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Heading up the food and drink industry on a global scale, the grocery retail sector considers both supermarkets and grocery stores interchangeable – with language and culture largely dictating the way in which individuals and communities refer to their local food stores. It is an industry which dominates not only the food service and products sector, but also boasts the widest selection of vouchers and deals; encompassing discounts and multi buy selections and offers in with daily shopping on an ever-changing basis.
Exploring the grocery industry
In a supermarket or grocery store, the signage used in store would largely have you believe that groceries refer to the fresh fruit and vegetables on sale in specified areas of the store. However, not only is the grocery industry wide ranging and inclusive of everything from everyday food through to luxury treats and drinks, but it also expands far beyond the limitations of the supermarket and designated food stores.
If you take a step back and really think about how food and drink permeates into your daily life and routine, you start to see how touchpoints with various grocery industry offerings are more common than you think. Every time a pint of milk is delivered by the milkman, that is an example of the grocery industry at play – delivering what you need at a time when you need it. When you head to a food service location or facility and select a sandwich or a drink, you are directly interacting with the grocery sector and choosing an end product which is the culmination of the goods supplier, the café or retail outlet, and the customer. The fact is, every interaction the customer has with some form of food product is possible as a result of the grocery industry, with experts considering the five major grocery touchpoints:
- Drug / health and beauty stores
- Convenience stores
- Food outlets
- Mass merchandisers and wholesalers
- Supermarkets and grocery stores
Each of these five areas offers a very different shopping experience – but all five are largely held together by their influence and dominance in a sector which every single individual has interaction with at some point in their lives, whether they are supermarket regulars or not. To highlight this, one needs to only look at the first in the list of five – understanding and acknowledging how the presence of food and drink products across other retail sectors has thus expanded the reach of the grocery industry as a whole.
A quick search online for grocery coupons and deals will provide a whole range of industry-wide deals, and it is this in particular which plays a large part in the fluidity of modern shoppers and the way in which they shop – browsing and buying across a variety of supermarket and convenience shops in their daily lives; following the deals and seeking out the best prices.
Of course, grocery industry leaders are doing all they can to attract and entice buyers to come back time and time again. Cafes and food outlets offer loyalty cards and stamps, with free drinks promised after a certain number of purchases. Supermarkets and grocery stores have invested millions in the production of loyalty shopper cards which hold the key to exclusive deals and discounts, as well as access to customer benefits. Even wholesale retailers have changed their model to now offer access only to those customers who have become members – immediately providing shoppers with a sense of belonging and exclusivity to elevate their experience of shopping with a certain retailer.
Top retailers in the groceries industry
Having ascertained the five key headings under which the grocery industry operates on a customer-facing scale, it becomes much easier to breakdown the top retailers according to their target customer, the kind of products that they are providing, and also where they sit on the grocery scale – that is, do they provide the basic ingredients like wholesalers and producer markets, do they stock packaged goods designed to make modern life easier as in the supermarkets, do they deliver end product complete meals like food outlets and cafes, or do they sit somewhere in the middle with luxury goods and exclusive one-offs?
Did you know that the average retail grocery location in the United States carries 38,900 different products for their customers? That’s an awful lot of selection, and a huge variety of different brands – with many of the top retailers in the grocery industry filling the shelves both with branded products and with products of a similar nature and make-up but which boast the store’s own brand name rather than an external supplier. An excellent example of this, covering one of the products within the grocery industry which pops up across all touchpoints and food outlets, is crisps. Smart shoppers won’t be surprised to hear that big brands like Walkers, Kettle Chips and Tyrell’s rely mainly on the psychology of packaging, high prices and extravagant flavours in order to convince consumers that their products are better than the standard supermarket-own brand of crisps. This is of course helped by the fact that it is these big brands which are found in fast food outlets, convenience stores and health and beauty stores, as well as selected to sit alongside luxury products in gift bags, food hampers, and even built into the airplane snack bag and meal offerings.
This is an excellent example of how brands which benefit from multiple exposure points are able to work their way into the shopping baskets of captive customers at various locations – including and most importantly, when those customers are in supermarkets and grocery stores with a plethora of different options across different price points.
To really highlight the expansion of the grocery industry and how far flung it really is, some of the top retailers considered an integral part of the industry include:
- The Kroger Company
- Walgreens Boots Alliance
Trends in the grocery industry
One of the leading trends in the grocery industry as a whole is the rise of convenience and the ease with which consumers are now able to access a huge selection of different products and different store options from the comfort of their own home – through online shopping and ecommerce. Prior to the launch of digitalisation in the grocery industry, food shopping was done in the local stores, with popularity largely depending on the community, the target buyer of a specific store, and the range of products available. However, with the rise of the internet and ecommerce there came a shift in the way that consumers browsed and shopped – now able to access a wider variety of store options and retail sectors, including affordable supermarkets and grocery stores, high end food stores, convenience stores, dietary specific grocery stores and food outlets, and online wholesale options. This is something that has only grown further with the rise in online deliveries and the concept of click & collect, with each of these giving customers new ways of interacting with their favourite grocery providers – and new ways of seeking out new deals, new products, and new lifestyle choices in relation to their food and drink provisions.
The rise in the use of technology with regards to the grocery industry is not merely confined to the ways in which consumers now interact with their favourite high street grocery stores and food retailers. It has also allowed the industry itself to expand – encompassing more targeted retailers, giving food outlets more of a platform through which to reach customers, and even allowing small local business offerings to expand on a national and even global level. A great example of this is the way in which dietary specific grocery retailers have found a place in the foreground of the industry – including vegan e-market The VeganKind Supermarket, which uses social media and high levels of customer engagement in order to consistently deliver high quality information to the target market and drive them towards their site.
Another example of the power of online when it comes to the growth of the global grocery industry is the rise of Amazon Fresh – operating under the hugely successful Amazon model and providing customers with the ease of fresh food and cupboard goods delivered through the reliable and notoriously fast Amazon delivery promise. Of course, online shopping not only changes the way in which consumers are interacting with stores, but also affects the way that stores are able to engage with their customers – with both positive and negative impacts being felt across the industry. One such positive is that the rise of online shopping means that customers are likely to spend more time browsing the different products – using both reviews and aesthetics to determine whether they think a particular product will be nice or not. The layout of such online grocery sites means that retailers are in a position of power when it comes to getting specific products right in the eyeline of their customer base – meaning that on the whole, seasonal products perform well due to the sheer volume of targeting advertising on the site which drives customers towards it.
When we look at the negatives of online grocery shopping, this is where the in store experience is highlighted as just that – an experience, and one which we rarely consider to be anything special until we stop engaging in it altogether. The fact is, when it comes to food and drink, we largely shop with our senses rather than our heads. Yes, we enter the store with a list of things we need, but outside of that the majority of what we put in our basket is driven by cravings, attractive packaging, innovative meal concepts and things which look nice. In store tastings and product launches have always been a large part of the grocery industry, as have deals and discounts across specific product lines, brands and ranges. Another large part of the in store grocery industry experience is the way in which the shelves are stacked in the first place, with a great deal of studies being performed to ascertain exactly how stores determine where to stock different branded products – using height and location to drive particular brands into the line of sight of buyers.
And if you take away the in store experience, all of this becomes lost.
And then we have the trend around healthy eating and eating clean – with millennials in particular being the first generation to really drive home the importance of eating healthy and maintaining a balanced diet which shies away from the reliance on fast food and instead pushes customers to invest more time and energy into buying clean ingredients and starting from scratch. While this has had a markedly negative impact on fast food chains, for supermarket and wholesale producers the rise in healthy choices has simply meant that retailers have had to shift their priorities – with wide national campaigns changing store layouts to cut sweets and chocolate choices from queue lines, and replacing meal deal selections across food outlets with healthier choices.
Another way in which healthy eating has impacted the grocery industry is through the rise in popularity of specific food service deliveries and provisions – including vegetable boxes, meal prep boxes and even ready-made smoothie packets. All of these services have popped up across the industry in the last few years, in response to the growing demand for convenient food which can be made and served quickly at the end of a long day, but which ticks the box searching for healthy food options and meal solutions. With more and more of these food services appearing across the industry, serving both nationwide and local markets depending on the reach of the retailer and provider, vouchers and deals are becoming widely available – with a good example being a discounted first box as advertised in healthy lifestyle magazines, and free delivery being offered for loyal customers to encourage repeat custom.
As previously explored, the grocery industry is the one where you are most likely to find the widest selection of vouchers, deals and multi-buy discounts. All you have to do is decide where in this ever-growing sector you would like to spend them.