These past few months have been a period of rapid discovery and abrupt change.
As the FMI summed up in its latest trends report: “The microscopic novel coronavirus has prompted a generation’s worth of macro-level change.”
For many consumers, going back to pre-pandemic habits won’t happen overnight, while others won’t revert at all.
In the ‘new normal,’ consumers have had more time to consider the products they can live without and those they can’t. Many have cut down on the frequency of shopping trips and bought more items in bulk, wreaking havoc on consumption patterns and trends.
Meanwhile, millions of consumers have quickly discovered the convenience of ordering groceries online.
During April, grocery sales fueled a 49% jump in e-commerce as shoppers avoided physical stores and human interaction.
Half of those consumers either began shopping online for the first time or increased their frequency because of the pandemic; and, 63% expect to continue doing their grocery shopping online.
Blending on and offline environments in a new retail world
That’s not to say that consumers will stop shopping in brick-and-mortar stores. On the contrary, shopping for food still remains a sensory purchase, and consumers still want to see, touch, and even smell fresh products instore. But they’ll move more frequently between the two worlds, where they might shop online for monthly deliveries of bulky household essentials, such as toilet paper and cleaning products, but visit their local grocery store each week for fresh produce and restocking the wine rack.
Consumers don’t see online and offline as two standalone channels, and retailers mustn’t either. But they must make shopping, whether digital or physical, easy for their customers.
The retail “winners” of this pandemic prove that an omnichannel strategy pays off. Mass retailers like Walmart, Target and Lowe’s will recover faster than other chains because they already had a strong digital presence that complements their instore customer marketing and data collection strategies.
Developing an omnichannel strategy amid the current disruption will create as many new challenges for some retailers as it will opportunities for future winners – this especially applies to those lacking digital capabilities. As a sector, grocers have lagged behind other retailers when it comes to integrating their backend systems and customer data, despite having offered online shopping as long ago as 1995.
Yet, many grocery operators aren’t able to recognize an individual shopper online, even if the person has been shopping weekly in their stores for years. The digital promotions that land in a customer’s inbox often don’t reflect their regular purchase history or preferences. This is a real missed opportunity that eats away at market share as it erodes their loyalty.
With the great lockdown accelerating online shopping behaviors and forcing consumers to reexamine their spending habits and when, where and how they shop, retailers have an opportunity to reset that customer recognition imbalance.
The fact that consumers have increased their overall reliance on digital in the last three months, not just for grocery, is the tipping point for the industry.
Demonstrate you know your customers
By unifying the many points of data being generated by consumers at every point, from the checkout register to loyalty schemes, promotions, social media likes, and website visits, food retailers can develop a deep understanding of who their customers are and how best to recognize and reward them, as well as find more consumers like them. This is also the only way to offset and mitigate rising customer acquisition costs.
But this all requires true digital enablement. With omnichannel capabilities, a grocer could target online shoppers with different promotions to entice them back into brick-and-mortar locations, with savings on in-store purchases or curbside pickup, for example. They could stay on top of changes in customer behavior as and when they happen to better match supply to demand; and, they can reward customers who remained loyal during the crisis by saying ‘thank you’.
A UK survey that Eagle Eye carried out with QikServe found 25% of consumers would be more likely to shop with a business or brand that rewarded them for their continued loyalty during and post-lockdown.
More than ever, consumers want to be recognized for their custom, and many grocers haven’t done a good job of that. But recent events have meant that has to change. By enabling digital customer connections, food retailers can reach customers in one channel that can improve performance and profitability in all others.
Miya Knights is Head of Industry Insight at Eagle Eye, a leading SaaS technology company that enables businesses to create real-time connections with their customers through digital and mobile promotion solutions.
With nearly 20 years’ experience as a journalist, editor and research director specializing in enterprise technology use in retail, Miya has spent this time reporting on the demands and challenges faced by retailers and which technologies can best support their needs.
Miya is also the co-author of “Amazon: How the World’s Most Relentless Retailer Will Continue to Revolutionize Commerce.”