It's about meeting customers how and where they choose to shop. Are these changed shopping behaviours here to stay?
By Samantha Osborne - General Manager, Cartology NZ
"Grocery shopping is the one constant in our lives. Regardless of age, gender, affluence or location, everyone must eat and by inference, everyone must buy food. Its omnipresence means that supermarkets have and always will be a mirror in which societal shifts are reflected. Shifts such as a pandemic, growing climate awareness, financial crises, tech adoption, the list goes on.
Behavioural disruption has triggered new fulfilment methods, with more than three out of four consumers changing the way they grocery shop due to the pandemic. They are shopping faster, at quieter times and now a staggering 50% of online grocery shoppers first grocery shopped online less than a year ago.
While many will revert to old habits, enhanced digital literacy and the growing desire for ultra-convenience ensures that new and enduring shopping habits have been formed.
30% of shoppers are now omnichannel, shopping both online and in-store at least once a month. These shoppers are more open to the discovery of new products and have higher levels of shopping enjoyment, compared to those who shop in-store or online only.
We’re now seeing two types of customers: the functional shopper preferring the online shopping environment with its efficient and ordered nature, while the emotional shopper seeks the in-store experience for inspiration, product discovery and ease of navigation from aisle-to-aisle. These needs aren’t mutually exclusive and it is up to brands to show up in the right way, at the right time to meet the customer’s prevailing mindset. Kiwis also miss taking time to enjoy shopping as a social, relaxed and fun occasion, with 28% missing people and contact; 18% missing feeling relaxed and taking their time to shop, and 15% missing browsing and discovering new products.
Since the pandemic, we’ve seen grocery shopping become even more important as a source of interaction, for inspiration and in creating a sense of connection and belonging.
Omnichannel allows customers to tailor their shopping behaviour to suit their mindset.
During the beginning of the pandemic in 2020, 1.36 million Kiwi households made an online purchase for the first time and we fully expect online shopping frequency to remain 28% higher than before the pandemic. Customers have digitally upskilled, with brands and retailers innovating to meet these customer needs. Rapid digitisation has dramatically impacted the way we shop for food; there are now multiple ways to plan, order and deliver your grocery shopping. Traditional paths to purchase have merged and heightened consumer expectations are fuelling the need for a frictionless, seamless and consistent online and offline customer journey and experience. This means that shopping has become a ‘choose your own adventure’ across in-store, online, and click and collect.
Digital literacy has also rapidly advanced customers’ expectations of brands. Customers crave convenience and are looking to be able to transact across multiple categories and retailers at once. The explosion of e-commerce has cemented omnichannel as the way forward. It’s no longer about in-store versus online, it’s about meeting customers how and where they choose to shop.
HOW CAN MARKETERS BEST REFRAME THEIR IN-STORE ACTIVATIONS?
Everything and nothing has changed about the way we shop. Shopping behaviours remain extremely habitual, it’s embedded in our lives When we think about grocery shopping, we still think it’s about fulfilling basic needs. It’s a simple mental picture that has remained for years, however, is at odds with the complexity of how we interact with supermarkets today.
The store itself plays an important role in our day-to-day lives. It’s a community centre, a theatre for brands and more. In-store is still considered the ‘proper’ way to grocery shop, with 62% of shoppers agreeing with this statement. 87% of Countdown sales are still being made in-store and one in five love to grocery shop. Almost 74% of customers say in-store is still their preferred way to shop.
Customers value sensory in-store experiences now more than ever before, such as the ability to select their own produce and to interact with team members. Those who love grocery shopping are much more interested in discovering new products, but they are also more likely to confidently shop online for groceries. Even for those who regularly shop online, half would still prefer to shop in-store, especially for smaller shops. Despite a 53% increase in e-commerce, in-store is still the engine that drives the grocery shopping experience.
ARE IN-STORE EXPERIENCES GOING TO BE REPLICATED ONLINE BY SHOPPERS?
Customers are applying the behaviours learned in-store when shopping online posing an opportunity for brands to translate the best of in-store into a digital experience.
In full control of their journey online and offline, customers are seeking what they want, at the moment they want it. Despite the push and pull between online and in-store, both experiences hold importance for customers and they want brands to show up in those crucial moments of their journey. Customers are also expecting elements of discovery and inspiration.
THERE IS NO MORE PROFOUND THEATRE FOR BRAND INTERACTIONS THAN THE OMNICHANNEL RETAIL ENVIRONMENT. HOW DO MARKETERS BETTER TAP INTO THIS?
The million-dollar question for FMCG marketers is, ‘How do we fulfil brand marketing upper funnel needs, when so many decisions are product-first, closer to the point of purchase?’ The answer might surprise you: Theatre. There is no more profound theatre for brand interaction than in the supermarket, and if the theatre translates to a purchase, there is no more profound impact on future brand consideration.
Customers are keen to explore and lean into sensory experiences where brands stand out. Major in-store activations encourage trial and drive new-to-brand customers, while price promotion continues to disrupt established buying behaviours. Inspiration to purchase now comes from multiple touchpoints that blend online and offline channels.
This has given rise to the concept of ROBIS – research online, buy in-store. The omnichannel customer is now a reality with 61% of Countdown online customers researching online and buying in-store within four days. Brand reputation is built through multiple touchpoints, with omnichannel shoppers engaging with more of those touchpoints. Omnichannel shoppers are twice as engaged with brands than shoppers who only shop in-store.
Trust in the product is paramount and brand is the ultimate shortcut, with 41% of shoppers preferring to stick with supermarket brands they know and trust. Customers need to be guided through the purchase journey now more than ever. Showing up across channels in a continuous, relevant and consistent way is vital to converting customers to purchase. Brands can provide the platform for experimentation and exploration of new products and categories, with 38% of shoppers actively wanting to hear from and discover new brands.
WHAT WILL THIS REIMAGINED CUSTOMER JOURNEY LOOK LIKE IN THE NEXT FIVE YEARS?
Omnichannel demands a continuous cycle of inspiration and exposure. Cultural shifts in the past five years have evolved the customer journey, including changes in personal lifestyles, to increasing environmental consciousness, better technology and more choice. Customers continuously fluctuate between awareness and consideration as they are exposed to more messages across multiple touchpoints. The shopping environment does not exist in a vacuum. Customers are arriving in retail environments with more information than ever before.
Purchase decisions are influenced by everything that occurs before opening a search tab online or walking in-store, as well as what happens in the moment (kids yelling or disappearing down isles included). Effective marketing pre-shop can mean that a simple nudge while shopping is all that it takes to convert to purchase. Shopping is an ongoing journey of discovery with 30% of all customers shopping both online and in-store at least once a month. Each of these channels of discovery contributes to a well-stocked mental pantry of all the products and promotions that a customer is aware of.
A shopper continues adding to this mental pantry each time they come across new information. And gaining a place in this mental pantry is key. Lists remain key to the planning and purchasing process for 59% of people who made the most recent grocery trip (62% in-store and 58% online). However, those who like to discover new products are more likely to use a list (61%) and are much more likely to buy items, not on their list (71%).
The paper list, however, has had a digital facelift, with shoppers increasingly embracing technologies to curate their lists such as fitness and meal planning apps and saved lists online or in-app such as our Countdown app. While lists dominate, there are also opportunities to influence purchases, with 28% of items purchased driven by push factors (such as promotions or special offers). Discovery also plays a significant role, impacting 26% of purchases in-store and 36% online.
The most salient product at point of purchase wins. So what will it actually look like in 5 years? Maybe, we won't be able to tell the difference between in-store and online?”