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A little while back, a report from FMI – The Food Industry Association caught my eye. It provided some pretty compelling data on how hybrid grocery shopping is completely transforming the food retail landscape. Maybe you saw it, too? FMI noted that seven years ago only 7% of surveyed shoppers reported ordering groceries online within the previous month. But by 2022, half yes, half — reported they now shop online every two weeks or more.
No doubt, grocery is one of the fastest-growing e-commerce segments today. Online grocery sales represented 12% of total U.S. grocery spending this past January, and that percentage is only expected to continue to grow. Every grocery category, every demographic group is seeing some shift to digital. But here’s what’s so interesting: It’s not all-or-nothing. According to recent data from PYMNTS, the hybrid grocery shopping model is “quickly becoming the norm.” Nearly 40% of consumers — across all ages — now buy their groceries through a mix of physical and digital channels. They’re driven by convenience and value. They like to save time and easily compare prices. They delight in discovery moments along the purchase path. But they also value the in-store experience. They value the sensory experience of brick-and-mortar, new product trial, and the chance to select their own produce, meat and other perishables.
As shoppers embrace this new model, it’s time to relook at how to make your brands work harder in the new hybrid grocery landscape. Does your organization have the omnichannel enterprise mindset needed to serve the hybrid consumer? According to 84.51°’s recent Consumer Digest survey of Kroger customers, omnichannel shoppers expect a consistent experience between online and brick-and-mortar shopping. To compete, brands must have similar personalization, pricing, promotions and product availability across channels. Consider:
• Is your supply chain set up to serve the hybrid shopper? With convenience a major motivator, brands that aren’t available where and when the shopper is ready to purchase will lose out to competitive products that are available.
• Driving performance in today’s new environment requires even closer partnership and joint business planning between suppliers and retailers. Many mass retailers and grocers are investing to improve their capabilities to track customer purchase history across channels. How can real-time data and advanced analytics available through retail media networks (RMNs) help you to achieve seamless, meaningful experiences across your grocery consumer’s buying journey? How can an RMN be used to adjust pricing where necessary based on consumer shifts in behavior?
• Are your long-term plans taking into account evolving market dynamics in grocery? Buy-online-pick-up-in-store services continue to increase in popularity. And we’re continuing to see growth of online subscription services like Amazon Subscribe & Save, Walmart+ and Instacart+, due to their convenience in refilling household essentials — an issue that rose to the top during the pandemic. For many brands, subscription services present a major opportunity to retain consumers over the long haul. For others, like center aisle dry goods, this may represent a channel shift that needs thoughtful strategic adjustments.
• During an economic downturn, brands that differentiate and maintain a strong emotional connection with consumers have the best chance of growing profitability. Are you adjusting omnichannel messaging and promotional strategies to focus on value, loyalty and performance-based deals?
Today’s hybrid grocery shopping aisle certainly makes for a complex selling environment, but an omnichannel enterprise mindset and approach, joint retail business planning, smart trade investment and seamless consumer experiences can mean greater opportunity and profitable growth. Now is the time to ask yourself: Am I doing all that I can to meet my consumer in the grocery aisle — wherever that takes us?
Jason Reiser serves as president of Market Performance Group, marketperformancegroup.com.
