What's Happening To My Grocery Store?

Joerg Koesters

The food industry and consumer demands about food are changing, which is having an impact on both grocery stores and the consumer products companies that sell food within them. Global retail industry principal for SAP Hybris Stephanie Waters recently shared her expert advice at the Future of Food virtual forum, discussing how these changes are affecting grocery stores and what food retailers can do to keep up with and get ahead of the trends.

Why is this topic important to your grocery store? What changes can you make that will have a big impact?

Changes disrupting the food industry

Waters says, “There’s no question shoppers’ demands and expectations are changing, and for food retailers and consumer products companies to remain relevant and succeed in a hyper-connected era, the in-store experience has got to keep up and change too.”

Previously, stores could count on consumers making their choices based on three factors: taste, convenience, and price. Consumers now look at the attributes of both products and companies. They increasingly care about safety, health, social impact, transparency, and experience when making food purchasing decisions. Stores need to adapt to this trend. Waters focuses her attention on the consumer’s experience of the grocery store.

The store experience includes factors such as the layout of the store, brand interaction, and personalized engagement. Why is it important to focus on your customers’ shopping experience? It’s because consumers today have more food purchasing options that compete with grocery stores, especially with the rise of e-commerce stores, than ever before.

How grocery stores can adapt and shine

How can your store stand out to customers with increasing food options available to them? It’s important to find ways to offer an individualized experience. Your store can use technology to learn more about your customers, including what they are doing and what they might do.

Take the example of a friend shopping for an apple pie. When she starts searching for a pie, the friend is bombarded by choices from e-commerce stores, brick-and-mortar stores, and alternative options, such as subscription services.

With this scenario, how could your company catch this friend’s eye? Through technology, it’s possible for your store to connect with consumers based on their Google searches. Based on the friend’s search for apple pies, your store could send her an email encouraging her to stop by the bakery for a pie kit with ingredients and an easy-to-make recipe. Your store could also find these opportunities for connecting when someone is searching on your website, on your social media pages, or even in your store.

Waters explained that it’s also important for your store to reach out to certain demographics. For example, your store could help families with their grocery shopping by creating shopping list tools for mobile devices or by giving them the ability to conveniently purchase goods online and then stop at the store and pick them up. As another example, stores can offer new moms subscription services for baby goods.

Younger generations are another demographic to reach, with millennials being a key group of focus. One study shows that more than 60% of older millennials (ages 26 to 34) relied on a mobile device for planning before grocery shopping, as well as during the shopping trip. In addition, a significant portion have ordered online using a mobile device. It’s essential for stores to have a simple, feature-rich mobile experience for this group. But overall, Waters points out, millennials care the most about cost. Grocery stores can satisfy this need through loyalty programs and digital coupons, especially ones that are mobile device-friendly.

Retailers shouldn’t ignore Generation Z, which already has strong purchasing power. This group tends to make the bulk of its purchases online and look for convenience first. One way to reach them is to make it convenient to buy through your store with a mobile device.

Grocery stores will need to continue adapting and changing to fit shifting consumer demands. Learn more and join our broader discussion on changes in the food industry by watching the full replay of Stephanie Waters’ virtual session in our SAP Future of Food Forum series.

About Joerg Koesters

Joerg Koesters is the head of Retail Marketing and Communication at SAP. He is a technology marketing executive with 20 years of experience in marketing, sales, and consulting, Joerg has deep knowledge in retail and consumer products, having worked both in the industry and in the technology sector.