Remember precented times? Stopping to grab some bread and milk on the way home from the office? Browsing store aisles for new items not on the grocery list? Not internally screaming because the person behind you in line has their nose sticking out above their mask? So much of daily life has been disrupted or altered since the pandemic began, including the way food and beverage retailers have had to pivot rapidly to meet not only safety protocols but the shifting priorities and shopping habits of consumers.
As part of a series of virtual summits for Saint Joseph’s University’s food marketing program, food and beverage professionals from some of the world’s largest companies shared insights into what they believe will be some of the biggest changes, innovations, and struggles with for F&B retailers as we leave old strategies in the “before times” and adapt for whatever the “new normal” becomes.
Obviously ecommerce and online shopping are only going to become more ubiquitous for consumers, but it’s the types of items that folks are shopping for that are shifting along with their behavior. Everyday items—those consumers typically pick up at the grocery store—are becoming much more frequently purchased online, and that habit likely won’t be reverting once social restrictions on in-store shopping are lifted. So, what does that mean for retailers and consumers? Here are some key insights from the 2020 Food Industry Summit.
Consumers are curious to try new, low-touch activities.
75% of consumers have tried a new shopping behavior and most intend to continue shopping this way after the pandemic. This includes things like online ordering and delivery from restaurants, use of subscription-based meal kit services, and online grocery ordering and delivery (both store-branded and third-party services like Instacart.) This is an opportunity for businesses to introduce, improve, and/or promote these services to new and existing customers, as online grocery shopping is expected to double in the next five years.
Benefit for consumers: Convenience.
Stores and businesses that may be “out of the way” from a typical commute can now be accessed directly from home. This not only saves time, but can also save consumers money by disrupting casual browsing and exploration of new products while wandering down the store aisles.
Challenge for consumers: Barrier to entry.
After several instances of online ordering, algorithms and saved preferences drastically cut down time spent placing an online order, but the initial setup of creating and account and browsing a seemingly endless sea of options can be daunting for consumers. Consumer belief that shopping for groceries online saves time increases with each time they do it, after the first attempt.
Brand loyalty is less important than ever before.
With access to a vastly wider pool of retailers online, consumers are becoming less concerned with sticking to their favorite brands and are prioritizing availability and value over loyalty. The way in which people shop online is also accelerating this trend. In fact, 81% of grocery item searches on Amazon do not include a brand name at all. Shoppers are searching for the type of product they need, not the brand behind it.
Benefit for brands: Discoverability.
Brands that may have been overlooked by consumers on store shelves can become much more visible and appealing to consumers shopping online. Particularly those with greater distribution or availability.
Challenge for brands: Loss of share.
Products that capitalize on the physical look and feel of their packaging to command higher price points lose that advantage in the digital space and therefore can lose customer share to brands that speak to the value-driven consumer. Many brands are trying to combat this issue by adjusting packaging designs for a digital-first look, as well as updating on-package language, product description language, and metadata to improve discoverability during search.
Rising use of robots, dark stores, and ghost kitchens
Sounds very fitting coming out of 2020, no? Although they may sound ominous, dark stores (warehouse-like fulfillment centers with no in-store shopping) and ghost kitchens (a no-dining-room, kitchen-only, delivery-only restaurant) are becoming an increasingly popular way for businesses to cut down on their operating costs. With pandemic safety protocols and governmental mandates constantly changing, many retailers and restaurants are moving completely away from in-person interaction altogether as consumers’ digital shopping habits rapidly increase. Additionally, many are looking towards automation and other non-human methods for order fulfillment and delivery to lower spend and increase profits.
Benefit for brands: Lower operating cost and higher margins.
Challenge for brands: Knowing if and when to pivot.
Benefit for consumers: Lower prices and greater availability of products.
Challenge for consumers: None, other than initial confusion of not being able to find their favorite food spot on a map.