In a study by Hero Digital about consumer spending, one thing that stands out is the fact that consumers are motivated by specific priorities when they do their grocery shopping.
For the in-store shopper, convenience has always been what drives a customer to shop. In other words, she or he would first look for a convenient location. Then, once in the store, the products have to look great, there has to be an adequate selection, and there has to be the ability to shop in store or take advantage of an on-line option as well. However, quality is also essential. The shopper today looks for trustworthy brands that give the shopper the highest quality products. The report also suggests that it has to be an ethical business that gives customers confidence in making purchase decisions.
All of this means that a store cannot rely on a convenient location alone and must also deliver the shopping experience its customers seek. Essentially, the store has to care about the customer by constantly improving quality and service. In addition to caring about the customer, the store management should care about the associates as well, because their contentment reflects in better service to the customer. Associates who are happy with their job are more likely to show warmth and friendliness and project a more helpful attitude.
Bottom line, stores that are easy to shop with trustworthy brands which reflect highest quality products are best positioned for success. Those stores that are constantly improving and give customers a feeling of care get the highest rating.
A deeper dive into the data shows that building customer loyalty is a bit complicated. Each generation has unique priorities that lead them to become brand loyal. This report shows that customer loyalty changes with age and personal experiences. For instance, this report says that 20% of Boomers rank empowerment and distribution as top factors that create positive customer experiences. While 50% of Gen Z consumers rank price and brand stature as top factors shaping their customer experience, 50% of Gen X consumers rank ease and availability as their top priorities. Among Millennials, on the other hand, 20% rank ease and availability as the most important factors when recommending a brand.
It is important to look at grocery store performance by age group and the value of such customer data isn’t just for those in the grocery business. It is also a cue for other retail businesses on how the same generations act in general merchandise stores. It is likely to be very similar, since their experience in grocery stores often translates into similar attitudes elsewhere. After all, all customers make shopping – and purchasing decisions – based on those same factors of product quality, price value, and selection, along with a shoppable store layout and good (and helpful) service.
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A long time ago, I learned that grocery store innovations often translate into new systems for general merchandise retailers as well. Grocery stores have smaller profit margins and must find new ways to cut corners in order to have a profitable performance. Whether it is in their supply chain or in the front of the store, it has to pay off. That same operating philosophy is something every leader across the entire retail industry should adopt.
This blog has focused on the in-store experience, but the role of online shopping cannot be ignored. Today, 43% of Millennials shop for their groceries online. According to the study, a +21% growth is forecast for the coming year. Instacart has about 20% share of the on-line business which indicates that customers who shop online want quick delivery of their choices. Grocery retailers will need to adapt these same customer priorities (for convenience, quality product that is readily available and easy to find/shop) to their on-line store as well.
POSTSCRIPT: Whether it is Amazon’s