The modern supermarket emerged over 80 years ago. Despite cultural revolutions taking place at an ever faster rate, changes in the grocery store aisles have been incremental at best. Emerging channels like eCommerce are quickly claiming consumers whose needs aren’t being met in the traditional market—and they will continue to do so if supermarkets fail to adapt to the megatrends driving changing consumer behavior.
A recent report by sales and marketing agency Acosta dives into five megatrends impacting the grocery industry and its future.
The first trend Acosta identifies has been apparent for years: the prioritization of health and wellness by the average consumer. Research by Acosta demonstrates the true saturation of this trend across consumer groups—89 percent of those surveyed rank the availability of fresh produce as more important than pricing or selection of products. Even so, nearly half of shoppers consider leaving a store if fresh produce or healthy options aren’t available.
While many supermarkets have long since realized the importance of expanding organic offerings and options to aid those with dietary restrictions, many could do more to differentiate their stores. Health and wellness offerings should not be limited to the perimeter of the store, but instead integrated holistically. Acosta suggests lengthening trip times by making dietitian and health services readily accessible in-store.
Another trend consumers are looking to see represented in stores are mealtime solutions. The culture that praises busy lifestyles leaves little time to think about planning and cooking a meal. According to Acosta, half of all shoppers typically decide what to eat for dinner within two hours or less of mealtime. More families are ditching traditional menu planning, with Millennials leading the pack at about 68 percent procrastinating their dinner decision.
Instead, consumers are seeking out prepared foods at grocery stores. 72 percent of those surveyed by Acosta make their selections based on the variety of offerings and 66 percent look for what’s ready to eat. The rise of “groceraunts” like Whole Foods satisfies the consumer’s need for affordable, ready-to-eat meals while also emphasizing variety through dishes consumers are less likely to make at home.
The Acosta report also acknowledges the impact of the not-so-quiet elephant in the room: Millennials. Pew Research officially declared Millennials the largest generation since the Baby Boomers this year—the extent of their influence is truly just beginning. Not to mention that according to U.S. Census Bureau data, one in five moms is a millennial, and they now account for almost 90 percent of the 1.5 million new mothers within the last year.
The generation who is more likely to buy prepared meals, use tech while shopping, seek healthy options and try new products possesses great implications for the future of supermarkets. This is especially true as Acosta’s data reveals Millennials enjoy grocery shopping (72%) far more than their Gen X (61%) or Baby Boomer (54%) counterparts. Supermarkets must use this to their advantage through improved in-store experiences that merge convenience and pleasure with in-store technology, partnerships with specialty retailers and uniquely tailored loyalty programs.
Speaking of in-store tech, consumer demand for greater digital integration from grocery stores continues to grow. 40 percent of shoppers are already buying products online each month, signaling a serious disruption in traditional grocery. However, an opportunity awaits supermarkets: 60 percent of consumers reported to Acosta that they’d shop in-store if online services were available. These services would mean much more than digital coupons—for instance, shoppers reported they’d most like to be able to order items not available in-store at the time of purchase, order online and pick up in-store and the ability to scan items as they shop to avoid the checkout line.
Lastly, perimeter growth is reshaping how supermarkets merchandise their products. 62 percent of consumers visit the produce aisle at least once a week and 61 percent visit the dairy aisle just as often. Millennials and Hispanic shoppers are more likely to shop the perimeter of the store than older consumers, according to Acosta. The center store may be suffering at the expense of this growth, but it provides supermarkets and opportunity to get creative with cross merchandising of products from each of these areas to promote a more intuitive shopping experience.
Many grocers have taken small steps to connect with the rapidly changing culture and its ever-adept consumers. But it’s not enough. According to research by MJR Creative Group’s Director of Strategic Brand Planning Bradley Fitzhenry, it’s do or die time for grocers who wish to survive.
Fitzhenry’s research finds a rapid acceleration of grocery dollars moving away from mainstream grocery retail towards mass merchants (like Target and Walmart), club stores (Costco and Sam’s Club) and convenience stores. The grocery industry is facing a disruption similar to what led to the downfall of so many other industries (can you say Netflix?).
It’s time for the food industry to push past what first worked in 1930 to feed the largest generation yet.
Mackenzie Mennucci, Content Specialist & Social Community Manager