The in-store grocery shopping experience has held on to its appeal, even as supermarket retailers have realized that they also need to offer customers simple, yet personalized, digital commerce options. Additionally, several retailers are bucking the conventional wisdom of supermarkets seeking the widest possible customer base and instead are creating stores designed to appeal to specific ethnic or national groups via merchandise choices and even stores’ design.
A recent consumer survey by experience agency ChangeUp identified what customers see as the key benefits of in-store shopping:
- 66% of shoppers feel more in control of their purchases in-store;
- 51% believe they get better-quality items; and
- 43% find in-store shopping enjoyable, highlighting the tactile and visual elements of the experience.
But supermarkets can no longer rely on simply providing a top-notch store experience for success. Online grocery shopping soared during the COVID pandemic, rising from 52% of all grocery shoppers in 2020 to 64% in 2021, according to FMI, The Food Industry Association. But what began out of necessity or an abundance of caution has become habitual; while the percentage dipped slightly in 2023, it rose to 67% in 2024.
Many elements of supermarket operations have to work in harmony for digital grocery shopping to succeed, from sophisticated order management and inventory management solutions that operate in real time as well as efficient methods for picking, packing and delivering orders to shoppers, either via home delivery or in the store’s parking lot.
On the customer-facing side, supermarkets would do well to improve their mobile and search experiences: two in every three online grocery orders are made on mobile devices, and a majority (56%) use the search function to add the most items to their carts, according to market research firm 84.51˚.
Improving omnichannel also is key to attracting what ChangeUp terms “power users,” the 47% of grocery shoppers who have mastered both online and in-store environments. More than three-quarters (77%) of these power users are in physical stores weekly, and 40% visit stores multiple times per week. Nearly as many (72%) use store visits for stock-up trips, making them even more valuable to a retailer.
How Albertsons is Linking Digital and Physical Shopping
Albertsons is one supermarket chain that has focused on both the basics of digital commerce and a number of refinements designed to appeal to these types of power users. “The first thing that we really focus on is being brilliant at the basics,” said Jill Pavlovich, SVP of Digital Shopping Experiences at Albertsons, speaking at a conference earlier this year. “Customers have expectations in this space — they want what they ordered, they want it on time, and they want it for good value. So we focus first and foremost on that operational excellence: Are the pickers picking the right product? Are they picking it like the customer would, bringing that sense of pride to the task? We measure metrics around on-time handoffs and order accuracy and all of that.”
The retailer also has focused on reducing the shopper’s “cognitive load.” For example, Albertsons research indicated that 60% of what most people buy each week from the grocery store is the same, so the retailer now allows digital customers to shop past orders or even put their shopping list on autopilot, like a subscription.
Albertsons also has recognized the major role that mobile devices play in grocery shopping. The Albertsons app now features more than 9,000 proprietary recipes that can be filtered by dietary preferences, household size and other variables. Once the recipe is chosen, customers can order the ingredients with one click.
“And we don’t end there,” Pavlovich added. “Once they receive their order, we actually have a Cook Mode where they can [move through] the recipes [as they’re cooking] by just waving their hands. So we really thought about it from end to end.”
Albertsons hasn’t forgotten about the in-store experience either; its app includes an ‘in-store mode’ that “makes our digital app a personal remote for the store,” said Pavlovich. “It gives customers seamless access to everything that the store has to offer: counter departments, order-ahead capabilities, aisle location, deal clipping and more.”
Licensing Digital Commerce Technology
Given the complexities involved in digital grocery, it’s no surprise that many retailers have outsourced some or all of its elements. For example, UK retailer Co-op is using Walmart Commerce Technologies’ Store Assist solution to improve its digital commerce operations. Store Assist is designed to digitize and streamline online order fulfillment workflows by allowing retailers to manage all orders and deliveries in one central location — from in-store pickup to ship-from-store, last-mile delivery orders and even third-party marketplaces.
As a result, employees will no longer need to switch between different apps and devices, helping improve their efficiency and productivity while also supporting faster delivery times to better serve member-owners and customers. Online orders will be picked fresh in local Co-op stores and delivered quickly to customers in their communities.
Well-known marketplace technology providers including Shopify also offer support for digital grocery experiences, as do several third-party delivery companies, including Instacart and DoorDash.
Targeting Hispanic and Asian Consumers
With the thin profit margins that are part of their business model, supermarkets must as a rule appeal to the broadest possible audience. However, some are seeing the advantages of creating stores for more niche audiences.
Save A Lot is taking a test-and-learn approach to appealing to Hispanic consumers. Last month, the retailer announced its partnership with Leevers Supermarkets to launch Ahorra Mucho (“Save a lot” in Spanish), a new discount grocery store and innovation center in Aurora, Colo. Part of the store’s mission is to test how new Hispanic-themed product assortments could strengthen shopper loyalty among these consumers.
The store will have special features such as a full-service, centrally located counter for the meat that is a cornerstone of Hispanic cuisine, as well as a broad assortment of fresh produce and an in-house bakery. Like other Leevers stores, this one will be 100% employee-owned.
“In tandem with Hispanic population growth, we’re seeing an increased demand for Hispanic food in neighborhoods all across the country,” said Bill Mayo, COO at Save A Lot in a statement. “The Leevers team’s expertise in this area makes them a natural fit to help us explore how Save A Lot can better serve Hispanic shoppers.”
Asian-themed supermarkets also are raising their profile. T&T Supermarkets, owned by Canada’s Loblaw Companies Ltd., will make its U.S. debut at The Marketplace at Factoria in Bellevue, Wash. on Dec. 5, 2024. The 76,000-square-foot store will feature made-to-order Asian street food and bakery items, as well as exclusive Asian wines and spirits and private label items.
“We aim to bring the rich flavors of Asia directly to the community,” said Tina Lee, CEO of T&T Supermarkets in a statement. “We want to be the go-to destination not only for Asian families but for anyone eager to explore new culinary traditions in the Pacific Northwest.”
Another retailer taking their cue from a U.S. neighbor is Northgate Market, which worked with Shook Kelley to launch a new food shopping and dining destination: Mercado González.
Mercado González has bypassed the traditional “box with aisles” supermarket format. Instead, individual categories each have their own “puesto,” or stall, with a dedicated merchant and exclusive recipes cooked in-store. Each puesto has its own cultural or culinary focus and is designed to have its own name, creative finish, materials, graphics and signage. Cooking puestos are equipped with open kitchens and seating so people can enjoy the “cooking theater,” as well as their own checkout areas and quick counter seating.
The puestos are surrounded by open communal seating areas, 11 murals painted by local artists, an indoor bar, two outdoor patios and a standalone fine-dining restaurant with a menu created by Mexico-based restaurateurs using the mercado’s ingredients.
Since it opened in fall 2023, the mercado has become the top-performing store in a chain of approximately 44 locations and has unlocked new possibilities for what Northgate can do in the future. Going “narrow and deep on Mexican culture” has, ironically, allowed the brand to appeal to a wider base of consumers who have a passion for Mexican culture, according to Joshua González, who oversees strategy for Northgate.
“You’re going to see a lot of what you see in the mercado in our broader organization, our social media channels and the events we’re hosting,” said González in an interview with Retail TouchPoints. “It’s not just a concept or one store; it’s what our organization plans to do moving forward.”