Joseph Tsidulko | Content Strategist | April 12, 2023
If you want to see what rapid business transformation looks like, head to your local grocery store.
When we entered COVID-19 lockdowns, stores large and small had no choice but to adjust to the new normal of online grocery shopping, and customers got used to the convenience and ease of ecommerce, curbside pickups, and home delivery. The shift online has prompted changes at physical stores designed to draw people back by highlighting and expanding the unique benefits of in-person shopping.
Now, with high inflation and product shortages caused by the disruption of global supply chains, large supermarket chains as well as independent neighborhood markets are adopting advanced technologies, from the back office to the front register, to optimize their operations. Those systems, some embedded with AI, replenish inventories more precisely, personalize customer service, speed the checkout process, and allow room to lower prices by reducing administrative costs and waste.
The experience of grocery shopping had been much the same for as long as anyone could remember. Shoppers didn’t go to the market looking to find the latest and greatest technological innovations or a novel experience.
Or at least they didn’t until the pandemic turned the industry on its head. More than two years of lockdowns jump-started ecommerce in the industry—and raised consumer expectations for what they would find at the local store.
Online shopping has become ubiquitous. But until the onset of COVID-19, most people still ventured out of the house and pushed a shopping cart to get their groceries.
The pandemic, with its many lockdowns, thrust a much larger share of grocery shopping into the digital domain. Consumers took to mobile apps and websites to order groceries delivered to their homes or made available for curbside pickup outside the store.
In a grocery retail survey Oracle conducted in 2020, 53% of respondents in the US said they had purchased groceries online during the pandemic, and 37% of them said they did so more often than in a store. Most of them liked that experience enough to stick with it—93% said they expected to continue shopping online for at least some of their groceries after the pandemic subsided.
Many people are happy to have discovered the ease of shopping online for groceries, but that doesn’t mean they’re done with brick and mortar. About seven in 10 respondents to a 2022 Oracle consumer survey of retail trends said they still prefer to shop in a physical store.
There’s an appeal to wandering the aisles of your local market, browsing the options at the deli counter, checking out the salad bar, getting suggestions from the butcher, and, on the same trip, picking up prescriptions at the pharmacy or cash from the ATM.
A 2021 grocery consumer survey by Accenture found that more than half of respondents plan to shop for groceries online and in stores—both ways—going forward. In the post-pandemic world, grocers of all sizes would be wise to provide these omnichannel options. Online offerings should encompass both conventional ecommerce (the kind conducted over a web browser) and mobile apps. Some supermarket chains are even partnering with social media companies, helping shoppers discover new brands, plan meals, flag items they’re interested in, and share their culinary inspirations with larger networks.
Most shoppers appreciate when grocers reach out to them with personalized offers, discounts, and programs tailored to their tastes and preferences. That’s become a key strategy for grocery retailers to build brand loyalty and improve the customer experience.
In Oracle’s 2022 survey examining shopper behavior (PDF), two-thirds of respondents said they want grocers to reach out with discounts and offers on items they’ve purchased before. Almost a third want their grocers to predict items they might be interested in buying in the future. Millennials in particular prefer this kind of relationship—38% of the respondents in that age group said they want a more customized experience and want their favorite grocers to get to know them better.
The Accenture survey of grocery consumers found that nearly 30% of respondents would always prefer a grocery retailer that offers loyalty points or discount rewards on purchases. The percentage shot to almost 90% when including those who would sometimes or frequently choose grocers on that basis.
Nobody wants to drive far to the grocery store, be unable to find a lot of the products they want, and then spend a lot of time waiting in a checkout line. So it shouldn’t be too surprising that consumers overwhelmingly cite convenience as the most important factor in shaping their shopping experience, both in the store and online.
More than 90% of respondents to the Accenture grocery consumer survey said that product availability, proximity to home, and/or the ability to shop as quickly and easily as possible are important to them when considering where to buy groceries. With ecommerce, the primacy of convenience is just as clear, with the main issues being minimizing product substitutions and having a good availability of delivery slots.
The industry is taking notice. Supermarkets are looking to invest in technologies that speed up service, make it easier to find products, and let customers get in and out of their stores in less time. Self-serve kiosks—including food-ordering touchscreens and automated lottery ticket dispensers—make it easier for shoppers to quickly get what they want in a crowded market. Self-checkout stands and mobile checkout shorten lines. Electronic payment methods reduce time spent at the cashier.
The grocery store is a social hub in many communities—a place to run into neighbors, try products from small businesses produced by local entrepreneurs, sign a petition, and support community organizations. It’s a role that brick-and-mortar stores can uniquely fill.
The Accenture grocery consumer survey reported that 85% of respondents want their grocery stores to support and contribute to their local communities. That can mean donating to community food banks, raising money for charities, contributing to neighborhood causes, sponsoring youth sports teams, and letting Girl Scouts set up shop to sell their cookies.
People want the businesses they patronize to uphold their core values. And for many, that includes selling products that are produced and maintained ethically and sustainably.
The Accenture survey found that shoppers of all ages prioritize a supermarket’s commitment to sustainable environmental practices. About three-quarters of respondents said they’d switch their business to a grocery retailer that better understands the importance of sustainability to them.
Sustainability means different things to different people. For some respondents, the priority is reducing food waste. For others, it’s reducing plastics in packaging. For others, it’s sourcing products locally to reduce transportation miles and the carbon emissions those miles represent.
Grocers are rising to the challenge. Many now offer sustainable product refills; provide recycling, composting, and waste management services; power their stores with green energy; ensure suppliers follow environmentally sound practices; and aim as an industry to standardize sustainability metrics.
Grocery shoppers have always preferred neatly stacked shelves, wide aisles, well-scrubbed floors, and a generally clean store. What changed during the pandemic is that cleanliness became associated with safety.
During the height of COVID-19, many shoppers only felt comfortable going into stores they saw were regularly wiping down surfaces, requiring and providing space for social distancing between customers, and offering touchless hand sanitizer dispensers and cleaning wipes for carts. That mindset is unlikely to fade anytime soon.
Grocers already had been grappling with intense price competition before a surge in inflation made shoppers even more conscious of what they’re paying for everyday items. Most customers want grocers to help them save money; to do that in this narrow-margin industry, grocers need to cut administrative and other costs, in part through automation.
Shoppers increasingly venture out to the store not just to pick up food staples, but also to try new items. They’re looking for items from a variety of small-batch producers, including artisanal breads and cheeses, organic produce, exotic types of meat and seafood, meal kits, and even ready-cooked foods (think rotisserie chicken).
Offering a wide variety of fresh goods that are consistently in stock is no easy feat, but it’s incredibly important. Scant inventories are the leading source of consumer frustration while grocery shopping, according to Oracle’s 2022 survey. More than 40% of respondents to that survey said the availability and variety of products make them more loyal to a grocery store, while 37% said they associate in-stock inventory with a great shopping experience.
Online shopping can be dry and impersonal, but it’s better than dealing with a store employee with a bad attitude. Almost 40% of respondents to Oracle’s 2022 consumer survey said they would shop at a different grocery store if they had a bad customer experience.
A smile and some knowledgeable assistance can make the trip to the grocery store a positive experience; a rude employee can sour a customer on the entire retail brand.
Technology is enabling grocery stores—a traditionally staid sector of the retail industry that’s been uniquely affected by the COVID-19 pandemic—to rise to the rapidly evolving demands of their customers.
In the wake of lockdowns and social distancing, consumers—many of whom discovered during the pandemic the benefits of online grocery commerce—expect a greater variety of fresh goods on the shelves of physical stores, and always in stock. That’s a business opportunity for grocers, as long as they avoid the loop of insufficient or wasted supplies caused by under- or over-ordering. Cloud-based supply chain and inventory management systems can prevent such high-cost failures.
Today’s shoppers, especially those of younger generations, also take to personalized loyalty programs, which let grocers build closer and more enduring relationships with their customers. But deploying such programs involves enrolling large numbers of people, monitoring their shopping patterns, and extending specific offers to them—essentially thrusting grocers into the data business. Industry solutions incorporating advanced data analytics to better track and evaluate shopping patterns enable another opportunity to build brand loyalty in the current retail environment.
Oracle delivers these technology solutions to grocery retailers looking to turn shifts in consumer expectations into greater market share and profit. Oracle Retail’s suite of industry-specific applications helps grocers forecast demand, manage their supply chains and inventories, personalize their marketing, manage private label offerings, optimize their physical and online store layouts, and do so in a more sustainable way.
What do customers want in a grocery store?
Customers insist that their grocers provide a convenient shopping experience, both online and in the physical store, and have in stock the products they want while exposing them to a variety of new items.
What are the most important factors for grocery customers when making a purchase?
Ultimately, price and product availability drive buying behavior. But customers might not even make it to the store unless they feel it’ll be a convenient and safe experience as well as a place that aligns with their basic values, such as sustainability.
How can grocers ensure customer satisfaction?
Grocers can satisfy customers by making sure their stores are well-stocked with a variety of products, have friendly staff that help customers find what they want and discover new items, and provide a safe, convenient experience, from the parking lot to the checkout aisle.
What are the benefits of offering loyalty programs to grocery customers?
Today’s grocery customers want to be catered to. The data collected in loyalty programs helps grocers personalize their offerings to customers and build stronger relationships with them, making repeat business more likely.
How can grocers use technology to improve the customer experience?
Ecommerce platforms make it easy and convenient for grocery shoppers to order and receive a range of goods. Mobile apps improve the online and in-store customer experience by storing shopping lists, offering digital coupons, and integrating with loyalty programs. In the physical store, self-serve kiosks and electronic payment and checkout options speed up the shopping process. Behind the scenes, inventory management tools help ensure that the products customers want are in stock.
What strategies can grocers use to increase sales?
Grocers can increase sales by ensuring that their ecommerce and in-store channels have the items customers want at a competitive price, while introducing customers to a variety of new products. They can also increase sales by investing in technologies that help customers find what they want and get them in and out of their online and physical stores with little wasted time and hassle.