Troubles, upheaval and uncertainties – these words were already on the minds of grocery store executives before the COVID-19 pandemic turned the world upside down. At the time, they faced a potential explosion in online shopping, which the IMF said will include more than 20% of grocery spending by 2025.
Fast forward almost a year later, COVID-19 has accelerated this slow change towards the new standard for many grocery consumers. According to IMF, the transition to weekly online shopping (as part of all grocery expenses) climbed to 27.9% within the first four weeks of a lockdown that affected 94% of the U.S. population. This change is remarkable, given that only 10.5% of groceries were online a year earlier. And perhaps more impressive is the strong adoption of this channel among Millennials and Gen Z consumers.
The grocery store workforce, which primarily employs and operates physical stores, has been deeply affected by this sudden shift to online shopping. Instead of stocking and tidying shelves, checking customers at checkout, and keeping aisles clean, employees now have to fill orders online. Suddenly they were expected to choose high-quality perishables like produce and meat, ensure deli meats are sliced to order, and recommend equivalent substitutions when an item ordered is out of stock. stock.
This paradigm shift towards online shopping marks the start of a new era for the grocery industry. And somewhat ironically, that means the in-store employee experience will likely become even more critical when creating customer experiences that bolster brand loyalty and increase revenue both online and offline.
Avocado roulette and the unique value of in-store purchases
While online grocery adoption is likely to decline somewhat when the pandemic is over, analyst data indicates that the next generation of customers may prefer this channel in the long run. IMF reported that the highest adoption rate appears among future generations of consumers, starting with millennials with children (65%) and with Gen Z (54%) and Gen X (43%) following from close.
The growth of online shopping has also made customers aware of the differences between purchasing perishable and non-perishable items. When it comes to shopping for perishables, only 8% of consumers prefer shopping online over shopping in stores. This awareness is humorously illustrated by a new concept called ‘avocado roulette’, which refers to the experience of shopping online for a sensitive perishable product without touching or smelling it to ensure quality and convenience. freshness. You never know what kind of avocado will appear: ripe, too mushy, or rock hard.
This contradiction highlights a critical truth about the current direction of grocery shopping: In-store shopping will always offer advantages over online shopping when it comes to buying perishable goods. This is especially the case when the size, color, ripeness, taste, texture, smell and other characteristics vary considerably from one item to another. Stores can use the unique experience of purchasing perishable items to differentiate themselves from online retailers and build customer loyalty for both online and in-store purchases.
Internet shopping has increased and will continue to increase, but that will never remove the need for a personalized human touch in the grocery store customer experience. To deliver the value, convenience and experience that will shape customer loyalty both online and offline, store management must provide in-store employees with appropriate product training, enhanced engagement and loyalty, and make in-store processes more efficient. This allows employees to stay focused on the activities that matter most in a store – customers, not products.
Customer and employee experiences drive future growth – together
The internet can do a lot of amazing things, but it can never provide a genuine human connection between stores and their customers – only people can take care of others.
Customers want personalized advice on which cut of meat is best for a specific recipe from an expert butcher and how to choose a melon that’s ready to eat that day from a produce specialist. Most importantly, they want to interact with someone who cares about them, guides their shopping choices, and offers advice on how best to use different products.
So how can stores prepare their employees to deliver a high value experience? By revamping talent management practices to address four things that frequently undermine the experience of employees in grocery jobs:
1. Rethink the low-wage, high-turnover employment model for store associates: Raise people’s expectations of what it means to be a grocer by viewing most positions as highly skilled jobs with good long-term career prospects. Employees should be seen as experts who engage, advise, and educate customers throughout the shopping experience. This new paradigm can be established by providing employees with ongoing and meaningful training and translating skills growth into adequate pay and benefits.
2. Respect employees as assets to be maximized and not as costs to be managed: Actively listen to their opinions about the job and what would make them more productive and engaged.
3. Understand customer needs and deliver high value products at reasonable costs: Measure customer expectations and preferences and use modern supply chain technology to research and deliver cost-effective, high-quality and desirable perishable items. This exercise also includes investing in solutions that provide employees with the knowledge to engage customers in great interactions, instead of just quick transactions.
4. Reconsider staffing models and store layout: Focus on store layouts and staffing models that encourage high levels of employee-customer interactions. With an analytics-based planning solution, operations managers can assess customer needs and store traffic on an hourly basis, then match that information to existing skills. This idea inspires the creation of innovative planning strategies that increase employee engagement, customer satisfaction and store performance. During this time, customers will likely leave the store with a memorable service experience.
A better version of the grocery industry is emerging
As difficult as the pandemic has been, I remain optimistic for the grocery industry. What I see happening is an exciting opportunity for food retailers to increase their revenues by redefining the future of their customer experience while elevating the role and socio-economic status of every employee.
Steve Hunt is Chief Expert Work & Technology at SAP.