Get ready for “click and mortar.”
It’s the latest iteration of food retailing, a recognition that consumers no long have an either/or view of grocery shopping – only online, or only in stores – but a “blended” approach that includes both.
In fact, the percentage of consumers today who say they typically fill the cupboard online and in-store is up dramatically from just three years ago, Jim Hertel, an executive with market researcher Inmar Intelligence, noted in a webinar last week.
For food retailers, he said, “The days of being able to treat online and in-store as being two totally separate experiences” are over because people now shop both “and expect one experience because it’s defined by one [store] banner or one retailer.”
“A cohesive in-store/online experience is key to future wallet share,” he added.
A co-presenter, as he usually is, on The Food Institute’s annual “Future of Food Retailing” program, Hertel offered a preview of Inmar’s report of the same name, due next month.
While the coronavirus pandemic certainly had a hand in accelerating use of web and mobile platforms for buying groceries, demographics also play a role.
Boomers (ages 55 to 73) and Gen X (ages 39 to 54) say they still prefer to shop in-store, Hertel said, but each group dabbles in online ordering too.
Millennials (ages 23 to 38) and Gen Z (age 22 and younger), seemingly always with a smartphone in hand, trend toward online shopping, although each also will shop in-store.
That has led to a change in thinking among researchers, according to Hertel: “E-commerce, at least in food retail, we don’t think is going to supplant or replace the in-store experience.”
And that’s good for traditional grocers, who for years battled non-traditional sellers such as drugstores, dollar stores and club stores that were eating into market share.
In 1995, the neighborhood supermarket dominated food sales, and non-traditional purveyors had just a small slice. By 2020, though, the non-traditionals’ share grew to 40 percent of overall sales and supermarkets’ supremacy shrank to 45 percent, according to Hertel.
Looking ahead five years, traditional grocers – not just supermarkets but retailers with at least two-thirds of sales in food and consumables – are expected to hold at 45 percent of sales, even as the share for non-traditional sellers grows at the expense of convenience stores, he said.
“Traditional grocery has largely taken advantage of … e-commerce, and will continue to get better and better at that and will use that as a tool to maintain their market share going forward,” Hertel said.
Of course, traditional grocers still need to get the consumers’ digital experience right, noted Hertel’s co-presenter, Craig Rosenblum, also an Inmar executive.
“It is no longer one-size-fits-all,” he said. “You must be able to deliver a unique, personalized shopping experience to each shopper. … You must be able to meet them where they want to be met.”
Marlene Kennedy is a freelance columnist. Opinions expressed in her column are her own and not necessarily the newspaper’s. Reach her at [email protected]