How will delivering groceries change the grocery store format of today?
In grocery retail, all eyes are on the prize of capturing the online grocery shopper. With everyone working overtime to get the last-mile delivery logistics working, they are overlooking the bigger opportunity right in their store aisles–make the in-store grocery shopping experience better. Most Americans still like to shop in-store for groceries
Of course, Amazon is way out in front with an estimated share of the online grocery market with full integration. Most recently Amazon introduced free two-hour grocery delivery from Whole Foods for its Prime members in some trial markets and plans to expand to some locations. Amazon’s grocery sales grew a lot more. Yet while no one disputes that online grocery is a growth market and will take more share away from brick-and-mortar retail, the biggest opportunity today and tomorrow might remain in the physical store.
A new study by Morning Consult reveals that a majority of American consumers are resisting the siren call for online shopping convenience in favor of the in-store shopping experience. Further, they are resistant to changing their habits anytime soon. Some 65% of consumers say they have no interest in buying food or beverages online, even when their options improve.
Surprisingly, middle-income shoppers are way out in front of the high-income shoppers in weekly online grocery purchases. By contrast of affluents shop in physical stores weekly for groceries. Delving deeper into the affluents’ feelings about online grocery shopping, the study finds that more than 50% of them still have no interest in buying food and beverage products online, as compared with those who simply haven’t done so yet and others who are holding out until the available options improve. Since the typical affluent household spends more on food than average, these are the grocery store shoppers who really matter. They remain loyal to shopping in person.
Amazon can capture the loyalty of shoppers by providing at-home grocery delivery, the future for growth in the grocery business is and will remain for the foreseeable future in the store. The fact is consumer habits are hard to break and their feelings even harder to change. Why not make their habits and feelings work for grocery retailers rather than trying to change them? Enhancing the in-store shopping experience is the bigger opportunity retailers are overlooking in their race to home delivery of online orders. And just given the differences between the way people shop online versus in-store, grocery stores have a much greater chance to entice shoppers to add more products to their carts that aren’t already on their shopping list. Impulse purchases for a sensory-stimulating products like food are much harder to resist in-store than online. By trying to push more grocery sales online, retailers are depriving themselves of the opportunity to entice shoppers to spend more in-store through attractive displays, strategic merchandising, helpful and friendly personnel and mouth-watering sight, smell and taste experiences that can only be found in-store. Just go to any Wegmans to see how exciting and fun grocery shopping can be. This is where grocery stores can really clean up.
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September 08, 2019