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Grocery retailers should look to in-store promotions and local products to drive consumers back into physical storefronts, notes Patrick Spear of GMDC | Retail Tomorrow.

Retailers need to solve the new shopper behavior equation

It’s time for the industry to be bold, take action and define a new pathway for successful results, says Patrick Spear of GMDC | Retail Tomorrow

Patrick Spear is the president & CEO of GMDC | Retail Tomorrow and a contributor to Supermarket News. Spear joined GMDC | Retail Tomorrow in 2014 after nearly two decades of involvement with the association as a supplier member during his tenure with multiple CPG manufacturers including BIC, Newell Rubbermaid, Mapa Spontex, Identity Group, and Mammoth Office Products. 


Patrick Spear GMDC president.jpeg

Consumer confidence and purchasing behavior regained momentum throughout the summer months as businesses began opening their doors and vaccinations became more prevalent. While Americans are now eager to spend, many retailers are not prepared to capture the pent-up demand. Faced with labor shortages, adjusted shopping behaviors from 2020 and a renewed sense of what makes a great in-store customer experience, retailers are encountering a new shopper equation they must learn how to solve.

There are five core components of this equation, and the retail industry is ripe for opportunity, but only if it strikes the balance between them:

1. Adapt to newly evolved shopper expectations, yet maintain impulse sales

2. Deliver omni-choice options

3. Provide unmatched experience and convenience

4. Ensure a frictionless checkout

5. Harness loyalty through personalization 

Retail is an industry that tends to be risk averse, but now it’s time for the industry to be bold, take action and define a new pathway for successful results. If we’ve learned anything in the past six months, we now know the “new normal” is anything but, and it’s time for a new narrative.

Adapting as the Labor Shortage Recovers

By the beginning of the second quarter of 2021, the Department of Labor reported 965,000 open jobs in the retail sector. As retailers grapple with the dichotomy between increased consumer demand and a labor crunch, they must find solutions to better prepare them for seasonal shifts as we look ahead to fall and winter.

Many retailers are taking new approaches to adapt to the labor shortage while remaining competitive and attracting new employees. In addition to increasing wages, offering new benefits and providing more schedule flexibility, brands like CVS Health are finding unique solutions, with the opening of its Workforce Innovation and Talent Center, to provide employment services and training to underserved populations. Walmart has committed to invest nearly $1 billion in the next five years in "career-driven training and development," meaning Walmart and Sam’s Club associates in the U.S. can earn college degrees or learn trade skills without taking on education debt.

As retailers re-skill their employees and encourage employment, there are actions that can be taken in the interim to reimagine the physical store, teeing up retailers for success in this year and beyond as the industry catches up to the surge in consumer demand. According to IBM, in response to consumer behavior during the pandemic and post-COVID 19, retailers should look to in-store promotions and local products to drive consumers back into physical storefronts. In-store promotions were the top factor that could drive consumers to shop in a physical store, especially for Gen X (54%) and baby boomers (52%). From redesigning a store to ensure it creates a pleasant customer experience to strategizing the promotion of category-specific products, retailers can intertwine merchandise with experience to keep sales moving.

Catering to Your Customer in an Omni-Choice World

At the end of last year, we became acquainted with a new type of customer: the Omni-Choice Shopper. While the abundance of choice played to consumers' advantage during the height of the pandemic, they are now left with a buffet of shopping channels resulting in sporadic, inconsistent behaviors and no clear direction for retailers.

In December 2020, BHDP predicted that specialty and grocery retailers will need to find ways to “seamlessly marry online with in-store messaging and experiences to provide multiple or ‘omni-choice’ solutions for all shoppers” to ensure future relevance with the omni-choice consumer. This remains true eight months later, and this customer isn’t going anywhere fast.

As the consumer returns to the store and routines begin to readjust, today’s shopper remains overwhelmed by the influx of choices and selecting a store that offers an inspired design, compelling merchandise and relevant assortments. This is causing brands to identify their unique differentiators and provide consumers an experience their competitors cannot while catering to the omni-choice shopper and their suite of options.

Big box retailers that have adopted and stuck with an omnichannel approach have continued to see success. For instance, Target had invested in omnichannel solutions before the pandemic, which only accelerated as soon as this method became a survival tactic for other retailers. By the end of 2020, Target's online sales crossed $16 billion, with store pickup and curbside pickup growing 70% and 600% year over year, respectively, according to Target’s earnings reports.

The path to a consumer’s purchase is not chosen based on satisfaction in one channel over another, but more often what is convenient at that time. Now that we’ve established this shopper profile, retailers must learn how to best deliver an omni-choice experience.

Unlocking Competitive Edge Through Personalization

Seventy-one percent of consumers have reported feeling frustrated when their shopping experience is impersonal. According to the takeaways from this study conducted by Twilio, “To stand out in an increasingly digitally saturated market, hyper-personalization is the inevitable future of retail.”

The third component of the new shopper equation is providing convenience and an elevated experience for the customer. More than ever, today’s customer wants to have every element of a shopping experience in their control – from the timing of their trip to the store to whether there is hand sanitizer at the check-out stand, the customer is not only concerned about their wellbeing, but they are craving a personalized and unique interaction with their retailer.

Today’s shopper profile takes a hybrid approach and retailers must mirror this behavior by investing in store redesign and digital experiences while embracing innovations to match expectations of flexibility, options and convenience. Retailers can achieve this and further integrate themselves in the customer’s shopping journey by reimagining and strategizing the store layout, establishing an ecommerce presence, providing digital in-store options, adopting a frictionless checkout and incorporating a personalized digital marketing strategy.

Solving the Equation

As consumer demand and spending continues to outpace the speed at which brands can adapt to our post-pandemic reality, retailers must focus on what they can do now to create an inspired experience and provide customers with options.

Through personalization and creative, hybrid business models that enhance the customer experience, retailers will have the tools needed to solve the new shopper equation to drive results and ultimately, win the trust and loyalty of today’s omni-choice shopper. 

The retailers that paid close attention to these trends at the end of 2020 and into 2021 are the ones who will advance and adapt faster to an approach that puts shopper expectations, changed behaviors and decision-making emotional drivers at the forefront of the shopping experience.

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