Notes and Thoughts on Grocery 2.0

I looked up the meaning of relevance in the online version of the Merriam-Webster dictionary. The second definition was poignant: the ability (as of an information retrieval system) to retrieve material that satisfies the needs of the user. Of course I thought of Online Grocery Shopping (OGS.) How better to describe OGS. A way for users to retrieve grocery items using an online system. The first meaning was also interesting; practical and socially applicable. A practical set of tools to get what I really need – food – for what I really want – save time and money.

I thought of this because of my 16 year old son. He’s brilliant. He does not know the world without a cell phone or a computer. They are everyday appliances or tools. His generation doesn’t just use the Internet, they count on it. The same way I have counted on the grocery stores being open when I need, he and his buds don’t know why they would not be able to make purchases via the Internet whenever they want, especially food – ever see a group of 16 year old kids eat? Yikes!

Relevance. What are you doing to keep relevant for my son and his generation of Internet users, eaters, and shoppers?

Dave Dec

We know consumers are looking for ways to save money. Statistics show us that more and more folks are using the Internet to find deals. They research products to find the best overall value first. Then the look at retailers websites to find the best price and special deals. These folks are known as “The Knowledge Shopper.” Grocery shopping is not immune. Your customers want to do the same. How? Well, they go to your website before they go shopping. They want to find your weekly circular and look for what’s on sale. With help from MyWebGrocer and your online program, they can place items in a list or move items into their ecommerce shopping cart while they are on your site. And for a small service fee, save the time it takes looking for deals and get all the shopping done online.

Show your consumers you know how they shop and understand their need for knowledge when shopping to save money and time.

/Dave Dec

In a recent survey of more than 3,000 U.S. consumers, marketing firm Precima found that 48% of people would spend money saved on gas on groceries. With gas prices continuing to decline, the average household is saving $175 to $200 monthly.

The survey also found the recession has changed the way consumers plan their grocery trips. 27% of consumers said they can no longer afford to stock up on food, while 35% of respondents said they’re stocking up more, but only on sale items.

This is good news for the consumer packaged goods industry already capitalizing on trends toward eating at home more often and taking lunch to work. To further capitalize on changing consumer behavior, CPG companies need to reach consumers at their desks, during the meal planning process. As online grocery shopping – and grocery shopping in general – grows, will your brand grow too?

Rachel

Your loyalty programs are important. Extending them beyond cards and sales is important too. Online grocery shopping is a vital channel you can use to expand your customer loyalty. Your customers can look for deals on your website, shop directly from your circular for online grocery shopping, make special request for items or conditions, e.g. please make sure my bananas are green! Your employees become your customers’ personal shoppers.

We provide our chains with customer surveys. These surveys help you to manage your online program. They are direct communications from the users of your online program so you hear feedback directly from customers’ mouths.

How important is online shopping to a loyalty program? One customer stated it perfectly in a survey. It comes from a customer who we had not head from for a while. They said, “I moved, and believe me, I miss you, too!”

/Dave Dec

Major grocery chains across the country have found a silver lining in recent consumer spending. Financial concerns have not only driven more customers out of restaurants and into grocery stores, they have pushed consumers to question whether their favorite brands are worth the extra cost.

Enter store brand products, which are cheaper than national brands and more profitable for grocers. These lines, often featuring premium ingredients and pleasing packaging, are attractive to consumers not wanting to sacrifice quality to save on groceries.

For decades, grocers thought of private label products as inexpensive imitations of popular brands like Cheerios and Coca-Cola. Consumers, likewise, have been skeptical, that is, except during recessions. As Jan-Benedict E. M. Steenkamp, marketing professor at the University of North Carolina Chapel Hill, says, whereas past recessions temporarily gave consumers a reason to trade down from national brands, this time, the change may stick because the quality and consistency of store brands have improved. “Sometimes, [the consumer experience] will be disappointing,” said Mr. Steenkamp. “More often, it will be better than expected.”

While store brands grow and private label products improve, major branded consumer packaged good companies still insist that their branded products offer better quality through taste and innovation, justifying the higher price. The bottom line is, the only instance in which it matters whether private or branded products provide more value, is in consumers’ perceptions.

As Sharon Frey, a Kroger shopper says, when deciding between private label and branded products, “A lot of it depends on what product it is. If it’s eggs, it doesn’t matter. I would buy Heinz. I prefer Heinz ketchup.”

For grocery chains trying to increase profit in a down economy, private label is the key to continued growth. To compete with popular brands, increase category market share and continue to deliver a sound message of quality for less, retailers need to promote store brand products at every point of purchase. That includes online grocery shopping. Retailers should utilize changing consumer habits by advertising private label lines where cost-conscience consumers can buy with one click.

Rachel