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Grocers need to provide more targeted shopping experiences tailored to specific consumer needs and changing demographics, a new report from PricewaterhouseCoopers (PwC) suggests.
The report, "Front of the Line: How Grocers Can Get Ahead for the Future," is based on a survey of more than 1,000 shoppers.
"Grocers can no longer rely on providing a one-size-fits-all customer experience. The next wave of millennial consumers is likely to demand individualized attention and a shopping experience that meets their specific wants and needs," said Steven Barr, PwC's U.S. retail and consumer practice leader. "We're helping our clients look closely at their target customer segments on a micro level to effectively tailor the path to purchase for each shopper when they are in and out of the store. Grocers that truly get to know their customers on a store-by-store basis can find success in the future."
According to the London-based global professional services firm, 83 percent of survey respondents prefer to shop at traditional grocery stores. That's unlikely to change in the future; however, customers will likely call for more personal connections with their grocers in the form of targeted coupons and deals, robust reward programs, and convenient, efficient in-store shopping experiences.
More than half of the shoppers surveyed complained of long lines and crowded stores. Grocers that provide a smoother in-store experience by taming congestion are likely to earn repeated shopper visits. Furthermore, shoppers will increasingly look to store employees as shopping advisers, whether for additional product information, new recipe tips or purchase recommendations, as consumers will want increased service and assistance with decision-making.
Although online shopping is seeing exponential growth in the retail industry, the grocery segment has not shown the same levels of engagement. Only 1 percent of survey respondents consider online shopping their primary way of purchasing groceries, though 92 percent reported having the option to shop for groceries online
"While online channels may not become a common way to buy groceries in the neear future, technology will still play a major role in the evolving grocery experience," said Sabina Saksena, managing director in PwC's U.S. retail and consumer practice. "Shoppers expect information at their fingertips, and, according to our survey, more than half of respondents want to integrate their mobile devices into their future grocery experience. Grocers that innovate and build on their digital channels to meet this demand will be most successful."
PwC's report provides five tips for grocery retailers to prepare for the future and stay ahead of the curve as demographics shift and consumer needs evolve:
- Tailor your brick-and-mortar stores. With urbanization on the rise, grocers need to consider new store locations, formats and layouts to meet customers where they go. Understanding the needs of those closest to their stores, grocers can customize to customers' current and future preferences, such as implementing wider aisles, additional parking, easy-to-reach products and a smoother checkout process.
- Personalize your marketing strategies. Stores should act as gatekeepers for consumers, labeling products clearly with their sustainable qualities, allowing for a more intimate connection with the product. Additionally, consumers value community and expect their local grocer to participate in community events, support area businesses and help preserve the environment through sustainable business practices, all of which can be marketed throughout the store.
- Empower your staff. Ongoing staff training, including arming staff with in-depth product and service knowledge is critical. Employees should be prepared to readily offer customers suggestions aligned to their lifestyles, budgets and health goals. This can differentiate a store as a source of knowledge and build more personal and profitable relationships with shoppers.
- Transform your technology. With smartphones on the rise among U.S. adults, grocery retailers should consider in-store information kiosks, in-aisle tablets and robust mobile applications for customers to readily access the information they need, from ingredient lists to food origins and nutritional facts.
- Reinvent your loyalty programs. Customers want flexibility and control in how they earn and use their loyalty reward points. Robust loyalty programs can help grocers keep future customers spending in their store versus that of a competitor. Also, offering customer loyalty points for purchasing promotional items and healthy foods in the store can help push new products at higher price points, increase sales and boost a store's reputation as a health-conscious grocer.
For more information and to download an electronic copy of "Front of the line: How Grocers Can Get Ahead for the Future," visit PwC's website.