Grocery store business is now an ultra competitive industry with innovation, customer service and a high level of efficiency the measure of success. Chains large and small battle for customer trust and are using technology, data and distinctive retail shopping to set themselves apart. There are still price wars on the rise, discounts, offers and loyalty programmes slashing through price-conscious customers. These tactics often translate to extremely low margins, where stores have to become leaner and based on economies of scale.
It’s tech that is shaping this battlefield. AI and Machine Learning are used to forecast demand, inventory and optimize customer experience. Automatic tills, smart shelves, cashless stores, all offer convenience at an even lower cost to the customer and a higher transactional speed. Meanwhile, data-based insights help retailers see what consumers are buying so they can run specific deals that jack up baskets and generate repeat business. Businesses who lack the technological maturity in this area risk competing with companies that deliver fast, frictionless experiences.
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.
The secret sauce of the grocery wars is private labels, which gives stores higher margins and distinctive differentiation. Grocers win the trust of the price-conscious consumer with goods that are on a par with national brands, but less expensive. Private labels run on quality and price stability, and innovation in the products and the way that they manage the supply chain is vital. – Stores that have strong private label can use them to stand out in a sea of competitors.
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.
Localism and crowdsourcing also position grocers in a competitive position. The more local and attentively tuned the stores are, the more loyal the customers. This might include carrying ethnically based items, having events or using small manufacturers. In providing community, these stores stand out against insipid, big-box rivals. But implementing these kinds of strategies involve some finesse and local market expertise which is hard but worth it.
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.