For independent grocers, it’s innovate or die
Your neighborhood grocery store is once again caught between a rock and a hard place. In this metaphor, the rock is ecommerce competition from Amazon and larger, more traditional retailers. The hard place is the spate of emboldened retail formats carving out a niche for themselves in the discount, fresh/organic and specialty ends of the industry, including the likes of Aldi, Sprouts and Wawa. All these challenges and more were discussed at the National Grocers Association’s Annual Conference this week in Las Vegas, where attendees heard a series of warnings and prospects for the next several years.
On the plus side, shoppers are very/extremely satisfied with their local supermarket, with more than 80 percent preferring their local store to an online alternative, according to a survey NGA released at the conference. Additionally, independent grocers are strongly associated with friendly employees, quality fresh foods and a convenient layout. Perhaps most heartening, more than two-thirds of food shoppers have no plans to switch from their independent store.
On the negative side, competitors in the physical and digital markets are devoting massive resources to meet the shopper’s every need, including integrating customer outreach for all channels and personalizing promotions. These companies are testing the limits of the data analytics they can conduct to optimize the offers made and the delivery systems deployed to fulfill them.
“There’s no doubt that the supermarket industry is rapidly changing, either because of the growth of e-commerce or the explosion of new formats, along with shifting consumer trends. However, independent grocers are nimble enough to quickly overcome obstacles and with strong ties to their communities, they know what consumers want and need,” Peter Larkin, president and CEO of NGA, reported at one of the keynotes.
Mr. Larkin and other speakers said a few of the key areas independents can at least partially “own” going forward are becoming primary sources for a healthier lifestyle, meal planning and local fresh foods. These retailers need to engage shoppers where they want to be engaged (increasingly, mobile) and how they want to be engaged (honest storytelling). Bottom line, any promotions or offers need to be customized so the shopper will trust the retailer.
- National Grocers Association, Nielsen and The Harris Poll Release New Findings from the 2018 National Grocery Shoppers Survey – National Grocers Association
DISCUSSION QUESTIONS: Where are the biggest opportunities for independent supermarket operators to improve their business results? What good examples have you seen from independent grocers successfully countering competition from online and big chain competition?