Bridging the grocery digital divide

Collaboration is key to winning today’s digital grocery shopper

As the digital ecosystem and consumer purchasing behavior continue to evolve, it is important for manufacturers and retailers to collaborate on in-store and online digital grocery shopping experiences that win digitally connected consumers.

The rewards of bridging the grocery digital divide

Although only four percent of grocery sales today are completed online, more than half are influenced by digital, according to Deloitte research. Most customers use digital for browsing and researching products, as well as seeking advice and input, according to the “Grocery digital divide survey, 2018.” These informed customers drive a 27 percent lift on transactions and a 36 percent lift on basket size, the survey noted.

Despite these compelling shifts, 89 percent of participating retailers in Deloitte’s “The voice of the retailer survey” said they don’t have much confidence that their consumer packaged goods (CPG) partners have the digital capacities to make the most of the opportunity. Fixing this now can be crucial.

How can you bridge the retailer-CPG digital divide? Let’s talk.

Digital grocery shopping and changing consumer behavior

Deloitte research has found that while behaviors are clearly changing, consumer values remain consistent:

  • Emotional connection—brands and retailers who share our values and interests.
  • Favorable experiences—shopping experiences that are positive, memorable, and fun.
  • Fast and easy transactions—finding and buying products quickly without hassles or friction.
  • Fair price and good value—feeling like we’re getting our money’s worth, and maybe even a little more.
  • Appropriate inventory—brands and stores that have exactly what we want when we want it.

With digital grocery shopping options, these values simply manifest differently: App-directed shopping, buy online pick up in store (BOPIS), and free 2-hour delivery—all from your phone—bring completely new meaning to “fast and easy transactions.”

What’s fueling changes in consumer behavior?

Four factors can fuel behavioral change that directly relates to digital grocery shopping and the grocery digital divide:

  • Economic inequality: Most gains since the Great Recession has gone to the highest income group, according to the Deloitte report, “The great retail bifurcation.” Because of this inequality, price-based and premier retailers are outperforming retailers in the middle.
  • Convenience expectations: Regardless of income, customers want immediate satisfaction in-store and online.
  • Channel proliferation: The average adult sees 800-2,500 ads per day, according to a 2018 Deloitte survey. This fundamentally changes purchasing decisions, including measures of convenience and quality.
  • Disruptive technologies: Consumers have ready access to product information, flexible pricing, app-based experiences, and personalization, all of which can influence and shift shopping behaviors.

Even with these factors driving behavioral changes, the physical grocery experience is still a cornerstone in our industry. As digital innovation blurs the line between physical and digital grocery shopping, a seamless partnership between retailers and manufacturers will be key to winning customers with positive in-store and online experiences.

“Deloitte data shows that the total number of digitally influenced grocery sales has more than doubled in only two years’ time.”

Collaborating to close the grocery digital divide

Kevin Rose, Retail and Consumer Products principal, Deloitte Consulting LLP, proposes that manufacturers address customer needs and gain retailer confidence in CPG digital capabilities by:

  • Understanding the changing relationship consumers have with retailers
  • Capitalizing on consumers’ digital connections
  • Collaborating with retailers to win digitally connected customers

“Market dynamics are shifting rapidly, with experience as the new basis of competition,” says Rose, adding that CPG manufacturers should build their consumer-oriented strategies accordingly.

Read our complete report and contact us to learn how retailers and manufacturers can collaborate on digital grocery shopping experiences that support new purchasing behaviors and can help you win today’s digitally connected consumer.

“Market dynamics are shifting rapidly, with experience as the new basis of competition. CPG manufacturers should build their consumer-oriented strategies accordingly.”

– Kevin Rose, Retail and Consumer Products principal, Deloitte Consulting LLP

Explore 2017 survey results in “The grocery digital divide: How consumer products companies can delivery on the new digital imperative” report and infographic.

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