JACKSONVILLE, Fla. -- While the convenience-store channel has changed radically since its beginnings and evolved into many different business models, grocery stores have changed very little since the 1930s, when they revolutionized how consumers shopped for food, with only incremental developments.
“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, senior vice president for consumer packaged goods (CPG) sales and marketing agency Acosta, in a recent report, The Revolution of Grocery Shopping.
“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,” he said.
The report highlights five megatrends affecting grocery, but as competitors, convenience-store retailers also need to leverage these trends, as well.
Click through to see the five megatrends ...
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.
- Shoppers rank fresh produce (89%) as a more important feature than competitive pricing (86%) and product selection (84%) 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.
- Almost half of shoppers consider leaving a store if fresh produce and healthy options are not available.
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% 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%), if it is ready to eat (66%) and healthy options (62%).
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. 60% 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% 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.
While technology has brought the supermarket to consumers’ fingertips online, there is also 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 preorder prepared foods they can pick up at the store.
- More than 40% of shoppers report buying grocery purchases online at least once a month.
While center store accounts for 70% 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% visit the dairy section at least once a week, vs. only 19% shopping in the health and beauty care (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 (OTC) 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.”
Jacksonville, Fla.-based Acosta provides a range of outsourced sales, marketing and retail merchandising services throughout the United States and Canada.