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Smartphone and Consumer Trends Disrupt Traditional Shopping Behavior

Smartphone and Consumer Trends Disrupt Traditional Shopping Behavior


Times are a-changin’ as the days of once-a-week shopping trips, handwritten grocery lists, and single store outings take on more complex characteristics.   

Analysts with Willard Bishop reported the latest the trends in The City Wire and revealed a world where the theme for grocers today is “ready, set, change,” as the Millennial generation is armed with smartphones and limited budgets.  Though this group of consumers continues to disrupt the status quo in traditional grocery, maybe there is more potential to consider instead, and opportunities for sales. 

Traditional shopping is evolving in part, because four out of five consumers are carrying a smartphone, the report notes. Jim Hertel, managing partner with Willard Bishop, said e-commerce is not optional for grocery retailers, it’s now essential.

“It will have to become part of all grocers’ strategy going forward,” he said. “As store format change is daunting, it’s essential for retailers to connect with Millennials for future growth opportunities.”

Hertel said mobile is the Millennial’s best friend, and retailers that can figure out home delivery and integrate it into their strategy will be the biggest winners.

It really is a world “gone mobile,” with 70% of all mobile searches resulting in action in less than an hour. On average, a person responds to email in 90 minutes, while in just 90 seconds a person will most likely answer a text.

E-commerce now accounts for one nickel out of every $1 spent, Hertel notes.  This is a stat which demonstrates a huge potential going forward.

Willard Bishop reports the race for the subscription dollar is on among retailers such as Amazon with Prime Pantry, and Sam’s Club’s with My Subscription. Now, Target and Wal-Mart also are testing subscription projects.

New to the game is price transparency.

“Price comparisons are easier than ever and research indicates 59% of shoppers use their phones to check prices when they are in the store. Some 38% have stopped an in-store purchase because they found it cheaper via price checking with their mobile phone,” Hertel said.

Hertel said Wal-Mart’s new Savings Catcher will bring even more transparency in pricing among local competitors. He said it’s important for grocers to win consumer trust with consistent pricing, because they will know when prices are too high and will likely be offended.

Recently Costco and Wal-Mart joined a group of six major retailers that will add information to websites and mobile applications under an agreement with New York’s attorney general that will allow consumers to compare prices by unit.

To wrap up, let’s take a look at how the supermarket sector is faring. Willard Bishop reports that the overall traditional grocery segment raked in $522.8 billion in sales last year, an increase of about 1% in total revenue. Traditional supermarkets like Kroger and Publix saw their sales slide 0.4% in 2013. This format experienced the largest dip in market share as more consumers – 39% of the food spending market – spread their spending among Dollar Stores, supercenters and e-commerce, according to the study. Convenience stores and other quick stop stores accounted for 15% of food spending in 2013.

On the other hand, the fresh formats which as a group saw a 10.4% growth in sales to $14 billion last year. Limited assortment stores like Aldi continued to grow at a steady pace of 4.1% last year with sales of $31.1 billion. Supercenter sales grew at 4% last year to reach $200.3 billion.

How will the trends evolve moving forward?  We’ll keep you posted.