Amazon, Dollar General, Publix and so many other food retailers are focused on opening hundreds of physical stores this year.
OPINION: EDITOR'S NOTE
In March, Adobe released data showing just how transformative the pandemic has been for the grocery industry.
As a result of the COVID-19 crisis, many consumers have switched to shopping online for groceries, which now make up 8.9% of the e-commerce market overall (up from 6.3% in 2019). Recently, the U.S. online grocery market generated $8.7 billion in sales during February, a gain of 8.5% compared with the same period a year ago, according to the latest Brick Meets Click/Mercatus Grocery Shopping Survey.
Yet, despite all of this e-commerce growth, nearly nine in 10 household shoppers still do most or all of their grocery cart filling in person, according to another survey, this time from Advantage Sales.
The reality is that physical stores still really matter, including to me. In fact, the store matters so much that it’s my deciding factor on where to live.
A few months ago, I came to the conclusion that I have outgrown my current address and need to find a new home with better office space (I work from home). So I have spent some time looking at homes in my city and also out in the suburbs. I visited one subdivision called Lake View and fell in love with the new homes being built there — homes not too big and not too small, with offices pre-wired for high-speed internet (important when you’re hosting virtual events for America’s leading grocery publication!).
But when I drove around the Lake View area looking for the nearest grocery store, there were none. In fact, I couldn’t find a food retailer within 10 miles of the development. And my favorite grocery store was at least 25 miles away. I immediately took Lake View off my list of potential places to live.
Keep Them Close
I like roaming the aisles of the grocery store, and picking out the perfect set of avocados, ones that will ripen on different days. There are lots of Americans like me who still want to shop in person, no matter how good your app is or how fast your delivery is.
When Advantage Sales released its “What Brick-and-Mortar Grocery Shoppers Really Want” report in January, it found that grocery shoppers want their brick-and-mortar grocery store to be clean, offer everyday low prices, stock a wide variety of products, have an excellent produce department, provide pharmacy and health services, and be located close to their home. This is why Amazon, Dollar General, Publix and so many other food retailers are focused on opening hundreds of physical stores this year. Amazon specifically is going to open a bunch of physical grocery stores in suburban areas as consumers spend less time in the office and more time working from home.
I know that a lot of food retailers are laser focused on technology and e-commerce these days (and they should be), but the physical store shouldn’t be taking a backseat to digital. The pandemic has blurred the lines of where people live; many Americans now work from home, from anywhere. People are moving to suburbs and far-off places that are cheaper. At the same time, Millennials are the biggest generation, and they’re entering the home-buying age. Are we building enough grocery stores, with enticing omnichannel designs, for the demand that we’ll have in five, 10 or 20 years?
Whether due to the easing of the pandemic, nostalgia, cost or new working habits, shoppers are flocking back to stores. Will the industry be ready?