NASHVILLE, TENN. – The influence of digital technology on consumers’ attitudes and purchase behaviors is leading to a new grocery retail landscape. To succeed in this new landscape, retailers will need seamless strategies that demonstrate an understanding of the shopper, offer experiences that engage the shopper and support digital and physical shelf space, Meagan Nelson, associate director at Nielsen, told attendees of the 2020 Annual Meat Conference held in Nashville March 2-4.

Retailers need to understand how e-commerce has changed consumers’ attitudes about shopping, Nelson said. For example, mundane “chore shopping” has become “cherish shopping,” which is characterized by convenience, memorable experiences, education and transparency. Cherish shopping quickly has become the norm for consumers.

“Retail isn’t dead,” Nelson said. “Mediocre retail is dead; mediocre retail doesn’t work anymore.”

The fresh factor

Driving this trend toward cherish shopping is fresh foods, particularly meat and produce. Deli – including bakery, produce, meat, seafood and prepared items – will grow stronger and influence in-store space and the digital space, Nelson said. Which means retailers will be merchandising for two spaces.

“You have to manage your digital shelf as well as the physical one,” she said.

For example, if a website doesn’t display an image of a product that a shopper is searching for online, from a shopper’s perspective that’s an out of stock item.

“While it’s technically available, what is attractive about a random dot?” Nelson explained. “That’s not going to work for that fast-paced quick consumer that needs to build their cart very quickly.”

On the flipside, consumers’ experience at a brick-and-mortar location will be critical to their willingness to use click-and-collect.

“If I don’t trust you when I go to the store, or I don’t have a good experience, I am not going to trust you to pick my groceries for me,” Nelson said.

Fresh will be critical at the brick-and-mortar level, while center of store might be more manageable to adopt online.

Omnichannel vs. omni-shopper

Subscription services coupled with the convenience of click-and-collect – “pickers” selecting grocery items in-store for pick up at a specified time – means consumers can get what they want, when they want it and in a location that is convenient for them.

This is the reality of the omni-shopper, according to Nielsen research, which currently represents 54 million households, up 14% over the past two years. The omni-shopper’s total food spend is more than $40 billion. And the omni-shopper isn’t necessarily the usual suspects – millennials, which is why retailers need to invest in customer intelligence.

“Just because it’s online, doesn’t mean it’s just the millennials,” Nelson said. “Millennials are having kids; millennials are nearing 40. But from an omni-shopper perspective, millennials are still below average in terms of how much weight they have in that particular space. A really good proportion are Gen Xers to late boomers.”

Omni-shoppers shop differently than the average shopper, she added. They take an average of 40 more shopping trips per year, but this includes buying on Amazon. They are accustomed to buying smaller quantities of products more frequently, so, there are more touch points with online shoppers. Another 25 million households will become omni-shoppers over the next five years with spending power growing to more than $630 billion, but that’s a conservative estimate, Nelson said.

It’s not millennials driving the omni-shopper trend – yet, Nelson said. But the demographics will shift as millennials get older, and their families grow and get busier.

 “While I purchase certain things on auto-subscribe within Amazon on a regular basis, I think of something I need, I impulse buy it on Amazon and it’s going to be at my house tomorrow,” Nelson said. “But what if I need to make a cake tonight? Satisfying consumer demand will mean meeting them where they are in that particular moment.”

The preferred path to purchase will vary – online because that’s what the consumer has time for or a trip to a brick-and-mortar store because that’s a convenient solution – but it’s going to be the simplest option that consumers aren’t going to spend much time thinking about, Nelson said.

Price leads as a major driver of purchase behaviors when it comes to meat, but retailers need to think about price as the new currency.

“For some consumers, it is purely price – they have to feed a family,” Nelson said. “But there is going to be that subset of consumers that price is relative from the standpoint of: ‘I don’t have time to cook this tonight; I need a fully cooked option. I’m willing to pay for that because I don’t have the time.’”

Consumer education about the various cuts, kinds and nutrition benefits of meat also is important and can be key to engaging consumers. But again, accessibility will influence how much and when consumers are willing to learn.

“The education needs to be available to consumers that want it,” Nelson said. “While consumers say they want to learn, again, it’s a time issue – do they have the time to do it?

“But if they want the information and you have the ability to deliver it, there’s a value proposition there.”

Retail landscape transformed

Location, location, location is a familiar mantra in real estate, but it is no longer consumers’ leading consideration when it comes to grocery shopping because of digital disruption, Nelson said. Retailers may need to rethink how they allocate space to support in-store and online shopping experiences.

“Location doesn’t matter,” she said “Just from personal experience – last summer I was doing Imperfect Produce and getting deliveries; I got them every other week. That completely changed how I shopped my local grocery store. My local grocery store was no longer competing with the grocery store down the street, with the fast-food chains or anything else around in my area – I live in Chicago. They were competing with a company that’s based in San Francisco.”