How COVID-19 has changed the future of grocery shopping
While every industry has been forced to make significant adjustments due to COVID-19, there is likely no industry that has had to pivot as extremely as grocery. A retail vertical that was considered to be quite technologically challenged has now been forced at least 10 years into the future. Thanks to supply chain issues, safety measures, and panic buying, an unprecedented number of consumers turned to online grocery shopping.
Through the summer of this year, in the Bazaarvoice client network of more than 11,500 brands, of which 1,750 are retailers, online orders for food and beverages was up 62% year-over-year. This shift of grocery shoppers going online is likely to be permanent, transforming consumer behavior well into the future. Bazaarvoice’s global survey found that three-quarters (74%) of people have shopped in-store less regularly since the outbreak of COVID-19 — a habit that 32% of U.S. and 37% of European shoppers want to continue after the pandemic.
Retailers like Walmart, Target and Kroger had already started to ramp up their curbside collection capabilities to increase their digital market share before the pandemic. The impact of the pandemic forced them to redouble their efforts. Walmart’s rapid development of curbside pick-up, coupled with its massive distribution network, fueled growth in its grocery business, with e-commerce sales growing by 97% in the second quarter of fiscal 2020 and 79% in the third quarter of fiscal 2020.
Taking a hard look at how to leverage private brands online in this new climate, Bazaarvoice also sponsored a webinar with Store Brands and a panel of experts discussing tools to drive more engagement online. The webinar is available to stream now.
So, with all of this movement online, what does this mean for store brands and retailers going forward? Here are three changes to grocery I predict will stick:
Physical stores as fulfillment centers
This growth in grocery e-commerce is forcing changes in the physical stores themselves, which are becoming smaller as more space is dedicated to online fulfillment. United Kingdom supermarkets like Tesco, Marks & Spencer, and North American brands like Target and Best Buy that started to use their stores as warehouses to enable buy online, pick up in-store, or BOPIS, services some years ago, were the ones reaping the benefits during the crisis.
Dedicating space to staging and pickup areas for BOPIS requires retailers to restrict the number of products they carry in store, and increase the number of products that can only be acquired through online ordering and online discovery. While daunting for some lesser-known brands, this is an opportunity for retailers to prioritize their private labels and place them front and center, both in-store and online.
A newfound reliance on user-generated content
With shoppers visiting brick-and-mortar stores less, purchasing decisions are made without physical access to product information, so choices are largely based on the digital content available for that product. Increasingly, this is being generated by shoppers themselves and includes ratings and reviews, customer photos, and customer questions and answers. Brands and retailers alike need to ensure that all of their product pages are full of fresh, authentic, user-generated content, or UGC, in order to give their shoppers as close to a replication as they can of an in-store experience.
But UGC isn’t just helpful to shoppers, it’s helpful to brands and retailers as well. Especially as more shoppers go online, UGC allows you to understand how consumers and their preferences are changing in as close to real-time as possible. Then, you can feed that information back to management in order to enact changes everywhere from logistics, to marketing and messaging, to research and development to improve the products themselves.
Shopper personalization
One shopper behavior that is shifting is greater interest, and indeed expectation, for retailers to deliver value-added services through apps and personalized notifications.
Our survey found that across both in the United States and Europe more than 1 in 5 shoppers are in favor of grocery retailers giving them mobile notifications, for example, to alert them of stock levels for their favorite products, or tell them where their favorite products are located in-store, and prompt them when they are in the right aisle. Of those who said that forgetting items was their top supermarket frustration, 28% of European and 34% of North American shoppers would choose a retailer app to help them create and track their grocery list as their preferred solution.
Loran Gutt is vice president of corporate development at Bazaarvoice, based in Austin, Texas.
