KANSAS CITY- In the 80s and 90s, grocery stores added pharmacies as a strategy to drive foot traffic. Soon, grocery drugstores proliferated, accounting for roughly 14% of retail pharmacy prescriptions while bringing a whole new connection point for retailers to think about and talk to their customers.
It felt as if this could be a match made in heaven. Grocery could really begin to bridge the gap between health and wellness.
Health and wellness remain a major trend today, propelled further into the spotlight by the Coronavirus. Supermarkets have an opportunity to expand their influence in the perimeter as preventative health grows as a shopper focus. Before vitamins, supplements and prescriptions, whole foods are natural medicine.
Grocery stores have an important role to play. And an opportunity to educate customers and capitalize on wellness trends. Their perimeters, full of fresh and nutrition packed foods, have the potential to be our pharmacies of the future. How stores choose to evolve and make healthy shopping exciting will dictate how they succeed in coming years.
Lasting changes from 2020
COVID-19 has brought to life the importance for all of us of being healthier. Long avoided issues of obesity are now front and center as those with pre-existing conditions are facing the brunt of this new virus.
Grocery has experienced major shifts with the pandemic. On one hand, sales increased as more people cooked at home - 54% of shoppers adopted new home cooking habits during this time, according to HUNTER research. But lower foot traffic, tighter budgets, and more online shopping meant fewer impulse purchases. With up to 20% of the average household grocery bill accounting for impulse buys, grocers felt the pinch.
Shoppers also engaged with new services like Buy Online, Pick Up in/at Store (BOPIS and BOPAS). Services like Shipt and Instacart were now available to safely do the shopping for consumers. Services flourished, with 8% of all consumer goods sold online purchased through Instacart. In the early months of COVID they saw app downloads and usage go up 200%.
The challenge is that the shopper was taken off the floor and put onto a screen. Great if you know exactly what you want, but those impulsive purchases that grow the basket became more challenging.
What is a grocery retailer to do in this new world? Can it help as shoppers try to make small to large meaningful changes in their lifestyles and embrace wellness? Where can they engage as shoppers look to avoid going to the store or have embraced new services like BOPIS, avoiding the perimeter of the store altogether? What can the retailer do if the shopper isn't even in their location?
A suggestive perimeter
Even though there has been an explosion of various services that remove or redirect your shopper, that doesn't mean you should give up on providing them solutions when they are in your store. A recent study from The Manifest shows that 62% of shoppers are still shopping in stores regularly.
Consumer focus on health, wellness and safety is more important than ever, so any opportunities to merchandise for those needs will be welcomed.
Shoppers are often making meals decisions while in the store. This makes visual cues essential for capturing limited, and stressed, attention spans.
Over the past two decades shoppers that have tried to eat healthier have lived by one creed, “shop the perimeter.” But with so many new health-conscious consumers, grocers have the opportunity to guide and facilitate more perimeter shopping and to grow shopper baskets.
Visual cues through key product placements and signage can elevate perceptions of commitment to wellness. Signage can move beyond price and include relevant nutritional information and even the benefits of particular foods. Shoppers are not just looking for calories, fat and sugar, but functional benefits and medicinal qualities provided.
More and more shoppers are seeing “food as medicine'' as they look to improve their lifestyles. But don’t assume shoppers will know or remember the functional benefits of foods. Help them understand through effective signage and display.
Signage that shows how particular fruits and vegetables, meats and dairy can be used in a meal are also highly influential to buyer decisions. When generating signage that inspires, use imagery that is aspirational but achievable. Making wellness shopping and cooking appear simple helps to encourage shoppers to experiment and ultimately add an item and try a suggested meal.
Better virtual perimeters
As more shoppers continue to shift a percentage of their shopping online, grocers should be using shopper marketing to drive awareness of their online presence and programs. Grocers’ websites can be powerful tools to use when tackling wellness for shoppers.
Grocer websites that offer not only recipes but search filters for healthy and special diets allow shoppers to more easily navigate perimeter products online and shop those recipes in a few clicks.
With the shift to ecommerce, shopping in the near term will become less impulsive. Shoppers are likely to add fewer new or experimental items to their carts because they don’t wander by products online like they do in-store.
Grocers combat this now by selling ad placements. However, this is limited to the few brands willing to spend the money for a limited piece of real estate, interrupting a focused mission.
Generating content and building user experiences that natively suggest healthy choices will help combat decreased foot traffic. Insert healthy recipes into the online journey, make recipes shoppable, give personalized suggestions based on browsing history and past purchases, and help facilitate product discovery.
As more data is provided by shoppers, information can be used to create suggestive meal plans based on work schedules, family habits, or personal fitness goals.
The opportunity is for grocery to move beyond the transactional dynamic. The future will see more personalization of shopping experiences and guided suggestions that promote healthy choices. Grocers must take on the challenge to inspire more wellness shopping.
The future perimeter is about moving away from a physical destination and moving toward a mindset of how you are fulfilling your shoppers’ personal goals. If grocers don’t, someone will.
Raj B. Shroff is Founder and Principal of PINE Strategy & Design, where he focuses on shopper insights and research, trend foresight, category innovation, and the future of retail.
John Youger is Partner at PINE Strategy & Design, where he works with CPG brands and retailers to project and build experiences that meet evolving customer needs and future trends.