Google’s Chicago offices were once an “ice-house” where local restaurants used to come to pick up fresh produce and perishables for their daily menus. Fortunately, the insights weren’t “on ice” as Google hosted the ARF on October 12 for a Shopper Insights Forum, “Grocery Isn’t Dead, It’s at Your Doorstep.” Following are some key themes from the event.
On-line grocery shopping is growing, but brick & mortar stores aren’t dead: Data from GfK’s 2017 FutureBuy study showed that while 1 in 4 grocery shoppers are purchasing on-line, still more than 95% of them are buying groceries, health & beauty, and OTC pharmaceutical products in brick & mortar stores. NPD Group showed that still 3/4ths of retail dollars are spent in physical stores.
Shoppers appreciate the value the of on-line but still prefer the “touch & feel” of shopping in-store: Not quite half of shoppers appreciate the “touch & feel” of buying products in-stores, according to GfK. And that benefits retailers with large physical footprints. InfoScout data from a KraftHeinz case study shows that the proximity of Walmart encourages a stop at the local store. But shoppers also recognize the value and money-saving benefits of shopping on-line. Whether it’s convenience, selection, or comparing prices, on-line shopping is now offering the benefits that large retailers used to own. However, delivery fees remain a hurdle for some on-line shoppers, and physical retailers are exploiting that resistance with expanded “click & collect” offerings.
Data remains key to making that critical connection to the shopper: Great data and great insight are still key to connecting with and inspiring shoppers to act. Our expert panel from Coca-Cola, KraftHeinz, and InfoScout reiterated that whether it’s digital or brick & mortar shopping, having the right data to understand the why behind the buy helps them meet shopper needs in all channels. And as IRI and 84.51 demonstrated, great data helps customize the retail message across all media, and allows retailers to personalize pricing strategies to maximize sales.
Shift from Bricks to Clicks: Brewing Up Coffee Sales in an Omnichannel World Mollie DeBrie – Sales Director, InfoScout
James Melucci – Shopper Insights Lead, Kraft Heinz
This presentation discussed some key macro-trends in retail as well as how Kraft Heinz capitalized on ecommerce growth while maintaining its Brick & Mortar business for its coffee products. Key takeaways:
What shoppers are expecting regardless of channel: a great experience, personalization, innovative and easy delivery, tech-enabled check-out.
Ecommerce acceleration is being driven by trip frequency. Households are making fewer, smaller trips and the ease and convenience of online buying fosters that behavior, even in categories that typically skew towards larger basket sizes.
Shoppers are switching retailers primarily for convenience and experience but also for perception of value.
Almost ¼ of Kraft Heinz Consumers buy food and beverage online. 5% of coffee buyers buy online (30% growth vs. year ago). The online coffee buyers tend to be high income, educated consumers.
Kraft Heinz strategy for omnichannel activation included: making the coffee category as a strategic destination, both online and in-store; refocusing assortment and merchandising (pods for online and value offerings for key retailer); making subscription offering more prominent online; invest in paid search to ensure Kraft Heinz brands shows up at the top; more clear price-driven segmentation; investing in a .com site which is coffee centered and experiential.
Panel:Whither the brick & mortar store? Thurman Williams – Director, e-Commerce Omni-Channel, The Coca-Cola Company
Mollie DeBrie – Sales Director, InfoScout
James Melucci – Shopper Insights Lead, Kraft Heinz
Moderator: Chris Bacon – EVP, Global Research Quality & Innovation, ARF
This panel discussion touched upon best practices in keeping up with the evolving retail environment and shopping behavior. Key takeaways:
If you keep your eye on the shopper, then you are able to navigate. As the shopper evolves and changes, it’s a matter of leveraging the insights and the data you have on hand to make the right decisions both in-store and online. (Williams)
Leverage the data but also look at reinvention. Look at how to draw people back into the center of the store through experience, taste and feel. (Melucci)
The food category is an especially important area to watch. C-store chains have started adding prepared foods, because this is really a driver and trigger of trips to stores. Food is the anchor of those baskets. (DeBrie)
A working shopper has 82 minutes of non-labor time a day. A lot of shopping occasions happen after 10 pm. Click & Collect will continue to be a phenomenon because it saves the shopper valuable time, but also drives tore profitability and build bigger baskets. (Williams).
Since online doesn’t offer the sensory cues and navigation that we are used to in physical stores, we need to think of tactics and strategies for the online environment, that will provide value to the customer and drive impulse sales. (Williams).
Long Live the Store! Keeping Brick and Mortar Stores Relevant Jim Brown – VP, Shopper & Retail Strategy, GfK Consumer Experiences
In 2016, U.S. ecommerce growth outpaced retail 5.5 times. Omni-channel behavior is indeed rising but the store is still king. Majority of shoppers still buy in physical stores. Key takeaways:
90% of all U.S. retail sales are transacted in a store.
Heavy mobile shopping is not keeping the Gen Z out of stores. 67% of Gen Z shop in stores “most of the time.”
What shoppers expect from store visits: Information, curation, experience, “test drive.” Thriving retailers are aggressive in all of these four areas.
Benefits of ecommerce: convenience, assortment, and value.
It’s not either/or. Blending of retail and ecommerce will accelerate.
Why On-Line Has Taken a Bite Out of the Traditional Store Diane Tielbur – President, Food & Beverage Practice, The NPD Group
Brands and retailers need to consider what the retail landscape looks like as e-commerce matures in each category. Compared to other industries, food and beverage is still building online usage. Below are some current trends in this category:
Online grocery shoppers are not abandoning brick and mortar stores but use online as part of a strategy to minimize their time in each store. Online shoppers say three-fourths of what they spend on groceries is spent in stores.
Much of the shift toward online for groceries comes from younger men who increasingly are responsible for grocery shopping. Men now represent more than 40 percent of those who are primarily responsible for acquiring the groceries in their homes.
Online consumers are more valuable as they spend over 20% more on groceries than B&M only consumers.
The line has blurred between retailer and restaurant as businesses work to meet the consumer demand for more convenience, giving rise to a hybrid solution the “grocerant.”
What’s next: continued sourcing disruption, rise of the niche brands, and improved experience off and on-line.
Personalizing the Customer Experience: Driving Relevant Connections Across Channels Keith Janson – Director of Kroger Customer Communications, 84.51°
Today the average American is exposed to 5,000+ marketing messages a day. It’s very important to be relevant and timely with our messages so that consumers do not tune them out. To achieve this, 84.51° advocates these four principles:
Know your customers better than anyone.
Always deliver relevance. Understanding the entire customer journey is critical to give customers what they want when they need it. E.g. a significant number of customers want information and content when they are discovering and shopping.
Layer channels for greatest impact. 84.51° saw a 7X sales lift from adding a second channel and continued multiplier effect with each additional channel.
Keep it simple. Embrace a cohesive message across channels.
Personalized Pricing with Frequent Shopper Data Nagi Jonnalagadda – SVP/Partner, IRI