Are physical grocery stores checking out?

Posted in Retail
By Taylor Longfield on February 16, 2016

feb blog

Walking into a grocery store today, is a lot different than ten years ago. Although some things like the milk being located at the back and a 1-12 item express lane, may never change, today’s stores are innovating. Technology in POS systems, loyalty programs, store layouts, and smarter and more helpful associates, are creating a more likeable shopping experience. The culture of grocery stores/supermarkets is changing but with the increasing trend of buying on mobile, is it worth putting effort into adapting the physical store when everyone is online anyway?

Grocer Culture

Grocery stores today are more than just that. Loblaw’s, for example, offers cooking classes, birthday party packages and rooms available to rent. Wholefoods is also changing things up by selling records and offering knife sharpening at certain locations. (They’re even talking about adding tattoo parlours to some stores!) Sampling stations are popping up across supermarkets increasing customer happiness and encouraging shoppers to buy featured product.

Red Barn Market has mastered delivering a valuable customer experience. Opening its 5th location in Victoria, B.C., it features a one of a kind storefront with wagon wheels, vintage buggies and other ornate pieces, giving the store a true farmer’s market vibe. Their secrets to success include:  differentiating themselves within the market, great service, and strong community ties. Unique features like an ice-cream bar, smokehouse and outdoor seating make the Red Barn Market stand out in local grocery.

Major Players

Creating strong loyalty amongst in-store shoppers is shifting to curating a strong online following. While some grocers may only be implementing eCommerce platforms now, there are some known retailers in the market. Quebec’s online grocery services have been dominated by Sobey’s and Toronto’s long time online grocer is Longo’s. The Loblaw’s click and collect program is now available in 39 stores in Toronto, Ottawa, Edmonton and Vancouver and Metro will begin selling online in Quebec soon according to CEO Eric LaFleche. Most recently Walmart has joined the increasingly popular trend.

Walmart

At the beginning of the month, Walmart gave the suburbs of Toronto the chance to purchase groceries online and pick-up in store for a charge of $3. Proof of concept was shown in Ottawa last July when Walmart sold fresh products online for the first time in Canada. Walmart’s service is currently available at six locations and will soon be expanding to six more. Since 2014 Walmart has increased its eCommerce presence from allowing shoppers to pick up their order from lockers to a full experience of buying at home and never having to leave their car to pickup up their order.

What do consumers have to say?

A high majority of Canadian grocery shoppers, 88%,  admit that they have never shopped online for groceries, but it doesn’t mean they won’t start. Ordering groceries from the click of a button, and not having to worry about leaving the vehicle on a cold and rainy afternoon after a long day at work, is almost about as good as it gets. There may be obstacles to overcome when it comes to perishable food items, though. Today as consumers we look for plump red peppers that are bright in colour, with no bruises. Not being able to pick out individual food items might be a downside for some consumers. It’s clear that consumers do look for food online. Adding more content like recipes, tips and tricks in the kitchen, and sales on featured ingredients may help to not only draw more consumers to the website but could also increase conversion rates.

Is physical grocery shopping expiring?

Online grocery shopping currently represents 0.2- 0.3 percent of the market. What is a small category now is expected to reach 3% by 2018. With major players already known in grocery; Walmart, Longo’s, Sobey’s, and new entrants like Amazon with AmazonFresh, and Urbery entering the grocery delivery space it is only a matter of time before clicking and collecting takes off. In the meantime supermarkets all around will be stepping up their in-store experiences and working behind the scenes creating more of an online presence.