We are seeing that consumer reinvention of grocery shopping, driven by digital innovation, is changing the way brands and retailers interact with consumers. This is ushering in a new era in which consumers decide where and how to do their grocery spending based on how well different value chains meet their needs.
Not only does this call for a shift to better digital merchandising skills for the players in the traditional value chain, it also means that those players need to work together to serve the customer.
Where to Start?
Focus on the following areas.
1. Access your digital presence: The bar is rising all the time and it is important to keep up with shopper expectations.
> Look at how your products are presented digitally to shoppers. Be prepared; in many cases, you won’t like what you see.
>> Take stock of the quantity & quality of your current digital connections. They may not be as complete and effective as you think – it is better to find this out now.
>>> Make a clear-eyed evaluation of your digital content. Does it really serve the needs of your target customers?
2. Build better digital merchandising
Digital merchandising will be an increasingly important strategic skill because it gives the retailer and other players in the ecosystem “the ability to be present, in the context of the moment that a shopper is looking for something – and able to provide the right information and experience they need to give you dollars,” in the words of Steve Lauder1.
6 Key Strategies
Here are six key strategies to ensure your collaborative digital merchandising triggers a sale.
- Virtualize the category. Make the category easy for shoppers to access both online and in-store. Present products the way that shopper insights say people want to see them.
- Simplify the buying experience. Shoppers are increasingly looking at replenishment purchases differently from first time or occasional product purchases. How can you accommodate them?
- Drive targeted promotions to the next level. This area is ripe for collaboration. Retailers use their loyalty program data to collaborate with manufacturers and suppliers to target households based on past purchases.
- Make digital an integral part of how you do business. Align the people doing the work, build a robust contact database, analyze loyalty program data, and accelerate learning and optimization through testing and sharing…
- Focus on core customers and be “loyal” to them. These are your most valuable customers. Identify them by name or email, and devote resources to retaining them. It costs a lot less than acquiring new shoppers.
- Go after new need states & shopping occasions. Shopping occasions used to be defined in terms of interaction with the store and basket size, now digital influence and new options like subscriptions and delivery have opened the way to serve many more shopping occasions.
Today, the traditional value chain still does about 95% of the grocery business, but new digital methods and enhanced collaboration are needed to hold onto that business.
The key challenge for the industry moving forward is to change the way we look at the world. We need to look at grocery shopping the way that consumers do – which is increasingly influenced and informed by what they see on their screens, even when they are making in-store purchases.
Remember: Shoppers will determine who wins this race. Retailers and suppliers can go it alone, but in this environment, both will be more successful if they collaborate.
1 Steve Lauder, Brick Meets Click – black belt contributor