Omnichannel gives shoppers the means to shop when they want from wherever they are, and this sometimes means not going to the store. In this environment, retailers need to extend their merchandising and service skills into the digital world. This requires devoting supervision to the expanded playing field and adding the skill sets necessary to communicate effectively there. Prepared foods, in particular, are playing a larger part in meals served at home, especially for millennials who are willing to outsource cooking. Deli and bakery departments are well positioned to serve this need, if they are willing and able to respond to this new and emerging way of doing business.
Despite all the emphasis on digital, this trend is not about technology. First and foremost, it’s about changing the way you run your business so you can be successful in an omnichannel world where digital merchandising is a more important part of the mix.
Mike Eardley, president and CEO of the International Dairy-Deli-Bakery Association, stresses the importance of taking care of customers on their terms. “The move to omnichannel requires retailers to shift their focus from products — features, price, and inventory — to the outcome of the shopper’s experience that results from buying or using the product,” he explains.
At minimum, it’s necessary to take the steps that ensure that you’re in the game from the shopper point of view. The larger opportunity is to create a “go to market” strategy that sets your business apart from the competition and delivers more of what your target shoppers are looking for. Using digital to make the in-store experience worthwhile is a big part of the picture.
Instore merchandising mainly involves visual displays along with variations in selection, packaging, pricing and timing, all intended to encourage shoppers to buy more. Digital merchandising has the same goals as traditional merchandising but several characteristics set it apart and, in some cases, make it even more effective:
- It’s more flexible. It’s easy to change digital pictures and other content without using additional store labor.
- It’s more accessible. It’s available to shoppers all the time and wherever they are —at home, at work or on the go (this includes inside the store).
- It doesn’t have the shrink that comes along with merchandising perishable products because the physical products are replaced with digital images.
- It provides data on shopper behavior that contains insights into how shoppers are shopping and what they’re looking for.
“The omnichannel is our future,” Eardley says with bold confidence.
Online grocers are projected to account for 11% of food purchases by 2025, according to Nielsen and Booz and Co., a trend that illustrates the continued emergence of online and mobile channels where consumers can shop and schedule pick up or delivery of their orders right from their Web-connected devices.
Still, of the top 75 US grocery retailers, just over one-third offer some type of e-grocery service, according to Willard Bishop Consulting.
Click-and-collect and "drive" concepts, which have been successfully implemented in European markets, are now being tested by the grocery industry in the United States and Canada.
Two out of five online shoppers want to receive real-time offers on their smartphones while they shop, and one-third would like to use their smartphones as an in-store navigation tool to help them locate products, according to Planet Retail.
Greater future use of augmented reality apps, where shoppers can use their smartphones to pinpoint exactly what they're looking for or speak the name of a specific product in-store and the app would show specifically where to find it, according to futurist Daniel Burrus.
In today’s retail environment, convenience is a commodity, and shoppers are willing to spend more for it. “Post-recessionary consumers are prepared to pay for products that simplify their hectic on-the-go lives,” says Daphne Kasriel-Alexander, consumer trends consultant for Euromonitor International, a London-based market research company. “Technology plays a big part in attaining convenience, and omnichannel shopping options creates a seamless link between virtual and ‘real world’ shops with wide consumer appeal.”
In its Top 10 Global Consumer Trends 2015 report, Euromonitor shared prevalent drivers behind the buying habits of today’s shopper. A rise in collaborative consumption and a new culture of sharing has sparked growth in such endeavors as community gardening, grouped workspaces and crowdfunding. “In 2015, the sharing economy is growing and disrupting the way in which individuals think of space and ownership,” Kasriel-Alexander says. “Consumers are increasingly preoccupied with access to goods rather than owning them outright.”
The growth of digital communications and omnichannel gives retailers a way to bring together the physical and virtual worlds of shopping. It’s about making it easier for shoppers to get your products.
For instance, the Click & Collect option enables shoppers to order online and pick up at the store. With Drive, online orders are picked up at a non-store fulfillment location.
Grocers can forge delivery partnerships by adding a delivery option via Instacart, Uber, Postmates.com or one of many local delivery services, which can expand the reach of deli and bakery departments to a larger number of shoppers.
Businesses like Plated and Blue Apron are delivering complete meal kits for home preparation. For the shopper, it means no decisions, no shopping, just cooking. These services are a new type of competitor. They are delivering solutions for problems like “what to serve for dinner,” and their rapid growth signals that some consumers see this as a valuable service. Food retailers will want to decide whether or not to serve this segment of the business. Deli departments are candidates for capturing some of this business. Sometimes the best meal solution of all is just to take it off the mind of shoppers entirely.