When you take a look at the grocery industry, it seems like there are two types of grocery stores. One, the mega-grocer, with thousands and thousands of square feet, an inconceivable number of items on the shelf, masses of harried employees, inexpensive prices, and the latest retail technology implemented in each of their hundreds of stores. The other, a community grocer, one with a penchant for getting to know customers on a personal level, with a curated selection of high-quality goods at a bit of a higher price, and an in-store experience that rivals retail pop up shops across the country.
For a while now, the venn diagram of these grocers existed as two separate circles. However, there are new retail innovations afoot that are pushing these two concepts closer together in ways that can actually benefit the independent grocer.
You see, mega-grocers may have the financial advantage, able to implement new technology without a second thought, but they find it much more difficult to get their hundreds (if not thousands) of new employees on the same page when it comes to a new in-store initiative.
Community grocers already have the more complicated personal piece covered. Now, in this new world of possibilities, they actually have an advantage. There are a plethora of trends exploding in the retail space right now, and if community grocers can choose one or two and go all in on, they can race to the forefront of the industry – while giving their customers the optimum experience that they’ve come to expect.
5 Industry Trends that Independent Grocers Should Embrace
Not every trend is a great fit for a community or independent grocer. Technological advances like AI, body-scanning, and creating a broad omni-channel operation may not make a lot of sense for an independent grocer with a handful of stores. Instead, focus on the trends that will have a direct impact on your customers. Here are our top 5:
It’s no longer enough for grocers to have a small organic section in their store. Sustainability has become a full-fledged movement, encompassing the interests of the majority of your shoppers.
Confectionary News put it this way: “What we used to consider the fringe is in fact moving to the middle.”
The green consumer is now the norm.
So what advancements do you need to make as an independent grocer in order to be known in your community as a supporter of sustainability? The first step is taking a look at your supply chain.
The products that you stock in your store will be the first thing that a concerned customer will examine. He or she will want to know if the product was produced in a sustainable way, if the packaging is recyclable or reusable, if the workers who produced the product were paid fairly, and if the food itself is a sustainable item. Make an effort to work only with suppliers who have similar sustainability standards to your stores so that your customers know what to expect when they’re shopping your shelves.
Next, consider your in-store sustainability initiatives. Are you focused on the waste that your store is producing? Feeding America states that 52 billion pounds of food is wasted by manufacturers, grocery stores, and restaurants alone. To reduce your store’s impact, think about adding a food waste prevention program like Stop Waste Together to your repertoire. A program like this not only allows you to reduce your effect on the environment, but also lets you educate your customers about the work that you’re doing to make a difference.
Investing in people
As a community grocer, you’re probably already aware of the importance of treating your employees just as well as your customers, particularly your first-time, entry-level employees.
This focus on employee well-being is a positive trend in the retail industry. While many traditional supermarkets are looking to tech for solutions, H-E-B recently spoke about the internal changes that they’ve made to promote hiring of highly-skilled employees in their stores.
They’re following your lead. You are already hyper-aware of what your employees need to succeed. Now is the time to go all in on this concept and level up. Invest in your employees through extensive training that allows them not only to gain customer service skills, become on-the-floor experts, and complete their tasks efficiently, you’re also setting them up for success as valuable community members and as potential executives in your own company.
You may not think that you need to get in on the e-commerce action as an independent grocer, but it’s a growing revenue stream that you should think about taking advantage of this year.
Rakuten Intelligence found that online shopping is projected to increase at 10 times the rate of in-store sales throughout the next five years. The Food Marketing Institute and Nielsen back up this claim with a projection that says click-and-collect will have 70% penetration in as little as four years.
This is one aspect of retail technology that you can’t afford to pass on as an independent grocer. Your customers are already familiar with this technology, as they use it at other retailers in every industry, and they’re going to start expecting it from you as well. Now is the time to figure out the kinks so that when click-and-collect is a necessity, you’re already doing it at a high-level.
Smaller store formats
Here’s another area where you have an advantage as an independent grocer: customers are overwhelmed by choice. Mega-grocers are no longer the gold standard in this industry, with their shelves upon shelves of products that are barely differentiated. The grocery industry is shifting to a smaller store size. In fact, average sales area has been shrinking by 15% since 2010.
While it’s likely that you’re already feeling the benefits of a smaller store format, especially in comparison to big box stores and supermarkets, it could be worth it to consider whether you could provide an even more curated experience for your customers.
Instead of having a cooler full of meat for customers to choose from, could you provide a meat-slicing station where they could get custom cuts? Would a pop up shop with local fares make sense in your store? Think about the ways that you can make your store a go-to destination for your customers, while maintaining a community-focused feeling.
Meal kits have become a popular purchase in grocery stores across the country, from big box brands to independent grocers. Though prepared food options have always been an enticing option, there is a specific appeal to a meal kit. Customers feel like they are able to create something a bit more gourmet, without the hassle of finding a recipe or searching your store for each specific ingredient.
The ideal way to integrate meal kits into your store’s offerings is to create your own private label version and use geographically-relevant recipes. However, you can also partner with a larger company that is already in the meal kit business to seamlessly bring this trendy item to your store.
The time is now to jump on the meal kit trend. Neilsen data indicated that meal kits had seen 36% growth in just under a year. A survey of 43,000 consumers in late 2018 found 12% of consumers had purchased meal kits in the past six months, and in-store purchases accounted for 60% of the growth in meal kit sales.