Consumer behavior during the COVID-19 pandemic has prompted, or accelerated, structural changes in the way supermarkets operate and go to market. One key opportunity arising from this moment is for grocers to rethink their approach to the customer experience.
Grocers and analysts have traditionally segmented “in-store shoppers” from “online shoppers.” However, a key takeaway from Retail Feedback Group’s (RFG's) recent consumer research is the extent to which individual shoppers are now buying groceries both in a store andonline. Of the 1,400 respondents who shopped in a U.S. supermarket during the past 30 days, over 700 of them—more than half—had also ordered groceries online in that same period. This figure jumps to 61% of millennials and 66% of Gen Z, indicating that dual-channel food shopping is even more habitual among the supermarket customers of the future.
The shoppers we surveyed showed no signs of reverting to old spending habits. When asked how often they plan to order groceries online in a post-pandemic future, 46% indicated more often, compared with 17% less often. Those numbers contrast sharply with future in-store shopping plans: The same number of respondents anticipated more often (19%) as less often (18%).
So in a post-pandemic world we will have food shoppers who are able, and increasingly willing, to use a blend of physical stores and digital storefronts to meet their families’ needs. Supermarkets will need to appeal to those shoppers in totalityby integrating their customer experience across all channels. This formidable task will play out in three key areas.
In RFG's more than 15 years of tracking the grocery shopping experience, one factor has continually shown the greatest impact on customer satisfaction: whether shoppers are able to purchase everything they needed on a given visit (online or in-store). Our recent survey findings are consistent. Among all channels, 53% of grocery shoppers were highly satisfied overall if they found everything in stock. Only 33% were highly satisfied if they could not. With the supply chain issues posed by COVID-19, it’s clear to see why overall satisfaction ratings have declined precipitously, from 4.31 in 2019 to 4.08 in our recent study.
We see countless survey comments from frustrated shoppers who encounter out-of-stocks. The tone of this feedback is especially animated regarding items ordered online that are not available at the time of delivery or pickup. We have long advised grocers to work toward real-time inventory data to synchronize in-store stock levels with online item availability, and we understand the challenge this has posed for multi-channel retailers.
At a more basic level, supermarkets should examine their holistic competencyaround product availability, whether in-store or online. Can customers be given a date of availability of an out-of- stock item, and then notified by text or email or direct message with confirmation? How quickly can a replacement item fill an inventory hole? (In the past few months, I have tried numerous products because the ones I wanted were unavailable, and some of those are now preferred in our household. Bonus points if a local vendor is given the opportunity to step up and provide the product in question.) It’s a new era where distributed knowledge is paramount. Shouldn’t meat clerks know a fair amount about the supply chain, for when a shopper asks why ground beef is more expensive these days or if the store will have lamb chops back in stock anytime soon? “I don't know” increasingly signals “We don't care.”
Our recent study provides some sobering news about the perception of the supermarket service experience. On their last store visit, 39% of shoppers reported that an employee positively impacted their shopping experience. I’m quite certain that more than 4 in 10 retailers believe they provide excellent customer service, so somewhere there is a disconnect. No doubt, it’s harder to provide friendly and empathetic service from behind a face mask, and grocers need to adapt their training and service standards accordingly. Speak more slowly and clearly. Give a thumbs up to show you understand. Wear an amusing button that encourages interaction. These things have an impact.
The human service elements of the online shopping experience also show room for improvement on our survey. When asked if “My personal shopper was helpful,” 58% of respondents strongly agreed. “The store pickup staff was friendly” registered strong agreement from 62%. Are these results good enough? Food retailers need to update hiring protocols and training content for any and all customer-facing employees, especially at these newer touch points. Grocers should also look to extend the customer service function beyond their physical locations. Chat or phone support for online customers would be a great place to start. In our latest survey, 1 in 5 online supermarket shoppers reported difficulty navigating to the items they wanted. Why not turn this frustration into a relationship-building opportunity with a knowledgeable support rep?
And excellent service should broader than just having great people ready to interact with shoppers. Retailers have so much data these days, yet they aren’t using that data to really excel at service. Any store I’ve visited physically or virtually for the past 15 years should know that I only buy gluten-free products. It’s not a new habit. It would knock my socks off if a retailer sent me an email when they brought in a new gluten-free pizza dough or cracker line. Maybe with an electronic coupon redeemable in-store or online? That would be integratedservice for a winning retailer.
We learned from the great recession of a decade ago that the dark economic clouds brought in with COVID-19 bode well for value-oriented food retailers. In RFG’s recent survey, in-store shoppers gave conventional supermarkets an average 1-5 rating of 3.93 on value for the money, down sharply from 4.17 pre-COVID. Online, these retailers also lost ground quickly on perceived value—from 4.33 in 2019 to 4.05 during the pandemic. From Walmart and Target to Aldi and Lidl to Dollar General and Dollar Tree, and of course, the Amazon juggernaut, there will be no shortage of solid options for value-seeking grocery shoppers, whether online or off. To retain and grow their customer base, supermarkets will need to offer their own value proposition across the board.
Apart from just lowering prices (likely not the most viable strategy) to compete with discounters and supercenters, retailers need to improve at communicating their unique promotional efforts. In our study, we asked online grocery shoppers if sale prices were easy to identify and apply while browsing through the product pages, and the average rating (1-5, where 5=Strongly Agree) was only 4.04. One feature I’d love to see while shopping for groceries online is a filter to sort products by best value, not just by low price.
And grocers must use social media more effectively to communicate their promotions and brand messaging, particularly to younger shoppers. Consider the disconnect uncovered by our recent consumer study. Nearly all supermarket shoppers (92%) use at least one social media channel on a regular basis. However, only 29% are connected on any social channel to their primary grocery store. That’s a missed opportunity to convey not just tangible value but also food expertise, local product and supplier features, employee profiles, and community involvement.
In a world with COVID-19 still among us or in recent memory, supermarkets will need to exhibit their unique competencies to shoppers no matter where the point of contact—physical and virtual.
Doug Madenberg is a principal with Retail Feedback Group.