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The COVID-19 pandemic brought rapid and seismic shifts to the way the grocery industry does business. Even with surges in revenue, practices had to be continually adjusted to meet the changing needs of consumers. Now that the country is poised to emerge from pandemic-era shopping, some adjustments may become permanent. Some of these innovations were brought on stronger by shifting needs; some have been a long time coming. What will grocers invest in the most after facing the challenge of COVID-19? Grocers will invest in streamlining omnichannel grocery—particularly online services—as well as in AI and cloud technology, hiring and labor, and the continuing development of private labels.
COVID-era grocery saw rapid growth in eCommerce solutions across the board— and the popularity of online grocery shopping is not dissipating post-pandemic. Grocers continue to innovate online grocery platforms in an effort to make the omnichannel experience effortless for both retailer and consumer. One way retailers are doing this is by making the eCommerce platform private and branded.
Stater Bros. recently announced development of “an online grocery platform under its own brand using technology provided by Mercatus, a Toronto-based provider of e-commerce systems for retailers.” A privately branded eCommerce platform will allow Stater Bros. to build stronger relationships with customers with a “journey that truly embodies [Stater Bros.’] promise of excellence in food and service,” says CEO Pete Van Helden. The Mercatus platform specifically will also allow Stater Bros. to take advantage of the CitrusAd retail media network, creating additional revenue streams through CPGs looking to advertise products on the site.
This development follows a trend of grocers investing in their own online grocery platforms while maintaining pre existing relationships with third-party delivery providers like Instacart and Shipt.
Data is another rising trend in grocery. Some grocers are harnessing AI and cloud technology in order to further customize and enhance the omnichannel experience—and, most importantly, to put the consumer first.
Data technology and grocery stores will become increasingly prevalent. Joining forces with information technology companies allows grocers more access to consumer habits, and the ability to watch these habits change over time. Reaching consumers with streamlined solutions for online ordering, special perks of loyalty reward programs, and personalized coupons are just a few things predictive technology can allow grocers to achieve. Subtle personalization toward the consumer online or on-app helps the shopping experience feel exclusive and tailored without feeling invasive—and may just help retain that consumer for many years to come.
A deficient digital grocery experience runs the risk of being disconnected from the physical shopping experience, or being difficult to navigate. Even post-pandemic, online shoppers will expect easy-to-use online platforms and quick and quality service when it comes to pickup and delivery. Presenting a more holistic digital experience benefits both the grocer and the consumer.
Private brands are increasingly garnering consumer attention, surging in both popularity and sales. The results of a recent survey conducted by DemandTec and Progressive Grocer parent company EnsembleIQ found that consumer interest and trust in private labels is on the rise. Their findings stated that “an astounding 80% of respondents to the survey considering them to be of similar quality to or higher caliber than national brands.” With growing interest shown by consumers for often more price-savvy selection of private label products, grocers are stepping up to the challenge.
Optimization of private brands is the key to a competitive advantage over national brands and CPG distributors. Like Albertsons with Soleil, many retailers are looking to optimize private brands by marketing toward trends. For example, the rise in plant-based products is currently a wide-open door for private label brands like Target. The retailer recently debuted Good & Gather Plant Based, an expansion of its private-label Good & Gather, in an effort to meet growing demand for plant-based options. Kroger has also expanded plant-based private label products over the past year, as has Albertsons, launching a line of sustainable wines and introducing compostable nonfood items under the Open Nature brand.
In efforts to make private labels begin outpacing national brands once more post-pandemic, it will be up to grocery retailers to entice consumers through trendy products—whether that means plant-based meat or sparkling water—and creative, interactive marketing campaigns.
As shoppers emerge once more into in-person experiences, grocers will have to get creative in their efforts to retain the high profits of the pandemic-era.