The ferocious competition in the grocery market has driven an evolution, changing how we shop and redefine what consumers are looking for. Where convenience, price, and quality set the bar for achievement, supermarket chains have been forced to innovate in order to retain consumers. Discounts and sales, formerly just marketing gimmicks, are now regular part of the competitive fight for market share, even affecting the everyday purchase. Loyalty schemes have further encouraged shoppers to return, which helps stores establish lasting relationships with their customers as well as collecting information to target personalized marketing.
It has been fought with technology and now, e-commerce has flipped the field of battle. Grocery portals online, with their nimble interfaces and speedy deliveries, are taking more market share. Classic chains have jumped on the bandwagon and made a great deal of capital investment in apps, online orders and fulfilment centres to keep up with technology unicorns such as Amazon. Meanwhile, niche stores are agile enough to gain loyal clients by focusing on special product selections like organic or locally made.
The fight has been pushed all the more into the mouth of the Internet titans who combined internet and brick-and-mortar commerce to deliver unparalleled ease. Delivery and pick up in a few hours is standard nowadays, and grocery stores are putting serious resources into logistics to keep up. The move to omnichannel has thrown traditional grocery into the mix along with online stores and marketplaces, putting stores under pressure to be online and in person. They that are just right tend to win a better market share and the bad guys lose their relevancy.
Price wars are still a part of this competition that doesn’t let up. Chains will aggressively compete to sell at lower prices than their competitors, where razor-thin margins have to be balanced with the requirement to attract chubby shoppers. Private-label, with their higher margins and resolute price-setting, has become so prevalent as stores are looking to stand out. At the same time, bulk-buying clubs and discount stores challenge the old-school retailers, pushing them to innovate their prices or lose their customers.
Sustainability is now a huge driver of the choice made by consumers. Consumers are expecting authenticity of origin, sustainable packaging and fair trade. These stores don’t just attract conscience shoppers but they are considered innovators as well. But making sustainability a business is often very costly and complicated, and it is hard for grocers to be creative without going out of business. Brands that strike this equilibrium well often reap long-term dividends in loyalty and trust.
Grocery chains have been able to make decisions on where to put them, too. Stores in the city specialise in small, targeted selections for urbanites’ demands, and stores in the suburbs and country take advantage of space to provide choice at lower prices. Pop-up shops and micro-locations are new experiments in the market-opening, especially in overpopulated places where space is scarce.
And the grocery store wars are not stopping there either, with customer experience. Stores are pouring money into offering convenient and friendly shopping experiences.
Branding and narrative are all the rage, as grocery chains attempt to connect with customers emotionally. Whether it is heritage, quality or innovation, good branding works with customers. In an era of competition, a store’s or a product’s story can be the difference maker. The retailers who make a statement about what they stand for are the ones who tend to garner a loyal following; those that don’t stand out will be ignored.