How to reach the savvy grocery store consumers
Co-founder and CEO of Local Express.
Shoppers are focused on stretching their money, and brands need to prepare their wares and prices accordingly.
In 2022, McKinsey reported that customers increased their search for the best promotions (29%), increasingly switched to cheaper products (27%) and bought more privately owned products than well-known brands (21%).
However, this can result in grocers being overstocked with expensive items while promotional items fly off the shelves. As a result, stores need to find flexible ways to help their customers save money if they want to retain today’s strategic customers while optimizing overall inventory.
Let’s take a look at what stores and brands can do to keep up with savvy consumers.
Private label brands occupy a leading position
A Grocery Dive report (citing a Numerator study) found that while low-income shoppers “have consistently said price trumps brand name,” in 2022 more middle- and high-income shoppers have a positive opinion had from trademarks. The Numerator study found that 55% of consumers agreed that the value of private label was “excellent or above average”.
With many consumers switching from well-known to private label (especially for staples like canned vegetables, cheese and baby products), retailers need to be careful to create quality and value here. You also need to make sure these items are on the shelves. The good thing about private label is that retailers have a closer relationship with the supply chain, which increases their control over data and stock levels.
However, each private label also competes with the private labels of other retailers. Value products can’t be the only reason customers come back; Quality and marketing count. To align these goals, better and faster data is needed to enable grocery retailers to make the right decisions.
Have a promotion – but be careful where you place it
Hyper-personalization is about reaching each individual and providing unique offers. That’s why it’s imperative for retailers to think about their digital channels, in-store communications and loyalty programs to ensure everyone gets the best deal to keep them coming back.
A report by Progressive Grocer cited a 2021 Pew Research Center survey that found that “25% of seniors aren’t using the internet and 39% don’t have smartphones,” meaning they are effectively unable to use online services . Likewise, 43% of lower-income adults do not have broadband internet access at home.
Integrate offers for loyalty cardholders without a smartphone via kiosks and circulars. This means users can access in-store discounts a day or weeks in advance via their newsletters, giving them time to plan their store. Additionally, shoppers aged 50+ account for 54% of consumer spending, so they’re not a market to miss.
Grocery retailers can start looking at the types of promotions customers are redeeming by channel. For example, they may find that in-store discounts on fresh produce are more successful because customers like to personally select those items. However, a Princes survey found that around a third of UK shoppers are increasingly buying canned food. That means two-for-one on premium or branded canned food can both attract shoppers to stores and increase online sales — while helping grocers sell their tagged items.
As stores collect more data, they can recognize patterns and target their promotions in a more personalized way. This is where the future of food retail is headed.
Master your inventory strategy
By being clear about your demand and sharing real-time data with your suppliers, you can avoid stock shortages. It is becoming increasingly important to monitor inventory management, point-of-sale (POS) systems, delivery services and loyalty systems side by side. Holistic analytics can help you understand which products are doing well, which products are low on stock, and who wants them—to enable prediction and inform your strategic decisions.
For example, if you know that 59% of your customers are shopping in store at the end of the week, you should ensure that full inventory counts are taken by Thursday morning. Grocery retailers need to verify in-store and online product sales and communicate with their suppliers. They need to factor in warehouse-to-store lead times and request their orders for Thursday morning delivery. Options include sending daily sales updates to suppliers to prepare them in advance with items for restocking, or deciding to overlay certain products based on past weeks’ sales.
Buyers are increasingly choosing where to get the best deals, and real-time data can enable this business model. Retailers can preserve, protect and optimize the use of this data through the use of various AI analysis tools. Increasing internal syncing is an excellent place to start if you’re considering automating your analytics but aren’t sure where to start. Create reports that review online and in-store sales in one place, and set up automatic notifications when products reach their minimum inventory limit. You have access to valuable information; it’s about finding an easier way to use it.
As customers become more strategic about how they shop, where they go, and what promotions they look for, stores need to be mindful of their choices. Everything is connected – retailers need the flexibility to respond and adapt to changing customer patterns. Increased brand collaboration and holistic data analytics with instant automated alerts can help them meet customers’ changing demands without compromising their bottom line. Systems that are easy to deploy and offer high ROI can help grocery retailers operationalize these insights.
The Forbes Technology Council is an invitation-only community for world-class CIOs, CTOs and technology leaders. Am I Qualified?
follow me LinkedIn. Cash my website.