New McKinsey & Co. research shows that four out of 10 Americans believe that their finances won’t return to normal until the latter half of 2021 or 2022 and beyond. Only about 24% of Americans feel safe engaging in “normal” out-of-home activities. Consumers have also adopted many in-home alternatives, and many of these activities, such as online streaming and cooking regularly, are expected to stick post-COVID-19, according to New York-based McKinsey. These huge societal and cultural shifts — working out at home, cooking at home, working from home, celebrating holidays at home — are expected to become permanent as consumers realize the convenience and financial benefits of not commuting.
In addition, the American consumer is on a home-sprucing spree. More than 76% of homeowners in the United States have carried out at least one home improvement project since the start of the pandemic, according to a survey by Seattle-based home improvement website Porch. Additionally, 78% said they plan to undertake at least one home improvement project in the next 12 months. Finally, 61% of homeowners said that gardening or patio work was part of the project. Food retailers should be looking to leverage the opportunities in shoppers shifting much of their spend to home projects and home-based activities.
5.Permanently Enhanced Sanitation
Early on, most grocery retailers moved quickly to implement enhanced sanitation protocols to keep employees and shoppers safe. Nell Alverson, director of channel marketing at Greenville, S.C.-based technology solutions firm ScanSource, says that grocers should be looking at self-checkout, and if they already have it, they need to increase the number of stations.
“It’s important to accommodate the store layout to allow for the use of self-checkout and self-service kiosks, especially in areas like the deli and bakery where consumers now expect a much more contactless, self-service experience,” Alverson notes. “This is an expectation we will see for quite some time — if not permanently — and retailers and grocers alike need to adapt to stay competitive.”
Designing the grocery store of the future might also entail social-distancing best practices such as wider aisles, wider shelves and physical barriers, as well as hand-washing stations, heavy-duty air filtration and other measures.
Finally, the use of mobile entry or payment devices — Amazon One’s palm recognition innovation is one example — to decrease touchpoints or face time with employees is the future, so retailers should plan ahead now.
6.The New Workforce
A year since the beginning of the pandemic, one of the biggest challenges retailers face is anticipating the employment and staffing needs of an omnichannel business model, according to Will Eadie, chief revenue officer at Montreal-based WorkJam, a digital workplace platform.
“Organizations must create a direct line of communication from the head office to front-line workers if they want to react quickly to change,” Eadie says. “Continual communication, on-demand resources and real-time mobile training are no longer nice-to-haves; they are fundamental to protecting margins.”
Fortunately, technology has caught up to the demands of the workplace, according to Eadie.
“Digital workplace technology enables organizations to communicate with their workforce in an instant — targeting employees by role, geo-location and a number of other identifiers,” he notes. “If we’ve learned anything, it’s that businesses must know how to prepare for black-swan events of the future. They must build a foundation to mitigate the critical impact on the business by keeping close tabs on operations, communication, staffing and compliance.”
In five to 10 years, retailers may see the need to train staff on augmented-reality/virtual-reality shopping experiences and automated curbside pickup. Other workforce challenges may include refocusing the workforce on complementary tasks to automation, having the accurate driver capacity for delivery and training employees on customer service in a virtual environment.
As a result, retailers should turn to new technologies to quickly and efficiently train new and existing front-line associates to deliver exceptional customer experiences under these new business models, Eadie advises.
7.Grocery Infrastructure of Tomorrow
Before COVID, when consumers picked which food retailer to shop, that choice used to be centered on work hubs and transit routes, but the pandemic has pushed grocery spend out of busy city centers to residential areas, according to NielsenIQ data.
“This seemingly small shift has tilted the retail landscape,” Rawlinon asserts. “Today, some of the world’s highest-revenue grocery store chains are experiencing significant changes in demand across their network.”
This means that retailers need to consider taking permanent action to prioritize or rebuild retail infrastructure in areas that will matter most to the remote-working consumer of tomorrow.
In addition, American consumers aren’t just prioritizing new neighborhoods when they shop, Rawlinson points out.
“Store-level sales trends indicate that consumers may be prioritizing their local food stores to fulfill a wider assortment of needs,” he says. “Across U.S. cities analyzed, we see food channel sales driving growth to local stores. In postal neighborhoods that are experiencing overall sale declines, consumers have relied less exclusively on grocery stores to meet their shopping needs.”
It’s clear that many of these “temporary” shifts in food retailing are here for the long haul. As the second year of the COVID-19 era continues to challenge grocery retailers, the companies that put innovation and customer service first will achieve long-term growth and success in a post-pandemic world.