It’s been said that the grocery industry is at a tipping point, where what had been a largely traditional and analog shopping experience tips into the digital age. Well, consider it tipped. The landscape has changed and is challenging the traditional grocer and vendor relationship.
This may be new to CPG, but there’s a roadmap out there for these brands to follow.
At the second annual Groceryshop conference in Las Vegas earlier this month (Sept. 15-18), attendees were focused on digital. Ecommerce, data, robotics and even vertical farming and jumping on the CBD trend were big topics. But at the center of it all was the consumer. Or rather the need to better understand the consumer, how she is connecting to brands digitally and how brands can better understand and meet customer intent.
This new path to purchase has upended the marketing funnel as we knew it. It took a little longer for it to happen in grocery, but the digital age has firmly taken root. The trends and problems plaguing apparel, toys and electronics are now front and center, and it’s a good time to take stock of the top issues facing grocery retail and CPG brands today.
Data and Algorithms
Grocers were among the earliest retailers to collect data through their loyalty programs. But that data languished and was mostly used to push coupons to customers based on prior purchases. There’s nothing more annoying than getting a coupon at checkout for something you just bought at full price, or an email telling you it’s time to repurchase a frequent item, after returning home from the store.
Data today, said nearly every retail presenter at Groceryshop, is key to creating useful personalized experiences for shoppers. Clean data, trustworthy data, compiled by experts within an organization.
This is a big shift for many. In grocery – and some cases, big-box generalists – the retailer owns the data and brands are reduced to bartering or begging for it. New economy retailers are more inclined to share and collaborate to test and create new products and develop messaging. “We like to friend, rather than enemy for the industry,” said Boxed Wholesale Co-Founder Chieh Huang.
Personalization is going to be even more important in grocery than the rest of retail. It’s a commerce category that doesn’t just demand it, but lends itself well new opportunities that go beyond simply remarketing. Something that works well in a lot of product categories – 36% like it – but puts off some 37% of consumers who find it annoying, according to our own research conducted by the Intent Lab, a partnership between Performics and Northwestern University’s Medill School of Journalism.
It’s time to move past this pushing of products based on a buying or browsing history. “We need to make sure personalization doesn’t put products in echo chambers,” said Groceryshop’s Co-Founder and Chief Content Officer, Zia Daniell Wigder. “Our world has only been marginally personalized.” Categories like beauty and entertainment are further along, but food promises to really bust open the doors, with personalized items for different diets and individual tastes.
Tech solutions exist today that create custom diets, think gluten free, low-sugar or paleo, but connecting shoppers to those items online for ordering (pickup or delivery) is more complicated. It’s not just a good idea, it’s an imperative. Consumers are telling us all the time what they’re interested in: their medical conditions, nutritional curiosities and children’s dietary needs. Providing the information (how to get a toddler to eat his vegetables) and a solution (games, serving sizes for small hands) leads to the ultimate goal of conversion in the form of a subscription box or replenishment program.
Because, of course, it all comes down to trust. And no consumer product category is as rooted in trust as grocery. This is the most intimate of all shopping experiences. We trust the safety of our food supply and what we feed our families.
Trust, when extended to eCommerce, now includes data privacy and marketing. And when it comes to data, “it’s a trust economy,” said Garry Senecal, chief customer officer at Canadian grocer Loblaw Cos.
The digitization of grocery still has a long way to go, but offers some of the biggest growth opportunities in consumer marketing.