Meeting the Consumer at the Point of Sale

Shoppers' desire for convenient options at the front of the store, whether at Walmart, as pictured, or elsewhere, poses serious threat to goods at the back, such as refrigerated and frozen items

Grocers are experiencing a renaissance period as the retail industry adjusts to a changing market landscape. As brick-and-mortar stores acclimate to the rise in ecommerce, Walmart’s recent earnings demonstrate that investments in in-store technology are still worth the effort, if done correctly.

To keep up with the rise in grocery delivery services, apps and the “on-the-run” consumer, grocers must bring efficiency back into the store – creating in-and-out experiences in which brands meet the consumer at the points of sale. The following article explores the current state of the grocery industry, the priorities of the modern-day consumer and how grocery stores should be looking forward to adapt to the changing landscape.

Grocery: The Here and Now

Although the brick-and-mortar landscape is experiencing a period of rapid change brought about by the digital era, in-store experiences offer retailers the opportunity to guide consumers along their path to purchase. With this, retailers have the power to be a formidable force among large industry behemoths, including the likes of Amazon and Kroger. Most recently, Walmart’s earnings announcement demonstrated that in-store investments are important. As the largest grocer in the United States, with a 23 percent share of the market, Walmart’s grocery division’s performance last quarter was reportedly the best it has been in nine years.

Recently, Phononic commissioned a research report that found food and retail executives believe that in the next five years, supermarkets will become more of a community hub or social gathering place, alongside bars and restaurants. Stores can also build customer loyalty by offering free samples that enable consumers to test goods in real time before purchasing them.

With the power of human interaction on their side, grocers have the chance to stay afloat amid the growth of the web. The industry can’t remain stagnant and comfortable, however. Grocers must learn how to invest in the right atmosphere to advance the customer experience. With grocery’s current status in mind, it’s important to understand where the market needs to go from here, and how consumer preferences are shaping this transformation.

Grocers must learn how to invest in the right atmosphere to advance the customer experience.

The Changing Consumer: Convenience rules

The foundation of grocery’s evolution is the consumer. As society seeks efficiency across everyday life, today’s shopper is no different. Grocery delivery services continue to be on the rise, with even Walmart now offering this service. Grocery apps are growing: eMarketer research notes that “this year, 18 million U.S. adults will use a grocery app at least once a month, up 49.6 percent over last year.” With this in mind, it’s no surprise that consumers are traversing the store less frequently.

Those that are still heading in-store, though, are looking to make quick “micro-visits.” In fact, Phononic’s report also found that more than seven in 10 food retail executives believe that the grocery store layout is changing to accommodate micro-visits. This knowledge is leading to market evolution, with Amazon launching a grocery pickup service at select Whole Foods locations across the United States.

Grab-and-go items are key to keeping grocery alive, as consumers don’t want to spend hours shopping the aisles. This shopper desire for easy-to-make and easy-to-grab options at the front of the store is posing a serious threat to goods housed in the back – namely, refrigerated and frozen options. This threat can be minimized, however, if grocers shift their strategy and technology to match consumer interests and preferences.

By transforming the in-store layout, stores can ensure that the goods that consumers want are near key points of sale.

Looking Ahead: The Future of Grocery Expansion

It’s all about simplicity and efficiency. With micro-visits on the rise, retailers must mix up the in-store experience and bring a wide array of goods into the consumer view. In fact, according to Phononic’s “Store of the Future” consumer research conducted earlier this year, 89 percent of shoppers want to shop in a grocery store that understands how to make buying groceries an easier and/or more efficient experience.

According to a 2018 study by CPG marketing firm Acosta, 26 percent of total U.S. grocery shoppers, led by Millennials and households with children, are shopping in the frozen foods department more frequently than last year. We know what shoppers want: quick grab-and-go frozen options. To continue this growth, 53 percent of executives believe that in the next five years, frozen and refrigerated goods will move from the back of the store to multiple placements throughout the store. Ninety-two percent of consumers also say that it’s important that the layout of the store makes it easy to find things. By transforming the in-store layout, stores can ensure that the goods that consumers want are near key points of sale.

The continued growth and development of grocery stores starts and ends with the consumer. As large industry behemoths advance and bring new technologies to consumers, grocers must advance simultaneously – bringing efficiency back into the store. By embracing in-store innovation, grocers can ensure that they’re catering to the modern-day consumer. It’s critical for today’s grocers to keep a close eye to the current market and identify where they can surpass the competition, ultimately enabling them to thrive during this renaissance period.