Erik WallinMy grandfather ran a store in a small town in Sweden in the middle of the last century. It was an environment free from artificial ingredients, with a wide selection of food available in season and a lot of their products were locally produced. My father was the first kid in town to try foreign flavours when they came into stock.
My grandfather was very picky when it came to securing an assortment of products that he knew his shoppers would like. This was made possible by him and my grandmother having direct contact with their consumer base. They knew everybody coming in to their store.They knew customers by first name. What they ate. What they wanted to cook. If they were bad- or great chefs. What their budget was. If they were sensitive to flavours or allergens. Even if they were pregnant!
On rare occasions, someone that they didn’t know came in to the store. They found that, just by asking a few questions, they were able to provide an outstanding shopping experience by paying attention to the needs of the consumer, rather than just focusing on selling individual products.
They had to move, and my grandfather left the grocery retail business. However, if he had the possibility of continuing, i’m sure that this way of working would have made him very successful. My father followed in is parent’s footsteps and decided to run his own store using the same mentality. Putting the shopper first. My grandparents worked hard to create an excellent shopping experience. I’m sure that if they knew I would follow in their footsteps, and try to recreate this experience in a new format, they would be proud.
Grocery retailing has changed a lot. One of the biggest changes we’ve seen in the last century is the centralisation of purchasing power. This has given retailers a huge amount of power to set the agenda for what is being produced and which suppliers will supply them with products. My father was part of this transition; leaving his store to work centrally at retailers. The meeting and dialog between store owner/clerk and shopper used to be something pure and honest. In this transition of power, the shopper experience has been suppressed.
Now, most shoppers say they buy organic. But the sales figures are telling a different story. That is about to change. Consumers are redefining grocery shopping as sales are moving online. This gives us as great opportunity to, once again, be in a position where we can create a dialog between the grocery provider and the shopper. But this time we can achieve it with all the modern benefits like quality assurance, a wider assortment of products and, of course, home delivery. We can also ensure a great price, which is always appreciated.
Within this rapidly changing landscape, shopping for groceries does not have to take place at a traditional retailer. By agile market players adding value to grocery shoppers, we are able to encourage new consumer preferences, built on loyalty from a brick and mortar infrastructure. Shoppers choose retailers who deliver the best shopping experience.
We’re all striving for convenience, that will turn shopping into a hands off, autonomous process. This is how online grocery shopping will be defined over the coming 7 years. The online competition is very tough, and it will get even fiercer. Few market players are making money. But everybody understands that there is a huge market potential, and in the end it’s a question of survival.
One of the effects we’re seeing now, is that retailers are being challenged by new entrants to the market who are changing the competitive landscape. This forces retailers to change their focus from optimizing the supply journey (supply chain) to paying attention to the shopper journey. The first step in this process is integrating features that add value to the shopper.
The chase for instant gratification is driving more consumers towards services and features that add convenience for them. The fact that retailers think they can just be online without adding any value for their customers is proof to me that there’s an ongoing reluctance or lack of understanding that times have changed. Retailers need to give us more efficient ways of shopping that are based on our personal needs. For example, providing consumers with meal suggestions, weekly menus or optimized trolley gives a personal approach which adds value to the whole shopping experience.
There are three main areas where consumer demand is really ramping up. The first is that consumers want to speed up the grocery shopping process. Secondly, there is a big push for home delivery. Finally, consumers have shown that they would like more assistance and ideas for what to cook for dinner.
One solution we’ve seen being increasingly implemented is shop by meal solutions. This caters for two of the main demands of shoppers. It speeds up the grocery shopping process by choosing meals rather than just picking individual products, and it can reduce the mentally taxing process of deciding “what to have for dinner”. In my analysis, I have seen that consumers do not want to shop individual products online. They want to buy meal solutions and recipes. This will also be the foundation for the entire grocery industry going forward.
Within three years it’s predicted that the majority of grocery shopping will be done by voice. At the moment, we’re seeing that 50% of searches made by millennials in the US are made by voice, and according to Walker Sands Future of Retail, over 40% made purchases in the last year. The use of voice searchers will be one of the biggest drivers going forward in retail.
The most important change we’ll see in grocery shopping is dinner, followed by your breakfast products (that can simply be bundled as “my breakfast”). Your smart home will simply order what is needed, along with when you are at home to receive the goods or when you want them to be delivered.
The new language between you and your devices will simply be recipes. Buy lasagne, cook lasagne, can I make a lasagne with the groceries that I have at home? It’s the most relevant and easiest way for consumers to communicate their food and grocery needs. Which leads us to the next leap in the improved shopper journey, which is integrating our hardware devices.
Next step in a five-year horizon, in a time of IOT with integrated kitchenOS, your appliances will communicate with each other. The foundation for communication will be “what’s for dinner” or “what should we (oven/refrigerator/stove) cook?”. Hence recipes will be the driver.
Today there is a window of opportunity to redefine your organisational relevance in the shopper journey. Shoppers will move towards services that add value. The one creating the best experience will be the winner tomorrow. Whether it’s a traditional retailer, brand or a out-of industry market entrant, I would bet on the ones that include and make recipes the focus of the shopper journey.
The grocery experience will be personalized in a way similar to the service that my grandfather provided to his shoppers. But in a modern packaging, with the ability to cater shoppers world wide.
Thanks for paving the way for me!
Erik Wallin
