Time for stores to be digital savvy

September 10, 2013

Supermarkets without smart digital strategies could lose disproportionate share.

Supermarkets haven’t come close to realizing their digital futures. Once they do, if they do, their physical store and online products and services will align with customers’ shopping and social media habits to deliver efficient and productive buying experiences.

If grocers ever achieve this vision, they’ll be better able to stem the long-term erosion of their food-spend dollar share from opportunistic competitors. Until then, no such luck. By 2017, traditional grocery stores will lose another 1.6 percentage points of share to 44.9%, reports our sister newsletter Facts, Figures & The Future. 

Over the same period, e-commerce food and consumables sales will continue to grow aggressively at a 12.1% annual pace, predicts the Willard Bishop consultancy.

These are two distinctly different directions—one down, one up. Why?

The Lempert Report feels grocers have overly relied on their built-in trip advantage—and never lost that habit, even as many other stores escalated food sales with different premises of convenience, savings, health, quality or freshness. That’s why in the realm of physical stores operators from Walmart to Aldi, to Walgreens and Dollar General, have grown significantly at supermarkets’ expense. 

In the evolving digital world, Amazon, Fresh Direct and Peapod are providing a blueprint for others to pick apart most supermarkets further. Some chains are advancing digital efforts, but too few to keep the digital divide from threatening the channel.  

To help prevent a second wave of share erosion due to digital shortcomings, supermarkets must orient their offers and communications to the newer ways shoppers—especially Millennials—seek information (social media, apps, digital coupons, websites beyond that of the retail chain), guidance and savings. To reach shoppers while they plan trips and once they’re in the store, effective mobile strategies could help drive more trips and bigger baskets. Among them: sites optimized for the small screen, check-in rewards programs, personalized greetings and e-shopping lists, the transmission and redemption of digital coupons, suggestions for companion purchases based on purchase history and where people are in the store.

Research supports efforts like these, and the clock is ticking.