Walmart recently celebrated the 30th anniversary of its Supercenter store format launch. That’s how long shoppers have been able to one-stop-shop for sneakers for the kids, replacement wiper blades on their minivan, a weeks’ worth of food for their refrigerator—and a lot more. This particular retail customer experience has proven to be enduringly popular, so much so that Walmart now operates more than 3,500 Supercenters across 49 states.
But Walmart is far from the only large chain taking a sizable bite out of the grocery retail pie. Target’s food sales account for nearly 20 percent of its annual revenues.
The retail grocery industry has been further splintered by the proliferation of dollar stores. Consumers discovered savings at these deep discounters when the Great Recession hit. Although the economy has since turned around, many Americans continue to fill their carts there with grocery items.
Meanwhile, digital commerce has mushroomed since Amazon launched a quarter-century ago, reaching into every industry and offering practically any consumer good imaginable. While many long-established brick-and-mortar retailers have been pushed out of business by these online and big-box stores, grocers have managed to keep their doors open. Nevertheless, shoppers want and even expect grocers to provide certain conveniences associated with online shopping.
Because of this shift, many large grocery chains are now offering some virtual version of their onsite shopping experience. As this trend continues, the question is no longer whether or not grocery chains can afford to invest in digital transformation. The question is: Which specific digital transformations will allow them to capitalize on the downsides and drawbacks of the big-box retail customer experience?
The big, bad truth of the big-box shopping experience
Economies of scale may look good on a balance sheet, but for consumers, the lower prices advertised by big-box stores can carry hidden costs. Namely, the lack of personal service and loss of identity they feel when navigating these sprawling, warehouse-like spaces.
The standard big-box customer experience entails hiking through acres of a crowded parking lot before shoppers can even begin browsing the aisles. And browsing means zigzagging from one department to another, often covering several football fields’ worth of sales floor.
While big-box retail is a defining feature of the suburban landscape, dollar stores tend to be more neighborhood-orientated. They occupy standalone buildings or strip malls, making them more attractive options for shoppers looking to make a quick, get-in-and-get-out excursion. The trade-off? Dollar store inventory can be lacking both in variety and quality. Consumers may be willing to accept those limitations in exchange for a steep discount, but they do so knowing they will still need to make another stop on their shopping run.
Small can be beautiful—provided you lean into it
Consider comparison shopping. Deciding on the best grocery purchase can come down to touch and feel. You simply can’t check the marbling on a cut of beef or squeeze an avocado to check for ripeness via a screen. “Going to the store” isn’t always an inconvenience or a burden. It can be an essential step in the grocery buyer’s journey.
When combined with smart price-matching policies, this experiential element can draw new customers into your store as well as giving you more face-time with your existing customers—time that represents opportunities to upsell them on the non-grocery items on your shelves.
Picking and choosing the right innovations
Optimizing endcap and sidekick displays and offering a greater variety of products and brands are time-honored solutions to differentiating yourself from the competition. But Phononic’s 2019 report on what consumers now want in their grocery store experience is a heads-up for retailers large and small.
Consumers in 2019 want a technology-facilitated shopping experience. At the very minimum, grocery stores must serve customers with a mobile-friendly website that will rank locally on Google. They also need to offer digital buying, delivery, and payment options.
Self-checkout kiosks and scan-and-go options are now integral components of the retail industry’s infrastructure. And that infrastructure is in a constant state of renovation. For example, Amazon’s recent purchase of Whole Foods is now kicking up the pressure on other grocers to offer click-and-collect and home delivery.
Big-box stores already utilize these technologies, but grocery chains can get onboard by leveraging their direct knowledge of their customers’ behaviors and preferences with hard data mined from their POS and other existing digital implementations.
That business intelligence can then help grocery retailers develop a unique, appealing shopping experience, one that includes everything from personalized shopping recommendations to queue-busting checkout options.
Beat the big-box guys by modernizing your customer’s shopping experience
Digital transformation of grocery stores isn’t always easy, but it’s necessary if you want to deliver on the conveniences modern shoppers have come to expect. That’s why you need the support of a trusted partner. At TRUNO, we specialize in innovative retail technology solutions that let any grocer stay competitive with the brick-and-mortar goliaths, the dollar stores or the online retailers. From configuring and setting up a new checkout solution to integrating your various back-office systems, we can help you provide the digitally sophisticated in-store experience modern customers are looking for.
