The state of the grocery shopper in 2017
The modern shopper is defined by shared responsibilities, looking around for deals, embracing online buying and greater focus on values.
In the past, there was one person who did most household grocery shopping, and that person had his or her favorite store.
That is no longer the case. Today, more households are sharing the grocery shopping duties, and going to many stores to fill their carts.
Low prices, great taste and convenience are no longer enough to capture grocery shopping dollars and retain increasingly fickle and finicky consumers. Some shoppers are seeking out stores that offer experience over function, and embracing retailers with similar values as their own. But more shoppers visiting more stores and taking advantage of more shopping channels translates to increased grocery spending.
Shifting toward a ‘shared shopper’ paradigm
Who is the average grocery shopper in 2017?
“It’s everyone,” David Fikes, vice president of communications and consumer/community affairs for Food Marketing Institute, told Retail Dive. “In the past, it was traditionally Mom shopping for her husband and kids. Now everyone assumes the role of grocery shopper. Households have transitioned from matriarchy to democracy in their shopping duties, moving toward a shared shopper paradigm.”
According to FMI’s 2016 U.S. Grocery Shopper Trends report, six of 10 households (58%) identify themselves as co-shopper households, often dividing and conquering to get the job done.
Perhaps more telling is that one-third of co-shopping households define themselves as having a pretty even 50/50 split of grocery shopping duties – meaning there’s no longer a primary household shopper. With millennials more strongly identifying as co-shoppers compared with older generational cohorts, the shared shopping trend will continue.
“The fight among retailers will be how to attract more grocery dollars from families with a key focus on the millennial shopper as they grow up and grow into the household shopper role,” Diana Sheehan, Director of Retail Insights for Kantar Retail, told Retail Dive.
Loyalty wanes as channel surfing continues
There was a time when the grocery store was the only game in town. Those days are long gone.
More than ever, grocery shopping is spread across multiple channels. Loyalty to any single retailer or store is waning.
FMI’s study finds that shoppers increasingly rely on a broad number of retail channels for grocery shopping, claiming no single retailer as their primary source for food.
Last year, 49% of shoppers chose a supermarket as their primary grocery store. Just a decade ago, two-thirds of shoppers (67%) claimed a supermarket as their primary grocery.
Now, shoppers are taking advantage of many available shopping channels — like traditional grocery stores, warehouse clubs and discount stores. The average shopper is utilizing anywhere from five to seven retail channels altogether, and two or three channels regularly to meet his or her grocery needs, according to FMI.
Non-traditional channels — discounters like Wal-Mart, dollar stores, convenience stores and online — are on the winning side of the equation and continuing to take a bigger bite of the grocery shopping pie.
“Much of the shopping around has to do with the shared shopping phenomenon described earlier. It’s one reason we’re seeing the diversity of channels. And we expect this will continue. Different people in the household are buying food in different venues and for different reasons,” Fikes said.
U.S. Department of Agriculture Economic Research Services data on SNAP recipients reports that the average consumer travels three to four miles to reach his or her primary store. FMI data concurs, showing that half of shoppers drive by at least one grocery store or venue to get to a preferred location, typically because of lower prices.
Bracing for a bricks and clicks future
The growing availability of online grocery options will contribute to more shopping around than ever.
One in five shoppers reported doing some grocery shopping online in 2016, up from 16% in 2015, according to FMI. But just 5% do online grocery shopping fairly regularly. Nearly all the growth in online grocery is among occasional shoppers — who also make up the vast majority of consumers using that channel.
Not surprisingly, when it comes to grocery shopping, millennials are more active online than older generations.
“It’s happening mostly in center store right now, things like paper goods and snacks. And we’re starting to see some play in perishables,” Fikes said. “We predict this will continue to grow. A key issue for grocery retailers becomes how they can embrace this shopper and the way they want to shop. We’re talking a lot about blended commerce, having a brick presence and online presence as well, and what that will look like.”
But, Sheehan said, it doesn’t look like online grocery purchases will take over all food shopping just yet.
“You can’t tell a grocery story these days without talking about Amazon. We don’t see Amazon positioned to capture the big stock-up trip,” she said. “Rather, we believe it will take on a different and big role as the ‘perfect place’ for fill-in shopping. Amazon will be about filling a void, winning on convenience and smaller baskets.”
Spending more amid food price deflation
According to FMI data, shoppers spent an average of $107 weekly on groceries in 2016, which is up from previous years. In 2015, average weekly grocery spending tallied $101. Five years ago it was $97.
Given widespread deflation in food prices, this means the uptick likely is being driven either by shoppers putting more items in their baskets or trading up to pricier products. More than likely, it’s a combination of the two.
Fikes said that shoppers are taking advantage of all the specials and deals out there to stock up. At the same time, they’re using the extra change in their pockets from savings on lower-priced basics to splurge on premium goods.
Kantar Retail’s ShopperScape database pinpoints basic groceries, fresh foods and eating out as three areas where shoppers report they’re spending more now versus a year ago. While the data shows just 3% of shoppers spending more on specialty and gourmet foods, three-quarters of them say it’s because they want to splurge or treat themselves.
The shared shopping phenomenon happening in today’s households also helps explain some of the increase in grocery spending.
“The pantry is expanding with shared shopping activities to accommodate the tastes of everyone in the household, not just a single shopper,” Fikes said. “Millennials especially want to co-shop in order to protect their interests. They want the snacks they want — the ones that suit their own personal tastes and needs.”
More factors influencing shopping expectations
It’s becoming increasingly difficult to peg grocery shopper expectations. As Fikes put it, “Everyone is shopping so everyone has different expectations. And a lot more is factoring into the equation.”
The big three factors of price, taste and convenience remain critical.
“Convenience is especially important these days. It’s a big area of focus. Deli, ready-to-eat and meal kits are all a growing area,” said Fikes. “But the equation that shoppers use to make their grocery decisions is expanding and starting to include more esoteric values. Half of shoppers have some values beyond the big three that they now consider important. Things like: Is it healthy? How is it processed? Is it ethically produced? Are workers paid fairly?”
It’s this type of values-oriented shopping that will play an important role in 2017 and for years to come, propelling retailers to improve their offerings.
Retailers and food manufacturers alike must be prepared to address and deal with issues related to the environment and product sourcing, as well as those surrounding a product’s ingredients and efficacy. Staff, especially customer-facing employees, also needs to be brought up to a level of awareness to adequately address these types of issues.
Seeking stress-free and differentiated experiences
“Shoppers increasingly will emphasize value over price. Having a stress-free shopping experience is gaining traction,” Sheehan said. “Kantar Retail has found that nearly six in 10 shoppers now rank ‘having a stress-free experience’ among their four most important factors when shopping.
“For grocery this translates into convenience, having a convenient location, quick in-and-out, one-stop shopping. But it also means having a convenient experience,” she continued. “Here’s where we see a connection to online grocery shopping. Consumers being able to shop on their own time, getting what they want, with no lines, etc.”
But it’s more than just the convenience factor at play. Shoppers increasingly will seek meaningful and memorable experiences.
“The perimeter is what’s going to set the supermarket apart from all those other channels, for example Aldi or Sam’s Club or Amazon. To meet shopper expectations, perimeter departments have to be very, very good,” said Sheehan.
“Produce sections must be impeccable with lots of local and unique products. Meat and seafood must be beautiful, sustainable and competitively priced. Pharmacists or nutritionists must be available to not only help shoppers understand prescription drugs and OTC products, but also help bridge health issues and grocery shopping. Shoppers are looking to grocery stores for more guidance and support for how to make their lives better.”
Fikes agreed that shoppers are looking for a wider package.
“Selling food won’t be enough because shoppers want information and an experience,” he said. “They want the retailer to do more curating. Help them make the best choice. Give them guidance. We expect retailers will invest heavily to up their game in personal engagement.”
Sheehan said she expects that retailers will look at creative merchandising and premium offers and services to make the store pop.
“A retailer’s mindset must be on how they can make that visit to their store more memorable, not just functional,” she said. “Make it a place shoppers really want to go to.”