Reimagining grocery: why understanding customer values is key to business survival

The food marketplace is going to change more in the next ten years than it has in the past 50. Of course, the fundamentals about food don’t change. People still need to eat. But what, how, when and where they do it are transforming out of all recognition. Consumers are no longer simply shopping for what they need. They’re looking for new experiences and new ways to meet their ever-changing, unique tastes. Grocers have the chance to evolve from being more than simply the most convenient place to stock the kitchen. Instead they can become the partner who offers what people want to fulfil their daily food needs and desires. If consumers don’t find that from their grocery retailers, there are plenty of competitors – from Amazon to Uber – moving into the space to satisfy their desires.

Beyond three meals a day

And those desires are complex and ever-changing. Three meals a day is no longer a fitting description for how consumers need to accommodate what and how they eat into busy lives.  Consumers want different things at different times. They may prioritise convenience and ease of preparation one day, and a more hands-on experience the next. Anticipating how those desires change day-by-day is essential. And the key to unlocking those insights is data. Grocers already have enough of that to feed their own success. They just need to combine it together in a new recipe.

A new data recipe

That means bringing together data about purchase patterns, history, lifestyle and demographics to build a far more detailed picture of what consumers want. But that’s only the start. There are countless other sources that can add greater depth and detail to each customer’s profile. A platform-based strategy could connect with data from social media to review sites or wellness apps – all of which could enable increasingly smart offers based on the behaviour of every customer. So will consumers be willing to provide all this data about themselves? They will if they value what they receive for doing so: 74% of consumers say that they do not mind sharing their personal data if they get something in exchange.

Right time, right place

A data-driven approach to grocery consumers needs to go beyond simply making offers more personalised. To be truly relevant, grocers need to make offers at the right moment. That could mean, for instance, directing customers in-store away from generic to private-label brands with a targeted message straight to their mobile. Or it could highlight convenient delivery or click & collect options that accord with an individual consumer’s precise needs at a specific time. Grocers also need to be alert to trends that might signal a new consumer need. For example, if a novel appliance shoots up the bestseller list on Amazon, grocers need to be ready to provide the right ingredients, meal kits and recipe cards to help consumers make the most of their new purchase.

Rewarding shoppers

While few people like grocery shopping, there is plenty that grocers can do to make the experience more rewarding. They can cross-merchandise meals so that shoppers can easily access all the ingredients they need. Or they can give users navigation tools to help them find everything they want faster. Analytics can help to improve assortment planning so that physical space is freed up that can be used to provide interactive experiences, cooking demos or tasting kiosks.

Data from front to back

Making better use of data for consumer insights also requires a data-driven approach in the operations that can support more predictive capabilities. So that means, for example, a digitally enabled supply chain enabling end-to-end visibility that eliminates waste through excessive inventory. And with inventory optimised, consumers get what they want faster and grocers can respond more rapidly to changing trends.

Overall, grocers need to start feeding their success with data. They have everything they need to get to know their customers better. Data offers them the opportunity to go beyond seeing what’s in shoppers’ baskets. By collecting and using the right data they can start to see what’s on their minds. And give them what they want, when, how and where they want it.  

What’s Hot on Essential Retail?