Sponsored by Epson
Consumers are shopping online now more than ever, and that includes buying groceries. According to the FMI-Nielsen report, the “Digitally Engaged Food Shopper,” about one-quarter of U.S. households currently buy some groceries online, and more than 70 percent will engage in online food shopping within the next 10 years.
These shoppers can choose among Amazon Prime, Walmart.com and grocery retailers that partner with Instacart and other delivery providers. Brick-and-mortar grocery retailers are adapting by implementing their own online platforms, and by making the in-store shopping experience more convenient and pleasant.
Here are six strategies to help supermarkets compete in this changing environment.
Control the climate
When Amazon purchased Whole Foods for $13.7 billion in 2017, the online giant gained 400-plus locations that can serve as distribution centers for its growing online grocery business. Grocery stores that think that they are at a disadvantage to Amazon need to understand that they already have what they need to compete online. They have a network of climate-controlled warehouses (the stores). They have a logistics system that continually replenishes their stores. They already have online ordering apps. And, they have inviting spaces that offer sampling, merchandising and up-to-date assortments in every category. The stores can attract consumers who want to shop in-store, as well as consumers who want to buy online and pick up in-store.
According to a survey by Internet Retailer, 57 percent of consumers said they went to stores to pick up an online order, and 73 percent said they did so to avoid shipping fees. That means opportunity for stores that offer click-and-collect: They can increase traffic to the stores and also encourage impulse purchases from these shoppers.
“Grocery stores should start thinking of themselves as not just brick and mortar,” says Luis Artiz, group product manager for the printing solutions provider Epson. The challenge, he says, is that stores have to rethink labor. Unlike Amazon’s larger distribution centers, Artiz notes, “there is no robot to pick items off shelves.”
While the cost of labor is a concern for any business, the good news for retailers is that as they automate some tasks, this frees up staff to assist customers. For example, self-checkout lanes are becoming more commonplace. Amazon is piloting Amazon Go, a cashier-less store in Seattle. Walmart launched Scan & Go, where customers can scan items with their smartphones as they walk through the store, and pay on their phones. Kroger is launching “Scan, Bag, Go” in stores, enabling customers to pay by using an app on their smartphones.
Redefine customer service
In order to compete with online retailers, supermarkets must have well-trained, engaged staff members. “The employee should not just be a stocking person,” Artiz says. “You want that person to be a trusted advisor.”
For example, he says, at Vons supermarkets staff members help customers find items by walking the person to the correct location in the aisles. At Trader Joe’s, workers chat with shoppers about how they intend to prepare certain foods. That makes these brick-and-mortar visits more purposeful for consumers, and more profitable for the stores.
Improve loyalty analytics
Consumers want more than dinner ideas. They also want discounts, and in the grocery channel that means coupons. With analytics, supermarket loyalty programs have become predictive systems that use artificial intelligence (AI) to upsell items to shoppers. For example, the consumer gets a coupon for a box of tissues after buying cold medicine, or for organic yogurt after buying organic produce. Robust analytics can generate new sales that increase the basket, not just discounts on products the person would have bought anyway.
Adapt to the male shopper
According to “How Men Shop for Food,” a 2017 study Men’s Health conducted online with Harris Poll in 2017, 84 percent of men say they are the primary grocery shoppers in their households, a 19 percentage point increase over the past decade. For inspiration, almost half (48 percent) watched cooking videos, and 46 percent of those men watched on social media, up 39 percentage points from 2010. Retailers that are active in social media have an opportunity to reach these home cooks.
Update to the latest tech solutions
According to a survey by Bouncepad, three out of four consumers want more technology in brick-and-mortar businesses, and would be more likely to visit the business if tech were available. For supermarkets, that can mean a wide range of technology. Deli kiosks enable shoppers to place orders, continue shopping, and then pick up the food and pay with an app. Mobile apps offer personalized recommendations and offers to shoppers as they walk through the store. Point of sale (POS) technology can do more than print receipts, and can store loyalty information in the cloud.
“Grocery stores have to make sure that they are thinking about the latest technology with an ultimate goal of creating a great consumer experience,” Artiz says. “They need a deployment plan, and they need to make sure there is a workflow reason for it.”
Epson offers one of broadest portfolios of printing solutions for the point of sale and point of service markets.