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SPOILER ALERT! 2017 Industry Outlook

Trends, insight, and analysis you need to know
MS_Spoiler Alert

Numainville says online grocery shopping continues to make gains in both users and customer satisfaction. Traditional supermarkets received an overall satisfaction rating of 4.39 out of 5 in a 2016 RFG survey, but online retailers are catching up—with some like Peapod and Fresh Direct receiving a 4.36 on the same scale. Numainville predicts slow yet continual growth in the online shopping segment.

Kienzlen concurs, noting the growing number of consumers who prefer not to enter a grocery store at all. “The next biggest thing is delivery,” he agrees, and this includes ‘virtual supermarkets’ where shoppers order online not from a store but “a highly organized and efficient warehouse.” In an interesting twist, Amazon—which mastered online-only sales and delivery—is now opening high-tech brick-and-mortar stores.

Apps and Interaction
It will surprise no one to learn the demand for grocery apps and optimized websites for phones and tablets continues to climb. Numainville says a 2016 survey showed almost half of all shoppers said their primary grocery store was either not up to speed on the latest technology or wasn’t effectively promoting these capabilities. “So clearly, mobile-enabled websites and grocery apps are gaining traction with shoppers, especially with millennials.”

Suzanne Wolter, owner of FreshFit Solutions, a produce consulting firm, says this is a great opportunity for grocery chains that don’t have a strong digital presence. “Consumers, especially millennials that are interested in the companies where they purchase, relish being a part of the development process and can be an excellent resource for ideas.”

Segmenting and Service
Numainville also predicts success for retailers who embrace segmentation. “For some, this will mean gravitating towards a particular segment of the market such as high-quality, high-service, or price-oriented shoppers. For others, it might mean having a format with a wide array of products that appeal to a defined customer segment, like millennials.” He also expects success for independent grocers that “really embed themselves in the local fabric of the communities they serve.”

Walmart learned the hard way about neighborhood stores. “Years ago, Walmart was the biggest problem for independent retailers,” Kienzlen points out—but not anymore—as these stores not only learned how to compete against Walmart, but triumphed. “It’s not price,” he emphasizes, “it’s service.”

Another service that’s springing up in supermarkets is resident dietitians. Kristen Stevens, president of the Wilmington, DE-based Produce for Better Health Foundation, confirms that on-site grocery store dietitians are “quickly becoming less of a trend and more of a solid business practice.”

It’s also a win-win for fresh produce as shoppers learn more about the health benefits of fruits and vegetables. Other benefits include stronger customer loyalty and increased community connections and support. Depending on the store, dieticians may “answer diet and health related questions, hold in-store cooking and tasting demonstrations, participate in community events and activities, or write newsletters and other types of educational pieces.”