Growing up, you probably had your favorite brand of jeans. While you may not have been able to buy them all the time depending on your financial circumstances, they were the brand that you went to with birthday money or holiday funds. Today’s shoppers are very different, and much more fickle. Even retail brands are not immune to shifting consumer interests, as shoppers are more interested in convenience and price than they are loyal to a particular brand. Shoppers expect — even demand — a high level of interactivity and an exceptional digital presence that is transparent and authentic. Technology-based business models continue to be a disruptive force in consumer packaged goods (CPG) marketing and retail engagements. How can marketers expect these changes to impact brand loyalty, both now and in the future?
Shifts In Retail Brand Loyalty
While the neighborhood grocery store may be the first choice, research shows that over the past 12 months, more than 15% of shoppers have shifted to a new supermarket. These stats speak to the changes brought about by enhanced tech offerings:
- Instead of being loyal to a single location, shoppers are utilizing an average of 5.9 grocery retailers on a regular basis.
- 72% of Americans cite price as the number one factor influencing the selection of their grocery store.
- 81% of Millennials may order online, but still physically visit a store for their order pickup.
- Nearly 40% of shoppers would be unconcerned if their grocery store closed suddenly.
- Shoppers are willing to change based on digital experience; 68% indicated ease of use was more important than retail brand loyalty.
These are only a few of the statistics that show the massive and rapid shift from loyalty to a particular retail brand to interest in finding the most convenient and easy-to-use option regardless of brand name.
Why the Shift?
Online grocery shopping is perceived to be much more accessible and beneficial to shoppers than a trip to the grocery store. Busy life schedules, long lines, low inventory — there are plenty of reasons for consumers to make this shift. Balance that with the ease and availability of ordering online for delivery or onsite pickup, and it’s difficult to believe that online shopping rates are as low as they are. In the U.S., more than 30% of consumers shopped online for groceries in 2017, up significantly from the 19% of online shoppers in 2016. A variety of readily-available brands, along with the ability to price match, leads the aggressive adoption rate of this online shift. What’s more, 80% of shoppers who try online grocery are likely to repeat.
Catering to Busy Shoppers
Free time is at an all-time low in the U.S., and retailers are always on the lookout for ways to speed up processes. The one or two hours per week that were previously spent at the grocery store can now be spent with family or in leisure activities. Despite the hesitation with online shopping (lack of control over fresh food selection, limited brand availability), shoppers quickly realize that online grocery shopping enables a more fluid and flexible lifestyle. The difficulty for smaller or regional retailers lies in creating the ideal shopping experience that can contend with national brands. Today’s shoppers expect a seamless omnichannel experience, where favorites and shopping carts are passed easily between devices, orders are never lost, and everything happens at hyper speed. None of this is possible without access to high-quality and real-time data.
Brand Loyalty: Past and Future
In the past, brand loyalty played a big part in the ability of retail groceries to retain shoppers due to proximity advantage, but that key factor is quickly fading away with the growth of online grocery shopping. Grocers promoted their brand entanglement through simple couponing that could be either based on the shopper’s receipt or in the mail — or in their weekly newspapers. Shoppers now expect a great deal more from their retail brand of choice.
Future brand loyalty will be driven by the retailer who is most able to meet digital expectations. This requires understanding your shopper and their journey, and creating an experience that feels personal and unique for each shopper. While technology is what enables this level of detail and insight into the customer, there truly is no change from the focus: the basic customer relationship. Shoppers are looking for:
- Real-time store inventory that they can trust
- In-store locators showing where to find a specific brand
- Store employees who are able to correctly pick, pack, and prep online orders for in-store pickup
- Flexible pickup and delivery, with low cost or free options
- Ability to interact directly with the retail brand digitally
One brand that is actively disrupting the retail grocery world is Self Point, a digital commerce platform that allows grocery retailers to create a custom-branded ecommerce solution in a matter of days. Says Self Point Chairman Mayer Gniswisch, “Shoppers expect their retailers to know who they are and what they want. If grocers lose control of that relationship they run the risk of losing years of brand equity and loyalty with their customer.”
There are significant shifts happening in the new retail economy as retailers continue to tear down the barriers between online and offline interactions with shoppers. Manufacturers and brands have been required to evolve in order to stay relevant over the years, and the same is rapidly becoming true for grocery retailers as well. The point of differentiation with shoppers, vendors, and brands is the retailer’s ability to leverage deep access to and understanding of data throughout their supply chain. When retailers have this level of information about their products and shoppers, pulling the two together becomes that much easier.