The experience of grocery shopping is still a bit of a mystery for many folks, which most assuredly makes the life’s work of our core supermarket buyer/seller audience all the more significant when pausing to ponder the cutthroat climate that distinctly defines food retailing today.
To be sure, the days of “everything to everybody” retailing are gone, concurs Blaine Becker, senior director, marketing & business relations for Bellevue, Wash.-based The Hartman Group. “No food retailer wants to be caught in the middle,” he continues, “because there’s a very real possibility of being nobody at all.”
No argument here.
With this the case, Becker called to our attention some right-on-time Hartman Group insights that breakdown five realities and five fantasies of retailing that can potentially further inspire new thinking for food merchants in the 21st century.
1. Relevancy Gap. Today’s retail landscape is the epitome of complexity, congestion and consolidation. A gap has opened up between what consumers expect food retailers to sell and what they desire them to sell.
2. Third Grocery Sector. Long before the recession, savvy consumers were already figuring out that the best prepared foods departments in their local area offered a better value than takeout restaurant food. The opportunity space for food retailing is in fresh, packaged foods, or what Hartman terms, “The Third Grocery Sector.”
3. Food, Food Everywhere. Who isn’t selling food these days? Shopping is no longer just about restocking the pantry and refrigerator. The reasons for shopping have transitioned away from "What are we out of?" and moved to "What should we eat?" Food is no longer the private domain of the neighborhood grocery store.
4. “Good Enough” Is Not Good Enough. Most shopping experiences end with less-than-satisfying results, meaning that the purchase decision has been arrived at because it is “good enough” rather than “optimal.” It’s often invoked when a shopper grows tired of trying to make a decision.
5. Redefinition of Value. Consumers continue to be driven by a cultural imperative to economize (private label purchases, coupon-clipping, daily deals, etc.), but are equally driven by the ongoing shift toward a redefinition of value that privileges quality and experience over price (per quantity). Fighting for shoppers’ dollars primarily on promotions and deep discounts offered on commoditized brands in the food wars is a zero-sum game few can win.
1. Shopping Behavior Is About Fulfilling Fixed Needs. “Eating occasions” drive shopping behavior. Products and brands are tools to complete occasion-specific tasks, not drivers of shopping experience. Consumers orient themselves toward food based on the cultural nature of the occasion. They make food quality choices driven by food culture, not by absolute preferences.
2. Brand Loyalty Drives Shopping Behavior. Most consumers orient themselves to shopping based on “how do I get what I need?” and “where should I shop for it?” Brand loyalty falls to the wayside for the sake of “getting things done.” Consumers begin almost all shopping occasions long before they get in the car. And thinking about brands is almost never the first thing that happens.
3. Retail Environments Are Sacred Spaces for Brand Loyalty. Retail is not the site for brand building for traditional CPG brands. For these established brands, loyalty is formed mainly in the household or through a heritage of familiarity with the brand. Many food retailers have recognized the value of investing in private brands as a way to enhance the retail experience.
4. Behavioral Scripts Drive Shopping Behavior. Consumers do not shop based on innate characteristics nor on “ways of doing” that are learned from parents or peers. Because food, drug, mass and dollar retail shopping is less about identity cues, behavioral scripts take a backseat to “cultural eating occasions.”
5. Shopping Behavior Varies by Category. The single most salient cultural distinction currently driving consumer behavior in grocery and drug – a distinction that affects every retail channel – is the distinction between “packaged” and “fresh.”
That’s a great point of departure for now, and until next time, we wish you a pleasant and prosperous summer selling season!
Be sure to keep us posted on what you're doing to stay Ahead of What's Next with food shoppers via our Facebook page. You can also download the full version of The Hartman Group’s 5 Fantasies/5 Realities report here.