20th November 2018

Destination Grocery Store

 

For grocers to stay relevant and competitive, they will need to engage and retain in-store shoppers by becoming destinations in their own right.

 

Given the increase of potential touchpoints in purchasing groceries—home delivery, online shopping, high-end convenience shops, farmers’ markets, apps and websites—it’s no longer enough for traditional brick-and-mortar grocers to focus on price and quality alone.

 

To keep up, many stores are transforming themselves into destinations with food experiences. According to the website Eater, these personalized concepts “feel more comfortable to shoppers, who then become more connected to the brand”. From destination grocery/restaurant hybrids, to “foodertainment”, experiential food destinations are allowing shoppers to have their cake and eat it too.

 

The future of the physical store

 

“Our research has shown that retailers who can create memorable experiential destinations for their consumers will come out on top in the grocery store revolution,” said Ryan Dee, Creative Director at Interactions. In a recent study they conducted of more than 1,500 shoppers, 59% are motivated to shop at a new grocery store because of in-store offerings, events and social media engagements.

 

For novice or time-pressed cooks, grabbing a handful of onions and carrots straight from the in-store “garden” and having a sous-chef chop them on-site is a memorable and appreciated gesture that creates brand loyalty and a compelling reason to visit the shops in-person. Ditto for being able to snip a single stem of thyme from the fresh herb wall rather than needlessly buying the full bundle. Or sitting around a reclaimed wood table, sharing recipe tips from a nutritionist.

 

Orange you glad Hy-Vee has disrupted the industry

 

 

 

The best—and for some people, only—time to make healthy food choices may be right after a great session at the gym. In an ambitious move that recognizes that today’s consumers are seeking convenient ways to access fitness and healthy eating options in one location, US-based Hy-Vee grocery chain has partnered with Orangetheory Fitness centres. “Orangetheory is a revolutionary fitness experience, which combined with Hy-Vee’s health offerings, creates a one-stop shop for wellness,” said Orangetheory Fitness Chief Brand Officer Kevin Keith.

 

Chairman, CEO and President Randy Edeker calls the move to become a destination for shoppers a “bold step to deliberately evolve our business to meet the change in our customers’ lifestyles and spending habits. These partnerships keep us on the leading edge as the retail grocery industry evolves.”

 

Hy-Vee understands the day-to-day challenges of its customers and as a result, has created a niche strategy to better serve their customers while challenging the industry with disruptive marketing strategies.

 

Lowes Foods is reinventing themselves (and the chicken dance!)

 

 

If you’ve never been inside US-based grocer Lowes Foods, be prepared for delights (oh, and a huge selection of local goods). You can sip on a glass of wine while you have your veggies chopped or saunter over to the chicken counter to be entertained by the staff’s own rendition of the iconic Chicken Dance. It’s not surprising that fans, er, customers, are taking to social media to express their pleasure for the experience and becoming loyal brand ambassadors.

 

Lowes Foods wanted to create an environment that would compel its customers to grab a seat at the table and stay there. These personalized in-house experiences helped position Lowes Foods as a go-to destination in a sector that regularly struggles with keeping people in-store.

 

At its core, the reinvention let Lowes Foods completely reimagine the grocery shopping experience while providing exceptional attention to their customers.

 

And it seems to be paying off.

 

According to the American Marketing Association (AMA), Lowes Foods has created a more emotional and experiential retailer and as a result, saw increases in both average basket size and number of transactions.

 

 

Foodertainment at its finest

 

If the way to a man’s heart is through food, then the way to any parent’s heart is through a tantrum-free trip to the grocery store. For Ontario-based grocer Nations Fresh Food, the decision to turn their newest location into a destination was a piece of cake.

 

‘Nation’s Experience’ is an all-in-one grocery store, dining destination and entertainment centre in Toronto’s Stockyard Village Shopping Centre that will offer up “a unique and thrilling shopping experience not found anywhere else in Toronto.” The flagship location accommodates a state-of-the-art arcade, party rooms and an indoor playground, and helps bring the grocer’s ‘foodertainment’ vision to life.

 

The in-store experience is becoming increasingly important as the popularity of online grocers continues to grow, which is one of the reasons why they decided to take such an enthusiastic and family-friendly interactive approach to the newest location.

 

Pro-tip: Generate engagement and increase store visits by grabbing shoppers attention, creating memorable experiences and fulfilling their needs. Leverage online and out-of-home media opportunities to amplify in-store promotions to increase brand visibility, foot traffic and stimulate purchases.

A mixed bag of online + in-store

 

 

With the competitive landscape of digital options available to consumers within the grocery sector, there’s definitely room in the recipe for cross-platform touchpoints in this market. For example, click-and-collect continues to be a popular omni-channel option for grocers. And although convenience remains king for time-pressed shoppers according to JLL research, 93% of consumers still prefer to purchase food and groceries in person, thanks to the ability to see and touch fresh produce. Combining multi-touchpoint options to reach consumers may be the recipe for success for the future of grocers.

 

With a goal of creating grocery stores as anchors to community hubs, forward-thinking grocers like Waitrose & Partners, the UK-based company, blending online and offline experiences lets them have their finger in every piece of the pie. In addition to multiple online delivery options, they have introduced an in-store, hotel-style Welcome Desk, “the physical point where online services meet good old-fashioned face-to-face service.” Designed to provide shoppers with a comfortable spot to sit and stay, customers can grab a free coffee while they wait to pick up groceries (or order more), make a bulk wine order, use the dry-cleaning service, flower wrapping or sign up for the reward card scheme.

 

A recipe for growth

 

According to Mintel’s Amanda Topper, “Millennials are the target market for foodservice in retail concepts”. In the United States, for example, two in five consumers say they are more likely to shop at a store that offers an experience, such as cooking classes or an on-site dietician, and one-quarter of Americans say they like to spend time in grocery stores when not shopping (eg to eat, work). In general, Millennials enjoy unique experiences, and foodservice concepts can provide a reason to visit one retailer over another. In-store pizza ovens, sushi bars, customized burger bars and personalized meal kits are just a few of these foodservice concepts that are attracting—and retaining—shoppers.

 

And brands that take note of these trends will be well-served. Some already are, as Campbell’s Soup, Unilever and many others are investing in meal kits to explore what could become a US$10 billion industry by the end of next year. It’s a growth opportunity for brands to embrace the changes and add value to both consumers and retailers.

 

For the first time in history, teens are spending more money on food than on clothes; a fact that underscores how important food has become in the way many people express their identities.

 

Understanding your customer’s behaviour and habits is key. Finding opportunities where your competitors may not, is how successful brands differentiate themselves. If you’re looking to engage with a younger demographic, meaningful experiences, transparency and social responsibility are important. Developing long lasting relationships with your partner brands becomes just as important as your customer ones.

 

 

tenthavenue’s shopper experts know that shared technology and data can enable common understanding across retailers and brand owners within the rich complexity of retail media. Get in touch with us to learn more.

 

 

 

Photo Credits:

Main image: istockphoto/JIRAROJ PRADITCHAROENKUL

Hy-Vee: bizjournals.com

Lowes Foods: coroflot.com/jimmytheink/Production-Art-and-Design

Waitrose & Partners: www.bouncepad.com/

SHOPPER