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What U.S. Grocers Can Learn From Their European Counterparts

By: Olivier Delangre and Laura Hoste

The current COVID-19 crisis generates highly fluctuating demand in stores. While fashion retail and department stores are suffering, grocers are currently on the other side of the spectrum. To call it “flourishing” might be a stretch, but at least they’re not losing.  

As North America is a few weeks behind Europe on the crisis timeline, there are some key customer behavior trends that have emerged in Europe and can be a lesson for North American retailers, in preparation for what’s to come. 

Spend per Minute Jumps by 49%

We see that governmental announcements have a big impact on traffic in store. Usually right before and after the government addresses its country, traffic spikes by up to 200%. Mornings are prime shopping time, while afternoons and evenings are calm -- perfect times for replenishment or extra cleaning. Aside from that, shoppers are more efficient on their trips: While they spend the same amount of time (or more) in store, they make additional stops, resulting in an increased spend per minute by 49%.  To keep today’s customers satisfied and loyal, an efficient in-store experience will be crucial.

This stockpiling affects different categories, in phases. First, we saw people flocking toward nonperishables (pasta, rice, toilet paper) and baby care, and then they moved toward frozen products and hygiene. There might be a ripple effect in the future, when everyone has run out of stock, but we may also see a lasting effect, where people get used to having a well-filled pantry at home. If people continue to shop for groceries less frequently, it will become even more necessary to make the best of the time spent in store. 

Some “pleasure” products, like beer, have gotten more footfall recently (up 27%) and seem to be benefiting from this situation. As the pandemic goes on, we expect a steady growth of pleasure purchases. However, the way this materializes could depend heavily on the segment of the population. Customers who are currently losing a lot of income may turn to low-cost pleasure purchases, which might mean an increased demand for lower-end products. Others, who are financially less affected, could be looking to discover new products that are out of the ordinary. That might be an opportunity, in some categories, for innovation or differentiation of the assortment. 

What About Ecommerce?

As everyone is socially distancing and working from home, it’s not a surprise that shoppers are moving toward ecommerce. While the ecommerce business is quite developed in Europe, we still noticed a rapid saturation, with many supply chain issues. In some cases, wait times for grocery delivery are more than a week, as there’s just not enough capacity to handle the number of online orders. This emphasizes two things: There’s still a long road ahead until grocers are ready for a big shift to ecommerce, and while some shoppers will stick to their online orders, it’s very likely that many will go back in store after the crisis. Ecommerce isn’t ready to erase brick-and-mortar, which will remain prevalent in grocery.

Reprinted from: https://progressivegrocer.com/what-us-grocers-can-learn-their-european-counterparts

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