Amazon to Buc-ee's, Eataly and Edeka, Pinduoduo and Rappi, Wegmans and Zingerman's ... What do grocery consumers want, and what's the future of grocery retailing? - Peter Fisk (2024)

April 14, 2024

Amazon to Buc-ee's, Eataly and Edeka, Pinduoduo and Rappi, Wegmans and Zingerman's ... What do grocery consumers want, and what's the future of grocery retailing? - Peter Fisk (1)

When someone says “grocery store,” do you instantly imagine fluorescent-lit, metal-clad buildings with soulless, towering aisles? Doing your grocery shopping is probably the least inspiring thing that you can do.

But it doesn’t have to be. What if there were stores somewhere on this planet that would stop you in your tracks to look up from your shopping list in awe and wonder?

Amazon to Buc-ee’s, Carrefour to Delhaize … Amazon continues to embed technological innovation into every aspect of its online and physical experiences, going far beyond Go. Buc-ee’s might be a gas station by definition, but is an incredible grocery store, and has just been ranked the world’s most consumer-centric brand. Carrefour redefined its entire business model around being digital first, but still a physical experience.

Whatever you think of Marks & Spencer, it’s still a great store, from the Flower Shop to Wine Shop, own-brand innovative product ranges and curated global inspirations. At Booth’s the upmarket supermarket supermarket in northern England, deli counters have been extended, hot food to go has been added and a concession partnership with the ingredients store Rafi’s Spicebox has been expanded. Customers can ask the Rafi’s employee for spice recommendations or recipe ideas, which are then paired with Booths products.

Wegmans frequently tops polls as America’s favourite grocery retailer. One of the pillars of its success is the offer of a full-service restaurant in each store, making it easier for shoppers to fit grocery shopping into their daily or weekly schedule. In addition, many of the dishes on offer are created using the Wegmans range, with the recipes available on the website or app. Stores have also been designed to resemble European open-air markets, but with extra-wide aisles and even the ability to chart a course through the store using the app or online after creating a shopping list.

Freshippo, owned by Chinese e-commerce giant Alibaba, prides itself on catering to contemporary lifestyles by fully embracing in-store, click and collect, and delivery. The Freshippo app elevates the shopping experience greatly – scan an item and the app provides recommendations on suitable food and drink pairings and then directs customers to the suggested item in-store, sends it to the till already packed or even sends it directly to the shopper’s home.Mercardo Libre continues to diversify into superapp-style categories and dominate in Latin America. And Zingerman’s, the cult grocery and food stores from Ann Arbor, continues to have a fanatical following.

  • Pinduouo, shopping together, more savings, more fun: case study by Peter Fisk
  • Trader Joes, local food stores with a cult following: case study by Peter Fisk
  • Zingermans, a passion for food, and for people: case study by Peter Fisk

While economies are uncertain, and cost of living concerns pervade, it’s not all about price, or at least not for everyone. Latest global consumer research show that the younger and older consumers are the fastest growing segments. Young people are driven by aspiration, influence and wellness. Older people are driven by making the most of life, experiences and relationships. Which leaves the “squeezed but splurging” middle, some driven by price but still treating themselves. In general sustainability has given way to a preference for wellness, particularly amongst the young. One thing is for certain, the retail brand which tries to be average for everybody, ends up being special for nobody.

I always love a trip to Trader Joe’s when in the USA. Less of a chore, much more of an experience. I’m inspired by Coupang in South Korea, particularly its focus on technology as demonstrated by its super fast-est home delivery, and China’s incredible Pinduoduo. I love a trip to Eataly, a temple of Italian food, to buy, eat, cook, and savour. Of course, you should include q-commerce brands like Rappi, Grab and many others too as competitors, because they are in the customers eyes, offering a local convenience-driven grocery service. Or even take adjacent markets like HelloFresh and Blue Apron too.

At Edeka in Germany, even the floor tiles are working to tempt shoppers. In some stores, they advertise the availability of fresh food to go such as kebabs – and direct customers towards their whereabouts at the deli counter. Stew Leonard’s in USA takes inspiration from Disney. Singing animatronic characters, mooing cows and train sets placed overhead all play into the family-friendly ethos. “When you go shopping, you want your kids to enjoy it too,” says Chase Leonard, a third-generation member of the Leonard family.

Or if you want to see real innovation, in the most conventional grocery formats, take Spar’s flagship store in Hungary. The design, by LAB5 Architects, is as modern and as chic as it comes. If you visit here, you’ll quickly find yourself in a futuristic wooden wonderland. It feels like traversing through a space-aged cave, with wooden slats forming arches and tunnels, as well as stands for displaying goods.

Some of the most obvious trends in 2024 include:

  • Improving margins: Retailers are focusing on streamlining operations, optimising supply chains, and enhancing inventory management to improve efficiency and reduce costs
  • Smarter marketing: Retailers are leveraging their digital platforms to offer targeted advertising and promotional opportunities to brands, creating new revenue streams
  • Personalised engagement: Adoption of technologies like AI, automation, and data analytics is driving personalised customer experiences and operational enhancements
  • Healthier products: Consumers are increasingly prioritising health-conscious choices, leading to demand for organic, sustainable, and locally sourced products
  • Sustainable operations: Retailers are committing to eco-friendly practices, addressing climate change, and promoting responsible sourcing.

Challenges abound amidst uncertain economic conditions:

  • Loyalty without losses:loyalty doesn’t mean cheapest prices, people are engaged by emotions, loyalty cards are less about points collection more about special price treats, and services beyond products.
  • Space and selection: while retailers stick to good/better/best segmentation of products, curation is even more valued, a carefully chosen limited range of brands and speciality products.
  • Reducing footprint: Retailers face pressure to demonstrate genuine commitment to sustainability and reduce their environmental impact.
  • Attracting staff: The industry grapples with workforce shortages, impacting store operations and customer service, linked to a shift in skills required with increasing use of tech.
  • Resilient supplies: Disruptions in global supply chains require innovative solutions to maintain smooth operations, rethinking sourcing options, and business models.

Opportunities to embrace in 2024, as well as beyond:

  • Doing more for you: Retailers can capitalise on the rising demand for health-focused products by offering curated selections and wellness services eg pharmacy, fitness classes, nutrition advisors, often using their own trusted brand.
  • Digital-physical fusion: Combined online pre-planned and in-store top-up shopping experience, digital navigation, contactless checkouts, kerbside pick-up.
  • Personalised and predictive: Leveraging AI and other technologies can enhance productivity, improve customer experiences, and drive growth.
  • Transactional to experiential: From shopping based on transactions to experiences, more social, more destination-driven, more sensory, more participative, more gamified, more added-value.
  • Mass to micro: Personalised offerings, local sourcing, micro fulfilment centres, and community engagement create opportunities for retailers to connect with consumers.

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Amazon to Buc-ee's, Eataly and Edeka, Pinduoduo and Rappi, Wegmans and Zingerman's ... What do grocery consumers want, and what's the future of grocery retailing? - Peter Fisk (2024)


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