Last updated on August 22nd, 2016 at 10:33 am
In 1930, the first supermarket opened in the U.S., revolutionizing how consumers bought food by focusing on value and convenience. Since then, grocery stores have stayed relatively the same, with only incremental changes. Today, megatrends in the industry are catapulting the supermarket as its known today into the future, as detailed in “The Revolution of Grocery Shopping,” the most recent Hot Topic report published by Acosta, a leading full-service sales and marketing agency in the consumer packaged goods industry.
“We are at a tipping point in the grocery industry where we expect to see an increase in the rate of change,” said Colin Stewart, SVP at Acosta. “By leaning in to the major megatrends shaping the grocery landscape, retailers and brands can ensure they are in a leadership position as the industry evolves and are taking full advantage of opportunities to capitalize on change.”
Acosta’s report highlights five megatrends impacting grocery, including:
1) Health and Wellness
Consumers’ focus on healthy eating and lifestyles is more than just a fad; it is permanently shifting how they approach food shopping and, in turn, how retailers and brands must cater to their attitudes and preferences. For example:
• Shoppers rank fresh produce (89 percent) as a more important feature than competitive pricing (86 percent) and product selection (84 percent) in their grocery store experience.
• Nearly one-third of shoppers report their perception of a store skews negatively if it does not have a dedicated section for natural or organic options.
• Nearly half of shoppers consider leaving a store if fresh produce and healthy options are not available.
2) Meal Solutions
Convenient meal solutions are becoming a staple for shoppers who are managing increasingly busy lives and abandoning traditional meal rituals.
• Half of shoppers admit they decide what’s for dinner within two hours of mealtime.
• Millennials are doing the least amount of meal planning with 68 percent waiting until a few hours before dinner to make plans.
• When buying prepared foods while grocery shopping, shoppers report making their selections based on variety (72 percent), if it is ready-to-eat (66 percent) and healthy options (62 percent).
3) Millennials
Millennials are not just trendsetters. This experience-seeking, tech-adept, visually influenced group is at the root of several fundamental changes impacting the grocery channel.
• Seventy-two percent of Millennials enjoy grocery shopping vs. just 60 percent of total U.S. shoppers, highlighting the importance of fostering an emotional connection with shoppers and the growth of in-store destinations.
• Nearly half of Millennials—representing more than 10 percent of all U.S. shoppers—said they would use an app allowing them to pay for their groceries, signaling the increased integration of digital technology into the path to purchase.
4) Digital Adoption
While technology has brought the supermarket to consumers’ fingertips online, there also is a digital wave happening within the aisles of the store as evolving mobile technologies are now often part of the shopping experience.
• Nearly one-third of shoppers say they would use various forms of digital technology if it were offered at their grocery store. The most desired offering shoppers would like to see is an app that provides the ability to order items not available in store and the ability to scan items as they shop in order to bypass checkout.
• Thirty-six percent of shoppers are interested in using an app or web portal to pre-order prepared foods they can pick up at the store.
• More than 40 percent of shoppers report buying grocery purchases online at least once a month.
5) Perimeter Growth
While center store accounts for 70 percent of a store’s profit, the perimeter area is expanding its share of space, driven by the increased interest in health and wellness as well as Millennials’ influence.
• Sixty-two percent of shoppers frequent the produce aisle and 61 percent visit the dairy section at least once a week vs. only 19 percent shopping in the HBC aisles at least once a week.
• Online shopping and blurred channel lines are impacting where consumers shop for pet food, paper products, over-the-counter drugs, vitamins and beauty/skin care, further contributing to the erosion of center store.
“In isolation and especially when combined, these megatrends are driving the future of grocery shopping,” said Stewart. “It’s critical, however, that CPG retailers and manufacturers fully analyze these trends in the context of their own business and customers. With everything from advanced payment and loyalty technologies, in-store navigational apps and digital grocery tools, and even shelf-stocking robots, it’s an exciting time for the industry, but it’s also easy to get left behind.”
