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Survey: Grocery stores need to ‘enter the modern age’

Many consumers think grocery retailers need to do more to modernize the shopping experience, according to new research from cooling technology provider Phononic. Of 1,118 consumers polled for the company’s 2019 Store of the Future study, 51% believe that if grocery stores don’t “enter the modern age,” more people will seek other ways to buy food. Similarly, 41% of respondents said grocery stores don’t leverage technology as well as other retailers, while 40% think grocery stores “haven’t changed in decades” and need to adapt to the modern age. “This should be a wakeup call to the industry,” Phononic's report said.

Cashing In on the Natural Foods Trend

An increasing number of Americans are embracing whole, unprocessed foods, and for good reason. Studies show that about 61 percent of adults’ diets in the United States are comprised of processed foods, even though these foods are proven to contribute to obesity, high blood pressure and other health risks. While quick and processed meals may be convenient, many people are unhappy with the detrimental effects that processed foods have on their health and are making concerted efforts to change their habits. According to the International Food Information Council Foundation’s annual Food and Health Survey, a growing number of 2019 survey respondents reported that they consciously tried to follow a specific diet in the past year, with clean eating and gluten-free or low-carb diets cited as the most popular.

Retailers face delivery disconnect

As food and grocery retailers grapple with unsustainable last-mile delivery models, a rising percentage of consumers seek free shipping for online orders, new research shows. According to the Capgemini Research Institute, retailers are absorbing a sizable chunk of last-mile delivery costs for online grocery orders. The average cost incurred per online order is $10.10, yet the average cost recovered from customers per online order is $8.08, the researcher reported in its “Last-Mile Delivery Challenge” study, released last week. Consumers are only willing to pay an average of $1.40 per online order for delivery.

How Curbside Pickup Drives Grocery Traffic

According to JDA Software, adoption of in-store and curbside pickup is growing exponentially, with a nearly 43 percent increase from 2015 to 2017 and 50 percent of shoppers having used a buy-online-pickup-in-store service model during 2018. It’s no wonder that the grocery industry is responding by adopting curbside pickup as a way to cater to today’s time-starved consumer. Major retailers like Target are beta testing the concept, with the superstore recently rolling out its Drive Up curbside pickup service. Customers order what they want from the company’s app, drive to the store and employees bring their purchases out to the car. A hybrid between online order fulfillment and traditional brick-and-mortar shopping, curbside pickup is gaining traction as a way to stay competitive with online retail. It may prove effective as a method of boosting sales and retaining customers, as Target reported a 10 percent increase in orders after its beta test. However, there are a few factors that can influence whether curbside pickup will be feasible for your business and embraced by your customer base.

4 Ways to Be a Customer-Obsessed Food Retailer

The Great Recession impacted consumers’ tastes and preferences over the past 10 years. If a retailer isn't carefully monitoring the changing needs of customers, gaps can quickly emerge, which open the door to competitors. The biggest driver of changes in consumer behavior is income, and for much of the post-WWII period, real incomes (adjusted for inflation) have been rising. The chart below illustrates these income changes over the past 40 years.
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