Retail

Five Factors Driving Consumer Grocery Preferences

Grocery

Retailers are rolling out new ways for consumers to purchase their groceries that allow them to trade the checkout line for a few taps on a smartphone. From scan and pay through mobile devices and personal shopper services that can be ordered through apps, grocers are turning to new technologies to drive innovations in their stores.

Consumers are creatures of habit when it comes to grocery shopping, however: Eighty three percent of consumers shop for groceries (and often purchase the same items) each week, according to the PYMNTS Enterprise Retail Grocery Report. While this reality could give grocers the opportunity to bring in repeat shoppers, these habits may mean that getting a consumer to change grocers could be a challenge.

If grocery stores want to tap into this customer base, they need to consider consumer preferences such as where customers are shopping and why. These are some of the reasons, among others, that customers choose a grocer:

Nearly three in 10 — or 27.1 percent — of shoppers visit a grocery retailer because they can well-coordinate online and in-store shopping. Whole Foods Market stores are giving lots of perks to Amazon Prime members, for instance, such as signs across the store indicating lower prices for Prime members and discounts for customers who pay for a yearly subscription. Amazon is also selling its devices at the grocer and promotions for Prime adorn the aisles of many its brick-and-mortar stores, it was reported in June. At the time, it was also reported that Prime is a larger driver behind higher traffic to Whole Foods, and Morgan Stanley said in an estimate earlier this year that roughly 60 percent of shoppers at Whole Foods also happen to be Prime members.

Just under 17 percent — or 16.7 percent — of shoppers visit a grocery retailer because they can scan and pay through mobile devices. Kroger, in one case, has a checkout experience called Scan, Bag, Go that lets users choose items with their smartphones as they shop. After they have made their selections, they scan their items at a checkout station that digitally submits their payments. According to earlier reports, Kroger is looking to bring payment data into the platform — that way shoppers can pay without visiting a station. Kroger CEO Rodney McMullen told investors in November of last year, “Today, households that engage in our seamless offerings, engaging digitally and with our physical stores, spend more per week than households that do not. The future looks even more promising.”

Just under 5 percent — or 4.9 percent — of shoppers visit a grocery store because of personal shopper services. And some retailers are growing these service offerings: Target is expanding its curbside pickup to two new markets: California and Colorado, it was reported in August. Through the service, shoppers use the Target app to order products and then drive to the retailer’s store. Upon their arrival, employees bring the purchases to customers’ cars. Beyond Target, Walmart also has curbside pickup: With Walmart’s offering, shoppers select a store, products to purchase and a time — including later that same day — to meet up with a Walmart personal shopper and pick up their orders.

And 3.0 percent of shoppers visit a grocery retailer because it provides a virtual reality option. Walmart, in one case, has filed for two patents, it was reported in August, that could make the chain a significant player in the fledgling field. One of the filings was for gloves and headsets that enable shoppers to interface with a virtual store. Another involves robots that, while located at a distant fulfillment center, would prepare items for shipping at consumer shops via virtual reality (VR). Per a previous filing, Walmart also envisions pod-like physical structures that would be stationed in colleges, malls and office buildings, among other locations, that could offer VR-enabled shopping and be branded.

Lastly, 2.8 percent of shoppers said they visited grocery retailers for chatbots/real-time support. In fact, chatbots, or virtual customer assistants (VCAs), may be used in one-quarter of customer service and support operations by 2020, per some estimates. Research and advisory company Gartner says that over half of organization already have invested in VCAs for customer service. Gene Alvarez, managing vice president at Gartner, said at the Gartner Customer Experience Summit in Tokyo, “As more customers engage on digital channels, VCAs are being implemented for handling customer requests on websites, mobile apps, consumer messaging apps and social networks.”

While 90 percent of customers still shop for and purchase groceries in a physical store, online experiences are becoming more important — especially with particular groups. Bridge Millennials, for example, “are predisposed to online shopping,” according to the index. They are experimenting with technology such as voice assistants and chatbots as they shop for groceries — perhaps creating new habits in the future.

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Latest Insights: 

The Which Apps Do They Want Study analyzes survey data collected from 1,045 American consumers to learn how they use merchant apps to enhance in-store shopping experiences, and their interest in downloading more in the future. Our research covered consumers’ usage of in-app features like loyalty and rewards offerings and in-store navigation, helping to assess how merchants can design apps to distinguish themselves from competitors.

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