When a retailer is struggling to generate real “same store” sales increases, what should they do? The obvious answer is to operate the stores better and improve the shopping experience, but is that enough to respond to new competition?
Just who is the competition?
Online grocery gets a lot of attention today — some are excited about it and others are not. “I don’t know a grocer who’s selling much online, and if they are, they’re losing money,” a senior grocery executive said to me recently. “I’m not going to spend anything now on it.” It’s an understandable perspective — and pretty broadly held — but I challenge this dismissal.
Online sales may not be very visible yet, but they are very real. Four percent of grocery spending takes place online today according to Brick Meets Click research. Look closer, and you find that online spending isn’t just taking sales away from supermarkets; it’s also taking sales away from specialty stores and farmers’ markets. Often, those dollars are spent on products that “were not available or at least pretty hard to get.” Understanding this changes the way you “read the competition.”
Change with shoppers
A decade or two back, when alternative formats started attracting sales that used to go to supermarkets, we learned something important. We learned that we had to look shoppers — not just the competition — if we wanted to understand what was happening and how to respond effectively. Today, everyone can see that smartphones and digital technology are changing the way we live. So doesn’t a retailer need to build digital connections with their customers, even if online shopping isn’t an immediate priority?
What are your customers looking for to make grocery shopping better and easier? How much are they spending online and for what? Are you connecting with them the new-fashioned way, digitally?
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