Rethinking the Grocery Shopping Experience
Traditional retail has experienced a seismic shift over the last few years as more and more shoppers go online, forcing retailers to boost and optimize their digital presence. There's no space more poised for a shakeup than grocery stores. Once immune to the online trend, more companies, including Amazon.com, are pushing into this space. A few years ago, Amazon launched Amazon Fresh, its grocery delivery service. In June, the e-commerce giant announced it would acquire Whole Foods for $13.7 billion. And more recently, Amazon filed a trademark for its own prepared meal kit service. Amazon’s growing presence in the grocery industry has the potential to dramatically disrupt the way consumers shop for groceries.
The Next Frontier for E-Commerce
According to the US Department of Commerce, e-commerce accounted for 11.7 percent of total retail sales in 2016. That’s a 15.6 percent increase over 2015. Though more and more transactions happen online, grocery has traditionally fallen behind, especially in the U.S.
While the majority of groceries are still purchased in-store, there number of consumers shopping for food online is rising sharply. In fact, this trend will likely accelerate with Amazon jumping into the space, and I’d argue that grocery will become the next frontier for e-commerce.
Now, that’s not to say that traditional grocery stores will be a thing of the past. Instead, consumers’ expectations will evolve, requiring grocery retailers to rethink the way they operate.
Brick and Mortar Isn’t Going Away
It seems like we’re constantly bombarded with headlines about another retailer closing its brick-and-mortar locations. However, there’s also plenty of evidence of another trend — online-only retailers such as Fabletics, Warby Parker, and yes, Amazon — opening physical store locations. In fact, when I recently attended an IRCE presentation by Gregg Throgmartin, president and general manager for Fabletics, he argued that “it’s one of the best times to open a brick-and-mortar store.”
Obviously, e-commerce continues to grow, but physical stores provide the opportunity to experience products firsthand, something consumers simply can’t get when they’re shopping online. A shopper can feel the fabric of a dress or try on a new lipstick shade before committing to a purchase, or, in the case of Whole Foods, she can hand select her own produce.
However, stores can no longer survive by simply being a place to conduct a transaction. Today, consumers go to a store expecting to be entertained and inspired.
Clearly, Amazon recognizes the consumer’s desire for great in-store experiences, which is why they chose to acquire a grocery chain that goes beyond the transaction. For example, at the Whole Foods store in the Lincoln Park neighborhood of Chicago, visitors can enjoy a glass of wine after work, meet a friend for lunch, or enjoy a children’s cooking class with the family. These unique experiences allow consumers to connect with the brand on a deeper level — and they likely lead to future purchases. The consumer that attended a wine tasting opts to purchase a few bottles of the wine they tasted for a housewarming party. The mom that attended the cooking class returns to Whole Foods to purchase the items needed to recreate the meal.
It’s Time for Grocery Retailers to Marry the Online and In-Store Experience
If you’re a grocery retailer, you have an opportunity to rethink your in-store and online strategies and focus on creating a seamless shopping experience for consumers across all channels. Here are two ways how:
1. Leverage your brick-and-mortar stores.
If you have brick-and-mortar grocery stores, think of ways you can leverage them to create memorable experiences for your customers that go beyond a transaction. For example, offer cooking classes that entertain and inspire consumers, or offer spaces and opportunities for shoppers to socialize. According to a Capgemini study, 60 percent of consumers want stores to provide a social experience with friends and family.
Offering rich experiences to in-store shoppers will allow you to forge deep connections with them. And I’m willing to bet that those who visit your store for a cooking class or wine tasting will stay to pick up some groceries, too.
In addition, look for opportunities to leverage your brick-and-mortar stores as a tool to help drive your online success. One way retailers are doing this is by offering in-store pick up of e-commerce orders. For example, 55 percent of all digital sales for Target are fulfilled in-store. Offering this service not only saves your customers time, it also has the potential to drive additional in-store sales.
Finally, think of ways you can bring the online shopping experience to your brick-and-mortar stores, something Amazon has done extremely well with its physical book stores. Make sure that all of the information available to consumers online is also available in-store — e.g., prominently featuring star ratings and reviews alongside your products to boost customer confidence.
2. Bolster your online presence.
A growing number of consumers are browsing for and purchasing groceries across channels. According to a study by Nielsen and the Food Marketing Institute, 23 percent of American households are buying food online today and 72 percent of shoppers expect to buy groceries online in the future.
Now is the time to bolster your online presence. For starters, make sure your website provides a great user experience for shoppers, including plenty of information about your products and your stores so shoppers know exactly what to expect. PowerReviews research found that poor product information is the top irritation for consumers when browsing for products online.
In addition to your own product descriptions, be sure to prominently feature product ratings and reviews on your website so consumers can hear about the experiences of other consumers. As an added bonus, user-generated content (e.g., ratings and reviews) can ensure your product pages are showing up in search engine results.
However, it’s not enough to simply collect reviews. Instead, be sure you’re regularly monitoring reviews and acting on the insights they provide in order to improve products and the customer experience.
Retailers that survive — and thrive — are those that successfully marry the online and in-store shopping experience. Now is the time to rethink your online and in-store strategy.
Theresa O'Neil is senior vice president of marketing at PowerReviews, a platform to increase product ratings and reviews, site traffic and conversion