Did you know that by 2025, the share of online grocery spending could reach 20% in annual consumer sales? That represents $100 billion, or in other words, the equivalent of approximately 3900 grocery stores. Grocery is the next big retail sector being reshaped by Digital.
If you are a food retailer reading this, you’ll already know that your customers are expecting you to go in the lead providing them the experiences they want. Nowadays, buying groceries is no longer a boring routine. For the majority of global respondents of a Nielsen research, grocery shopping is an enjoyable and engaging experience. A fun activity that generates positive feelings and also a conscious aspiration for their wellbeing.
This blog post aims to inspire you with an overview of current trends in food retail. It will provide you with specific examples of the Nordics, Benelux and Spain and suggest angles for further opportunities to help you differentiate as a retailer by inspiring your customers.
New supply chain models
Let’s start with a recent historic investment in the trend of new supply chain models that are now emerging in the last mile. Picnic, the Dutch grocery delivery startup, got €100 million funding after only a year and a half since they started. This startup built electric vehicles to deliver groceries from a distribution center where they collect local produced food. By combining online convenience and offline service, they provide excellent customer experience. And with the look and feel of the old-fashioned milkmen, the startup appeals to the nostalgia from our childhood when milk was delivered at our home, every day at the same time.
Picture reference: left: Mary Evans Picture Library, right: Destadamersfoort Library
This leads us to the second trend which is a hot topic at the moment, food transparency. Grocery shoppers worry about food safety, health and wellness, but are also looking for an authentic connection to food. Transparency is the currency of trust in the digital age, FMI and Hartman Group recognize. This shouldn’t be underestimated as young generations are consistently changing their food habits towards a healthier lifestyle.
Picture Reference: healthy_ish on Instagram
This healthy trend is also shown in statistics. The following picture shows the evolution of shopping behavior in recent years for food & beverages. There is an increasing awareness for what is in the food we eat, producing food local and with minimal processing:
Fresh food categories play an important role into aspirations for eating healthy. Leading retailers are now investing to transform their groceries into a beautiful exposure of colors, smells and textures:
Picture reference: Sa2Pe Grocery Store in Barcelona
Consumers see their primary store as a strong pillar in their wellness. To ensure your store is chosen as the primary one, transparency may be the strategic vehicle. The opportunity here is to find ways to become the trusted partner on their side. Moreover, 36% of shoppers choose their primary store based on the quality and variety of fresh foods.
We started the blog post writing that grocery shopping today is appealing to an emotional desire. Not only for wellness, but as a conscious choice towards an eco-friendly and socially responsible world.
Zero Waste Grocery Stores
A few great examples are coming from the Nordic countries. If you step into a Zero Waste Grocery store, you will realize that you better bring your jars from home or use their paper bags because there is no packaging at all (nor plastic bags of course!).
These companies are born with the mission to reduce the waste we create on a daily basis. One example is the case of Gram Malmo in Sweden. They write on their website:
“In Sweden, household trash amounts to an average of 466 kg per person per year. In a world where temperatures are rising, and our oceans and landscapes are filled with plastic debris, each of us can take small steps to be kinder to the planet and leave a lighter footprint. By buying your groceries without unnecessary packaging, you can take one of those small steps.”
Picture reference: Gram Malmo (Sweden) store window.
Through awareness campaigns and partnerships to government subsidies, Denmark is also one of the leading countries against food waste. For instance, Wefood, Copenhagen’s first food waste supermarket is a tremendous success. The store sells goods that regular supermarkets can no longer sell due to overdue ‘best before’ dates. These products are still safe to consume, and they hold a significant discount of 30-50% of the market price. The store, located in a low-income neighborhood, is open to everyone. One of the largest suppliers to Wefood is Danish Supermarket Group and føtex. Wefood invests its profits in DanChurchAid’s projects aiming to reducing hunger in the world’s poorest countries.
Another example is this mobile app by Netto, an international Danish supermarket. Geo-positioning allows consumers to find fresh food products near the expiring date and to buy them at a reduced price. This has resulted already in a massive 10% food waste reduction in NETTO already. Just with a swipe of a finger. Also check out this video.
There are many examples here, but one that recently found myself buying and making the shift to a more responsible choice (and also more expensive). I’m talking of a toothbrush, so the higher expense was affordable!
More Ethical Choices
HumbleBrush is an eco-friendly toothbrush of Swedish design that is humble to others and kind to our planet. When you buy one, you also give another one to a kid in need of oral care. The design is of high standard and beautiful to admire in your bathroom, while using it gives a certain warm feeling.
Finally, we want to finish the blog post asking you:We hope you found some inspiration in these current trends to help you differentiate your business. New models in the last mile, transparency, ethical choices and zero waste. These are all tactics to get a closer connection to food, and which are consistently being adopted by shoppers, both in digital and brick-and-mortar. In fact, we are seeing a blurrier barrier between both channels, because customers do not think about channels but in experiences and convenience.
Are you inspiring your customers?
Let’s have an inspiring conversation about your current challenges and help you design the approach to get the grip with your customers. We can assess where your opportunity is and give you quick, tangible tips. You can reach us out here.
This is a series of blog posts about food retailing, in the next series we will be talking of grocery shopping as a “holistic” experience, where you can eat-shop-work-have-fun and sleep in one place… stay tuned!