The Case for Shopper-Centered Grocery

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The Case for Shopper-Centered Grocery

By Lori Zumwinkle - 03/15/2019
The Case for Shopper-Centered Grocery
An ever-widening menu of options and services is available to consumers

People will always need to eat, but grocers should never assume that their customers will keep coming back forever. Tastes are evolving, and people’s lives are changing; grocers that understand how, what and when consumers want to eat will be at a significant competitive advantage. Many grocers already know what their customers are buying – but do they know what those customers value?

Leading grocers recognize not only that every customer is unique, but also that their tastes and personal priorities are in flux. So, on some days, shoppers may have time to select fresh ingredients in store to prepare and cook from scratch. On other days, they may want a ready meal delivered to the door to feed the family in a hurry.

Grocers are experimenting with many different options and services, from pre-chopped foods to meal kits, from click-and-collect to home delivery. But while the number of channels and touchpoints will continue to increase, the challenge is to move on from the traditional perception of the grocer as a stockist of kitchen essentials. Tomorrow’s successful grocers will anticipate consumers’ needs so they can provide the right foods, in the right way, at the right time.

All you can eat at the data buffet

Data is the means by which grocers can harness game-changing insight into their customers’ desires. Grocers already track transaction data but, by adding a much richer information set from a broader data ecosystem – including purchase patterns, transaction history, lifestyle preferences and demographics – deeper understanding can be gained into spending and behavior patterns.

One example of a brand rethinking the use of customer data is Apricart, which gives consumers a personalized experience through its “smart shopping cart,” collecting their data in real time, providing them with customized offers and giving them inspiration. The insight generated through technologies like this is key for retailers to personalize the customer experience in a predictive way, introducing some vital innovation.

This might mean offering foods that are part of a customer’s doctor-prescribed diet or that will help them achieve their personal fitness goals. Alternatively, it might mean focusing on the latest trend: targeted recipes for customers with the Instapot, for example (the pressure cooker was one of Black Friday 2018’s top-five-selling items on Amazon).

Data should also improve the shopping experience, reducing the effort required of customers and increasing their enjoyment. Analytics tools can additionally provide a means by which to plan inventory, so customers can access the items they need in a single store, quickly locating them on the shelves – meantime freeing up space for new initiatives and experiences, such as cooking demonstrations or tasting kiosks.

Equally, data can help grocers understand where to work with third parties to enrich the customer experience. Tapping into an ecosystem of grocery partners – such as pharmacies, to help grocers deliver health-and-wellness solutions – while maintaining ownership of the customer relationship allows grocers to offer even greater value and personalization.

Kroger and Walgreens’ partnership “test” is a good example of this. Walgreens is aiming to provide its customers with a wider choice of grocery products by having an assortment of fresh and frozen foods, along with dry goods from Kroger.  Meanwhile, Kroger is able to provide its online customers with another location – Walgreens stores – to pick up their orders.

Data is the means by which grocers can harness game-changing insight into their customers’ desires.

The moment to modernize

Once grocers know their customers better, they can become part of their everyday lives. And yet, to deliver new products and services effectively, grocers also need to embrace transformation. It’s one thing to recognize what customers want, another to provide it at the right moment.

One challenge will be to modernize end-to-end operations so that it’s possible to capitalize on predictive insights secured from data. Digitizing the supply chain, for example, enables grocers to cut costs, reduce wastage and, above all, ensure that customers can get what they want quickly, while making it easier to change the offering overnight in line with evolving consumer trends.

Using technology to upgrade the workforce also yields dividends, as staff, from the store to the distribution center, can focus their efforts on differentiating the offering. Automation technologies are a good example of modernization in practice, in that they provide an opportunity to free up workers for higher-value, customer-facing work, or to generate savings that can be reinvested in an augmented customer experience. At the same time, analytics tools can help grocers identify skills gaps so that shortfalls can be closed or mitigated through third-party collaborations.

Table stakes in a shifting sector

Grocers that embrace some of the opportunities outlined in this article are in a powerful position to gain ground over competitors, including new digital entrants – that can compete on price yet can’t provide the shopping experience that consumers value – as well as longstanding rivals such as wholesalers and discount stores.

With better use of data to generate predictive insight, a willingness to use this insight to experiment with innovative customer offerings, and a fresh approach to the role that technology can play in supporting the workforce, grocers can build closer relationships with consumers than ever before – and secure a greater share of their sales.

About the Author

Lori Zumwinkle

Lori Zumwinkle

Lori Zumwinkle is a managing director and North America retail lead at global management consulting and professional services firm Read More