Report: Supermarkets gain favor, but alternative channels still a major threat
- The latest U.S. Shopper Trends report from the Food Marketing Institute finds that supermarkets' role as shoppers' primary grocery destination has finally stabilized. Figures show this preferred status has declined steadily over the past decade, with 61% of shoppers saying they mainly shopped at supermarkets compared to 47% last year. This year, that figure rose to 49%. However, FMI notes, the continued growth of non-traditional channels blunts the significance of these findings. "Remaining primary does not mean maintaining a steady share of grocery trips," the organization noted.
- The report also found that brick-and-mortar remains shoppers' preferred channel. Nearly 60% of respondents say they visit physical stores “almost every time” they shop for groceries.
- FMI also finds that grocery e-commerce has evolved from primarily being used by millennials to older age cohorts, who rely mainly on click-and-collect services versus delivery. Digital users overall are now more open to ordering fresh, perimeter food online than they were before, FMI found.
The supermarket industry seems to have figured out how to steady itself against a growing threat of other food retailers – at least for now. After more than 10 years of declining as shoppers’ primary food source, supermarkets have rebounded slightly. There is still work to do to get back to 2005 numbers, however, when 67% of shoppers identified supermarkets as their primary store.
Perhaps the biggest opportunity for supermarkets to continue this recovery is in marrying their online and brick-and-mortar presence – enticing consumers to use both channels interchangeably and creating more loyalty in the process. By offering that "anytime, anywhere" convenience, grocers can harness the 6% of shoppers who told FMI they have no primary store. Six percent may not seem like a big number, but it is more than all other channel except for supermarket and supercenter.
It's a delicate balance, to be sure. Shoppers noted in the report that they rely on brick-and-mortar to “deliver their preferred experience of choice, quality and connection.” A majority of millennials even note that they prefer in-store shopping. But online shopping will continue to grow, especially as other demographics besides millennials become more comfortable with the channel. A Food Marketing Institute/Nielsen report estimates that online grocery sales will reach $100 billion by 2022.
One way grocers can bridge these two channels is with their fresh offerings. Shoppers identified high-quality fruits, vegetables and meats as the most important attribute in selecting a primary store. At the same time, they’re gaining more confidence in ordering these types of items online. Grocers can further build trust by promoting their perimeter offerings online and guaranteeing the same quality shoppers expect from their in-store perishable purchases.
Further underscoring the need for grocers to find that online and in-store synergy, the report states that online customers tend to spend more and are “more engaged” in household shopping. However, they still make in-store trips and are craving more guidance from their grocers on how to approach nutrition and navigate the growing number of food options in general. This offers incentive for grocers to position themselves as a food authority, offering experiences such as in-store tastings, while extending that authority online with recipe ideas, for example.
Shoppers have more options at their fingertips than ever. It’s important for grocers to understand their needs and offer them solutions. The trick is meeting them where they are, and right now that is everywhere, and any time.
- Food Marketing Institute U.S. Grocery Shopper Trends 2018
Follow Alicia Kelso on Twitter