The Digital Future of Retail Foods
The retail food industry needs to adapt to the new needs, media choices and consumption patterns of today’s consumer, who now has the means to proceed through their entire purchase journey using digital or mobile means.
A recent article in AdAge by Kristopher Kubicki of Dynamite Data, an e-commerce data repository, notes modern U.S. grocers have traditionally refused to embrace the Internet wholeheartedly. Most grocery store websites are still reminiscent of “brochure-ware” from a decade ago and are primarily focused on branding and general information. Brochure-ware is no longer adequate to connect and engage the digital consumer.
These days, consumers consult product information and resources via multiple digital devices and media channels, searching for products and solutions, interacting with brands and brand advertising across a variety of digital and traditional channels, especially on mobile. A recent report by mobile ad company InMobi revealed that Americans now spend an average of 144 minutes per day on their mobile device. Because consumers are continuously moving through multiple media experiences, retail grocery chains need to elevate their digital marketing tactics and develop strategic partnerships with leading brands that reflect the non-linear buying journey of today’s digital customer. Food retailers need to embrace this omni-channel consumer experience or be rendered obsolete.
The New Consumer
In 2012, Booz & Co reported that 52 percent of U.S. consumers are already using technology in their grocery shopping experience with 31 percent using their mobile while grocery shopping. In a study examining how moms feel about mobile advertising, Instant.ly reported that 62 percent of moms say their purchased have been influenced by mobile advertising and 42 percent recall a mobile ad helping them save money. With such a keen awareness of the power of their mobile device, consumers are developing strong relationships with brands that serve their needs at the time and place where they are searching for something.
When examining how the digital consumer is using their online access in relation to their shopping choices, the results are mixed. While the majority of online shoppers are seeking discounts, coupons or increased value with relation to their grocery cart, other groups are willing to spend more on a premium product if it serves their needs. For example, 57 percent of moms admitted to rewarding retail brands that made their lives easier, willing to pay for individually packaged items that fit easily in their children’s lunchbox. When creating a digital strategy for your store or product, as with any marketing strategy, it is critical to understand your customer. Once you know who they are and what they value you can partner with like-minded companies to create an effective digital strategy.
Smart Partnerships & Smart Designs
The in-store and online grocery experience cannot be mastered without a harmonious blend of digital support from grocers and food manufacturers. The grocers of today -- and tomorrow -- need to make available their full spectrum of product offerings via a robust online marketplace. Beyond product catalogues, retailers will need to understand what their target audience values and partner with food manufacturers who can help deliver yet another layer of education, entertainment and opportunity for the digital customer.
As an example, consider the value of QR codes - the square, two-dimensional bar codes that shoppers can scan with their smartphones to access a web experience. QR codes can be used by grocer and manufacturer alike to draw in-store consumers into deeper relationships.
According to a PRS study covered by Progressive Grocer, 94 percent of shoppers recognize what QR codes are and 44 percent of those using their smartphones while shopping have scanned them. What’s the applicability of QR codes for retailers beyond coupons and specials? Imagine a busy mom scanning a QR code on a bag of kids’ snacks. Upon scanning, she is presented with a fun, educational video to entertain her child, giving the mother a moment’s peace.
Now, imagine that at the end of the video the mom could enter her email address for a dollar off coupon for that very same product? Or, what if a QR code at the front of the store offered a link to a recipe that featured the strawberries during the weeks that they are perfectly in-season? What if the experience was paired with an in-store sampling?
As mobile use increases for in-store experiences, so does the opportunity for retailer innovation that can help drive sales, loyalty and repeat visits.
Food product manufacturers and retailers who maintain a unique angle – gluten-free, organic, low fat, low sodium, sustainable, family-friendly, dining-on-a-budget, etc. – have the opportunity to deepen relationships with consumers by developing free, engaging content that offers information beyond products and connects to the lifestyle of the consumers they are targeting. A great example of a retailer who gets this new mantra is Whole Foods, whose Whole Story blog offers recipes, nutritional advice, resources on healthy eating, gardening tips, online ordering and more.
On the manufacturer side, Quaker Oats connects with their audience by offering product information, recipes, health tips, and family nutrition advice. Whole Foods and Quaker Oats are not directly pushing their sales message. Instead, smart, digitally-savvy companies understand they need to connect with their target audience beyond the sale to build trusting relationships that result in continued purchases and advocacy over time.
By developing well-balanced strategy for in-store promotions, traditional media outreach and online content, retailers and manufacturers are now able to create the interactive, omni-channel experience the modern-day consumer has come to expect. Doing so empowers them to meet their customer at the right time and place, with the right content - a critical component in driving brand loyalty and increased sales in the digital age.