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By Eric Shea, VP of Technology at Mobispoke
In recent years, the grocery market has undergone dramatic changes to meet the evolving needs of consumers. Traditional supermarkets are scrambling to differentiate themselves and compete -- from the consolidation seen from deals like the recent Stop & Shop-Hannaford buyout to A&P’s latest move to close or auction almost half of its nearly 300 stores -- and they realize they need to change to keep up with the evolving industry landscape.
In fact, a recent report from retail consultancy Willard Bishop, JLL predicts that by 2018, traditional supermarkets' share of grocery dollars will have shrunk 300 basis points to 37.2 percent, as customers increasingly look to spend their dollars at fresh formats like farmers markets, limited assortment stores such as Trader Joe’s and e-commerce sites such as Amazon.
The main motivators driving this shift are convenience and the on-demand economy. Consumers are turning to options that offer easy and fast service without sacrificing quality such as Peapod or Instacart, and even Blue Apron, a leading recipe and fresh ingredient delivery service. Ultimately, in order to get consumers back in stores, food retailers need to rethink the traditional model and look for innovative opportunities in-store to promote convenience and re-engage shoppers.
Think Beyond the Aisle
The traditional grocery store set-up is familiar to most, with aisles and aisles of food separated by category, from produce and meats to canned goods and baking supplies. Historically, supermarkets have relied on flash sales and showy displays to engage shoppers in-store. To capture the attention of the modern shopper, however, grocery stores need to rethink their strategy to meet the needs of today’s connected, on-the-go consumers.
Food retailers need to innovate in order to bring greater convenience to their shoppers, and for some this might mean moving away from the traditional supermarket model. In the U.K for instance, grocery giant Tesco launched Tesco Express and Metro chains that offer limited selections and greater grab-and-go options, catering to busy customers in town or city centers. For U.S. grocery stores, now is the time to rethink the in-store experience — whether building out the prepared food section to better meet consumers’ desire for accessible, ready-made meals that are fresh and healthy, or creating new shopping models, such as offering in-store restaurant dining options for consumers who want to be able to have a sit-down meal. By providing a mobile app that allows them to easily “shop” while they eat and have their groceries ready when they finish up their lunch or dinner, supermarkets have the opportunity to redefine the future of how people shop for groceries. As the on-demand economy continues to grow, consumers want to see service options that meet their evolving needs and cater to their lifestyle.