional brands executing with a high degree of success around these concepts: Hy-Vee in the Midwest, Harris Teeter in the Southeast/Mid-Atlantic, Lucky’s and Publix as well. Each curates inspiring in-store departments that support shoppers in discovering new products, staffed by friendly, enthusiastic associates. Focusing on a holistic approach to healthy living and fresh, organic and, when possible, locally-sourced items drives sales and engagement as well. The grocery sector has immense opportunity for consumer engagement, even at 1.6 store visits weekly. The key is for those retailers who are lagging to have the visionary courage to reimagine what grocery shopping could be and break free from what is has been… Read more »
Patricia Vekich Waldron
BrainTrust

Great points, Jeff! Grocers don’t seem to realize their potential good fortune as food is not an optional purchase. The lack of vision and differentiation is surprising.

Susan O'Neal
BrainTrust
1 month 5 days ago
A year ago I, on this panel, I warned that while traditional retailers were competing for “trips,” Amazon was competing at the level of item-specific demand, picking items off the traditional grocery store list one by one. Grocers’ over-focus on trip frequency, I warned, was leading to a false sense of security. Share of requirements is really the only metric that matters, and if you can’t measure it against an accurate “total spend” then just watching the overall spend of your customers will give you a clue. If your weekly spend with a customer is staying the same or increasing, at least you know you’re not likely to be losing share to a competitor. So with this in mind — I have some questions about the study — hoping someone on the panel has the answers? The study specifically references “trips” — are those exclusively in-store trips or do they also count curbside pick up and delivery orders? What is concurrently happening to weekly spend — is it declining proportionally as well? Assuming weekly spend… Read more »
Ray Riley
BrainTrust

Is this any different than the position many retailers in adjacent categories found themselves in roughly 2010? Multi-channel shopping behavior that ultimately resulted in a reduction in physical foot traffic? There are limits to the degree of service grocery retail (at 1.6 visits per week versus .25 for specialty) can offer, but from living in four states the past six years, Mariano’s is head and shoulders above anything I’ve witnessed.

Richard J. George, Ph.D.
BrainTrust
For the most part a visit to a traditional food retailer is boring and is often considered a chore. Retailers need to bring excitement to their stores, not simply on the perimeter, but by rethinking and re-positioning their center store offerings. Focus on making it fun to shop. In-store demonstrations, health checks, nutritional guidance, etc. give the store a treasure hunt effect. Don’t forget the parking lot. How about inviting local dog groomers and veterinarians to be available on a designated area outside of the store? Or invite the local high school marching band to practice one day a week in the parking lot, followed by a beverage and bakery snack from your delicious in-store bakery. Checkout needs to addressed. We know that the longer we can keep people in the store (by making the experience fun, exciting and engaging) the more they spend. We also know the quicker we get them out of the store, the quicker they come back. Best-in-class for engaging customers in stores are: Wegmans, Publix, Hy-Vee and Trader Joe’s.
Ryan Mathews
BrainTrust
Here’s a hard truth: times and lifestyles change — way before retail institutions. I am now at the age that I don’t want to brag about how long I’ve seen this coming, but decades ago I wrote that the supermarket was desperately holding out waiting for 1973 to come home … and it wasn’t going to happen. My point is that this is not a new problem. Supermarkets — with the notable exceptions of operators such as Wegmans, H.E.B., Trader Joe’s and many, many more that have evolved — are still stuck with a fundamentally outdated model, i.e., one-stop shopping for families eating together and pantry loading. Now, you can keep trying to build engagement with this model, or you can acknowledge — 30 or 40 years too late — that things have changed. The retail graveyard is littered with schemes designed to offset the ravages of change. Those RetailWirers who are old enough may remember the, “home meal replacement” movement, sort of the forerunner of today’s supermarket meal kit, an idea that, having once… Read more »
Mark Heckman
BrainTrust

As we all are aware, the role of traditional supermarkets is rapidly changing. No longer are they the recipient of a dominant percentage of their customer’s overall food at home dollars. New physical store competition as well as online alternatives are diluting share of customer. To mitigate this erosion, physical store retailers should neither avoid technology nor heavily rely on it to change and protect their market share. I believe three areas of change are critical. First, a good mix of technology which actually accelerates the shopping trip will serve to preserve relevance to the time-starved shopper. Secondly, turning store associates into “food experts” is another key weapon in the brick-and-mortar retailer’s arsenal that price formats and online venues cannot match. Lastly, offer BOTH in-store and online shopping alternatives and, in doing so, work to consolidate those efforts so that the customer gets the sense that they recognize you no matter which shopping channel you chose on a particular trip.

Patricia Vekich Waldron
BrainTrust

Interesting discussion! It’s good to hear that there are some operators who have developed a compelling vision and are bringing it to life in stores. The BrainTrust faves are regional chains including perennial winners like Publix, Wegmans as well as Hy-Vee, Earth Fare, AJs, Mariano’s.

Wondering if Whole Foods will be able to sustain their position for strategy and executive given their focus on Amazon fulfillment ….

As for me, I love my local Ralphs in downtown San Diego and walk over there nearly every day when I’m in town – love that I know the produce and meat team and many of the cashiers. I also shop Spouts and Trader Joes

Shep Hyken
BrainTrust

Traditional retail — at all levels, not just grocery — has changed. Different grocery retail channels; online, BOPIS, subscription, etc., are disrupting traditional grocery retailers. But it’s more than that. Consumer habits are changing as well. All that needs to be taken into consideration. No doubt an engaging experience that benefits the consumer willing to walk through the doors of the store will help bring the customer back. That said, all customers like and want convenience, so there will be a balance that must be considered.

And with all of the concern about consumers going to stores less than they used to, it amazes me how Whole Foods has continuous lines at check-out. Not that they are long, but seldom do you walk up to an open checkout lane. Other stores that do well are local retailers who know their market/community.

Joan Treistman
BrainTrust

Why does it just have to be “in stores”? Why isn’t the question about overall engagement, i.e. satisfying grocery needs through all channels? The bottom line for retailers takes into account all revenue streams. So, should strategies for customer engagement; keeping shoppers involved in the store and being the go-to website when online purchases are to be made. The tactics are different in each channel, but that’s the retail world of today.

A combination of experience without sacrificing convenience is the goal in the store. A combination of easy website navigation without sacrificing value and quick delivery makes for happy shopping on line.

In that case, customers may develop a habit of going to that grocer’s store and website on a regular basis.

Ricardo Belmar
BrainTrust
There is more to engagement than meets the eye! Let’s face it — for most consumers, grocery shopping is a “must-do”, not a “want-to-do” process. The experience shopping at the majority of supermarkets in the U.S. hasn’t changed that much in decades. Convenience has taken over in the minds of most consumers as the desired objective for grocery shopping. That means fewer visits per week, but each visit demands a better experience to be fruitful. Most brands are not succeeding at this just yet and there is plenty of room for improvement. Apart from the convenience factors we’ve discussed in this forum before (particularly around pickup and delivery options), how much progress have grocers made around giving shoppers complete ideas on what to make for dinner that night? We always hear about delivering recipes and shopping lists via email, but which brands have implemented this in a seamless manner such that shoppers can really take advantage and go to the store to buy just the ingredients they need to make a quick delicious dinner? Wegmans… Read more »
Liz Adamson
BrainTrust

Most grocery retailers have not changed in decades, focusing on price, selection, and/or quality as their only differentiators, until many are not differentiated at all. In the era of Amazon, food delivery clubs, online groceries and more, to bring traffic back into their stores, grocers need to focus on the experience.

I recently visited my local grocery store to find that they were hosting a dinner prep class. There were tables of food, condiments, and zip top baggies. A facilitator was helping people assemble meals that could be frozen and cooked quickly at a later date. I’m sure there was a fee to join the class, but what a great value add in an era when many are too busy or too tired after a long day at work to put together a dinner. Creating experiences like this or other opportunities that bring more value to the customer will be what sets grocers apart, engage their customers and increase traffic.

Steve Montgomery
BrainTrust

Customers don’t want products; they want solutions. Traditional grocery stores have always been about item/price. The meal solution was up to the customer to determine. Today there is the added success elements of engagement and healthy.

The question for retailers is how much engagement they want, and it varies significantly by customer. I like to go in, get what we need and get out. I am not looking for engagement. However, others I talk to and see shopping not only enjoy engagement, they expect it.

Other need to learn more about how to prepare healthier meals and are seeking guidance from various sources including their grocery store. Some store are prepared to offer assistance and others are not. Customers expectations have and will continue to change. Determining how to meet these changes will determine the winners and losers in the grocery industry.

Herb Sorensen
BrainTrust
You mean grocery stores are supposed to engage with the customers? Not that no one might ever. But supermarkets are run by merchant warehousemen who build massive buildings, put many tens of thousands of items in them, and have a hard time keeping up with the management of that when shoppers keep removing stuff from the shelves. Does no one understand what self service means? Sell yourself, which revolutionized retail 100 years ago, was when the retailer mantra became, “Pile it high, and let it fly.” Meanwhile, that crowd of gnarly suppliers is more than enough to keep management busy. Not that the retailer wants any of them to get too far ahead of their competition. Better to have several very successful suppliers than one dominant performer. The result is what I call “brand-on-brand mayhem” in the aisle. Of course, it is all polite, on the surface, with raging forces kept out of sight. I used to be shocked by the lack of understanding in the industry. Not any more. But the real winners are… Read more »
wpDiscuz
Braintrust
"The key is for those retailers who are lagging to have the visionary courage to reimagine what grocery shopping could be and break free from what is has been for decades."
"The bottom line for retailers takes into account all revenue streams. So should strategies for customer engagement..."
"New physical store competition as well as online alternatives are diluting share of customer."

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