The Future of Grocery Shopping: Digital Revolution
The world of grocery shopping looks very different from the one we knew a decade ago. Ordering groceries online is easier and more popular than ever before. Widespread delivery is now offered by virtually every grocery store, either from the retailer itself or from a third-party delivery service like Shipt or Instacart. Curbside pickup has also increased, with many retailers heavily promoting this option even before COVID-19 ushered in a world of social distancing.
These options give consumers the freedom to shop as they please, but they are only the beginning. I believe that in the future, shoppers will embrace a mixed mode of shopping a hybrid of digital and in-store grocery experiences. Instead of sticking to one format, they will become comfortable with the idea of seamlessly moving from one to the other as their needs arise and retailers will adapt to these growing expectations.
More Entrants, More Options
Grocery shopping is being redefined as retailers look for new ways to offer value to their customers. Big box stores are evolving with new grocery solutions. Walmart recently announced an unlimited shipping service, similar to Amazon Prime, and Target now offers delivery via its own subsidiary, Shipt. Amazon also entered the ring by launching AmazonFresh for delivery, attempting to pilot Amazon Go stores for quick shopping without a checkout and opening “dark stores” for Whole Foods that mostly serve as hubs for grocery delivery.
Most of these developments occurred organically as retailers, both physical and online, began to realize the potential of mixed-mode shopping. However, the need for eCommerce solutions skyrocketed at the onset of COVID-19, which led to stay-at-home orders, crowded stores and reduced operating hours. It was a period of uncertainty that, to some extent, has continued to this day. Grocery operators understood their vital role in the marketplace and quickly rose to the occasion, ensuring that both the customer, and store associate experiences, were as safe as possible.
And now that so many individuals have tried purchasing groceries online, they will be more likely to use it going forward. Dairy products are popular on eCommerce, along with produce, frozen foods and most other items that are primarily sold in physical grocery stores. I expect this unprecedented transition will continue to transform how, when and where groceries are purchased.
The Digital Revolution Is Really Starting Now
While the current climate may have inspired more consumers to try new digital features, the grocery evolution has been developing for some time. In addition to pick-up and delivery options, coupons have evolved from their humble beginnings as paper clippings that were mostly delivered via free-standing inserts (FSIs). Many coupons are now accessible via mobile devices, both from retailers and CPGs. This shift has undoubtedly made an impact on FSIs, which have been declining for several years, including a 12.4% drop in print promotion activity during the first half of 2019 alone. COVID-19 may have also hurt FSIs after some retailers, such as BJ’s Wholesale Club, announced that they were temporarily suspending the use of paper coupons to prevent the spread of the virus from physical surfaces.
I believe the shift to digital will further hasten now that Shipt offers digital coupons for groceries and household essentials. This was a first for the delivery service and represents a significant change and a step forward in how the industry operates. It is another way for promotions to be completely digital and contactless. They are fast, convenient and especially valuable in the current climate.
As a result, consumers will now be able to save on essential purchases—whether they choose to shop in-store or online. The partnership will also allow retailers to create better omnichannel experiences and enable CPGs to reach millions of additional customers while fostering a new avenue to drive eCommerce growth.
It’s a strong reminder that collaboration is extremely important in this industry. Retailers and CPGs now need to work together to provide the value that best serves their mutual customers.
No More Limits
The future of grocery shopping won’t be limited to one way of buying food and other essential items. There will continue to be an expanding array of digital and in-store options that form the perfect hybrid shopping experience.
Consumers will embrace it, choosing delivery when they are after comfort or unable to visit a store in person, and rely on pickup when they want groceries quickly but don’t have the time or desire to go inside. For those who want to pick out items by hand, digital coupons and contactless payments have made in-store shopping more inviting than ever. Better still, digital coupons also allow shoppers to save when ordering online. And with an expanding array of grocery options, shoppers have been given more flexibility while CPGs now have more opportunities to reach their customers.