The most profitable and successful grocery business owners nationwide are those that are skilled at developing new ways to stay competitive and relevant. Whether it’s adapting quickly to changes in shopping patterns, spotting shifts in consumer preferences, or leveraging technology in new and innovative ways, these stores are at the forefront of changing times.
In our first two blogs in this three-part series, we’ve covered some of the most significant trends and changes that shaped the grocery industry in 2021 and those we expect to be most important this year. But what about beyond 2022? We’ve got you covered. Here are some forces likely to transform the grocery retailing landscape in the years to come.
Widening assortments beyond grocery.
Leading up to the start of the global pandemic, research shows that shoppers were making more frequent trips to the grocery store and shopping in-store at a wider variety of retailers. Since early 2020, though, shoppers have been making fewer trips to the grocery store each month, shopping at fewer stores and consolidating shopping trips whenever possible. In other words, they’re shopping with a purpose. Today, the average number of trips per household to the grocery store each month remains 65% below pre-pandemic levels and is likely to remain that way for years to come.
Some initial studies show that widening assortments that include items like clothing, home decor, tools and a host of other types of merchandise could do well in grocery stores. But hitting the mark with product assortment beyond food can be challenging. UNFI Professional Services can help you leverage data to strategically expand your store’s non-food product assortment with the greatest odds of success.
Smart-Shelf Technologies
Digital transformation in the grocery industry will certainly accelerate in the years to come because of the increase in efficiency it can bring to individual grocers. Weight sensors for inventory management, digital price tags, and devices that gather in-store analytics and guide shoppers on their shopping journey are just a few examples of smart-shelf technologies. These technologies are likely to move well beyond emerging ideas that don’t yet justify the investment to become must-have tools to remain competitive.
Imagine a shopper moving through your store with their smartphone and getting a personalized and pleasing guided experience with smart-shelf technologies that work in partnership with your store’s app. Or attracting shoppers to certain products with a video or digital display. Or how about adjusting prices based on market analytics on many products throughout your store in seconds instead of hours or days? It’s all possible with new technologies that will become more attainable and affordable in 2023 and beyond.
Cost-cutting tools for online grocery
Ordering groceries online is quick and easy for consumers. But fulfilling online grocery orders—that’s another matter entirely. Whether for pickup or delivery, successfully fulfilling online grocery orders is complicated and costly for grocers operating on already thin profit margins. Grocers must hire, train, and retain people to pick, pack, and stage grocery orders and also deliver orders to shoppers. Labor shortages and the rising cost of labor have made it even more costly and complicated. But even after the pandemic is over, online grocery is here to stay and that’s what’s making automated methods of fulfilling orders more attractive than ever.
Finding automated ways to streamline the fulfillment process and make it more profitable will take center stage in 2023 and beyond. Robots, drones, and driverless trucks are all being tested now in cities nationwide to gauge how well they help streamline the grocery pickup and delivery process, and the early indications are promising.
In addition to automation, smart partnerships that leverage existing logistics networks can help independent grocery businesses deliver the online shopping experience shoppers are demanding.
Digitation, digitalization and data
Are you leveraging data to personalize shopper experiences, inform your business strategy, manage your supply chain, plan assortments, cut costs, and become more efficient? Next year, it will be apparent which stores are and which stores aren’t using data to their advantage. Take the steps now to be able to fully harness the power of data in all areas of your business in the years to come. We’ll show you how.
Augmented reality
AR takes both online and in-store shopping to a whole new level. In-store, a grocery app with augmented reality can help guide shoppers through the store, highlight specific products, offer coupons/promotions, and help them find, compare, and learn more about products. The result: Greater customer satisfaction and larger basket sizes. Online, AR can help guide shoppers in new and exciting ways. Shopify estimates that online interactions with products having AR content showed a 94% higher conversion rate than products without AR. Within the grocery industry, AR is definitely an emerging technology and trend, but it’s likely to go mainstream within a year.
Keeping it human.
There’s no doubt technology will become increasingly critical in the years to come for grocers. But it’s worth mentioning that there’s absolutely no substitute for a happy and helpful employee answering your store’s phone, helping customers find what they need in-store, or cheerfully loading up a customer’s car with groceries.
We live in an increasingly digital society, for sure, and there’s no doubt that consumers want the convenience and time-saving benefits that technology can offer. But when shoppers need or want human interaction in the retail setting, they want the experience to be top-notch—friendly and helpful. And if shoppers don’t get it, they’ll go elsewhere. The key to success in 2023 and beyond lies in delivering an exceptional customer service experience from both a digital AND human perspective.
So, now what?
If it sounds like the stakes are high, they are. The coming years will be critical ones for independent grocers, and making smart decisions with your financial resources has never been more important. At UNFI Professional Services, we can help you stay ahead of the curve and make smart decisions to stay relevant and competitive in your market. Explore all of what we have to offer—visit our newly designed website at Services.UNFI.com.
Don’t miss the first and second installments of this three-part blogs series, A year of change in the grocery industry and What’s in store for the grocery industry in 2022?.