Milk, eggs, and a topsy turvy grocery market
Walk into a Kroger or Safeway and what do you see? The same brands you’d see in Whole Foods, Costco, ALDI, and so many other conventional and natural and organic stores.
Convenience, price, private label, and organic can now be found everywhere. Consumers have a wide range of options to find what they’re looking for, and what were once differentiators are now table stakes.
So how can a grocery chain stand out and plan for the future of the industry?
Here are a few ways to start:
Know Gen Z
Get ahead of the curve by learning about this important and upcoming shopper group. While they may expect vs. prioritize organic, they are skeptical about claims and want to know about animal welfare and the treatment of employees. Growing up as digital natives, they expect digital interactions, but crave real interactions.
Tip: Although you can find general customer data about Millennials and Gen Z consumers, if you’re not understanding what they’ll really do rather than what they intend to do (the intention/action gap) or if you don’t know about the specific consumers in your region, you’ll miss the mark on knowing how to best address them.
Invest in Merchandising Freshies
Packaged goods are the same across the board. As we heard in one consumer interview, “I could buy the same brand for $2 less in that big box store or online. It’s the same thing, so why should I pay more at my local grocery store?”
However, consumers in our research studies told us they still want to choose their own fresh produce and meat; they don’t trust an Instacart shopper will know how to pick a good avocado and they don’t think mail order services can get them the freshies they want without excessive packaging. For many consumers, the quality of produce and meat is an indication of the quality of the store overall.
Tip: Draw people in through excellent fresh items, then move them throughout the store with an excellent floor plan
Reconfigure Your Floor Plan
When every store looks the same, with rows of mustards and canned goods, consumers won’t go out of their way to look for new products or go into new stores. Consider how can you make the shopping experience an experience. Beyond lighting and width of aisles, how are you making your store and products stand out? How are you bringing fresh items into the aisles? How are you showing that your store or chain of stores is a new and independent experience?
Tip: Think beyond your sector when considering floor plan design. For example, consider how Starbucks changed the coffeeshop experience by making it a “third-place” rather than just a coffee chain. Or how Apple took a minimalist approach to its store design to invite people to interact with products directly. What are you highlighting and why?
Focus on Local and Regional Producers
When Amazon bought Whole Foods, they consolidated buying, taking away the entry point for many local and regional brands to showcase their items. Moreover, this transition has made one Whole Foods just like every other one in the country, leaving a space for other grocery chains to differentiate based on location.
Tip: Screen the best local producers, then offer their products on a trial basis. It would not only bolster hometown pride, but also offer a reason for your community to see what’s new in your regional grocery store.
More competition in the grocery arena doesn’t mean grocery stores have to have a race to the bottom and compete on price. With focused research and planning, your local store can grow and thrive in this new landscape.
Work with us to get the answers and action plan you need to thrive in a more competitive landscape.