Implementing new strategies to drive top-line growth is essential for grocery retailers, but it is too costly to try to serve mass needs. Making the optimal investments for growth requires an understanding of who the customers are and what they want and how they shop. Data and analytics are critical to understanding the right pace of change and level of investment required to optimize future value propositions and drive the most efficient sustainable strategies.
Although there is no one cookie-cutter solution in implementing new strategies that take advantage of the jump in online-grocery shopping, grocery retailers need to counter the digital advantages of their tech-savvy competitors. That requires an understanding of the customer base, identifying underperforming stores and investigating why they are underperforming, applying data driven consumer-level insights to create actionable pricing, promotion assortment, and store serving plans, while identifying inorganic growth strategies and implanting new strategies and technologies.
A recent KPMG survey of more than 2,000 grocery shoppers indicated that almost half (48%) of consumers in the U.S. now do some, or all, of their grocery shopping online, while 59% are planning to do so in the future. Although there are high costs associated with getting into the online game - adding dark stores or distribution centers, picking capabilities, logistics and a digital supply chain - staying out of it and not taking advantage of the online trend, may be even more expensive in the long-run. At the same time, some retailers are performing well today with a large base of shoppers who are staying in store. While they cannot ignore the trends in the long-run, they may not need to invest as much as quickly. Understanding the dynamics of the customer base being served is critical to investing at the right pace.
Grocery retailers still have customers who shop in-store, and as consumers consolidate their shopping in brick-and-mortar shops and shift opinions as to their ‘favorite’ store, it is key to focus on a convenience offering appropriate for the retailer’s customer base. Part of the changing consumer dynamic is online research. KPMG’s survey found 68% of consumers are browsing online to compare prices. They are also browsing online to:
- Check product reviews and ratings - 57%
- Build a shopping list - 57%
- Place orders for store pick-up - 53%
- Pay during checkout - 31%
Katherine Black is an Advisory principal and Consumer & Retail Strategy Co-Lead for KPMG. For more information or to arrange an interview, please contact Andreas Marathovouniotis.