4 Digital Trends Food Retailers Need to Know When Planning for a Post-COVID Reality

Grocery, restaurants, and CPG companies alike experienced significant upheaval due to the COVID-19 pandemic. Almost overnight, customers began demanding the same kind of convenience and service online they previously got offline. Now, brands need to prepare for yet another change as adrenaline-fueled pandemic habits subside and new expectations set in.

In a webinar panel discussion, Ben Woll, Managing Director of Accounts at Myplanet, spoke with Scott Compton, a Senior Analyst at Forrester, and Chris Boyke, a Senior Solutions Consultant at Commercetools, about the digital trends food retailers need to be aware of — and the technology opportunities in front of them — when planning for a post-COVID reality.

1. Changing habits means opportunities for new technology

While the pandemic drove significant shifts in behavior, don’t expect every change to stick. According to Forrester research, only 24% of US adults who started curbside pickup during the pandemic expect to continue post-pandemic. A similar trend emerges for people who began using contactless payments or online grocery shopping: only 32% and 36%, respectively, plan to continue post-pandemic.

This opens up big questions about which habits people will revert back to, which pandemic habits will stick, and what new habits or demands customers will have going forward.

Compton two major predictions are an evolution from curbside pickup to pickup lockers (similar to Amazon’s delivery lockers) and an evolution from consumers choosing between offline and online, to merging both options into the same shopping experience.

Compton believes a lot of the shift to online-only was done from necessity, not because consumers want online shopping exclusively. However, this opens new opportunities because consumers will expect similar conveniences to online shopping — like easy search and simple payments — to apply in store. While this creates pressure, food retailers can also build technology-based experiences in store. For example, wayfinder apps, collaborative digital grocery lists, contactless payments, and easy re-orders for in-store shoppers are all improvements food and grocery retailers should be considering going forward.

2. Food retailers need to think omnichannel

Pre-pandemic, consumers only had the choice of one or the other, online or offline. Now those channels are merging, and people want access to digital convenience with their in-store experiences, and the unique touches of brick-and-mortar for their online shopping journeys. 

For example, before heading to a physical store a customer might want information such as a store’s hours, what coupons are available with their loyalty account, or how full the store is so they can time their shop for a less busy time. And they’ll want it digitally, whether through a mobile app or online look-up. 

Once in the store, they may want to request prescriptions via mobile while shopping for groceries, use a way-finder app to efficiently navigate the store, or look up the price of an item on their app if the tag is missing. When they’re done shopping, they’ll want things like an easy checkout experience, the opportunity to get larger items delivered while still carrying out their smaller purchases, or to opt for an email receipt instead of printed paper. 

Food retailers need to adopt an omnichannel mindset, and think about how their online, mobile app, and physical properties all connect to one another. Information given in one area needs to be valid and applicable in all areas, all online and offline channels of the company add up to one brand experience for customers.

Compton recommends that food retailers think about digitizing the in-store experience first before extending the functionality to their website or app. This can help mitigate some of the digital transformation risks, because physical locations have more limitations than the digital sphere. if you go in the other direction, your new digital concept may not translate well into the physical store.

3. In-store digital experiences create new commerce opportunities

Changing consumer demands open new commerce opportunities. With digital experiences happening throughout the customer journey, there are new spaces for upselling, creating premium items, or creating new revenue streams with sponsorships and advertisements.

For example:

• Customers want easier meal planning, which creates opportunities for premium meal kits or recipe apps that encourage people to buy additional items they may not have thought of
• More digital engagement means an opportunity to launch educational videos with your chefs or food prep staff, the chance to generate lifestyle commerce opportunities with paid cooking classes, or even potential sponsorship opportunities for CPG brands to become the ‘featured’ ingredient or cooking tool used
• Customer desire for ease of purchasing creates an opportunity to build a one-click reorder button with the ability to recommend simple changes or upgrades, thus potentially increasing average cart size. It also opens the opportunity for recurring subscriptions to frequent use items, like hygiene products and staple foods.
• Increased lifestyle focus means opportunities to build a highly filterable digital shopping experience, where you can show premium items that are vegan, dairy free, or gluten free with an easy, one-click add to cart button
• The desire for a digital experience means you can customize coupons or promotions based on a customer’s shopping habits, potentially increasing conversion. You can also sell sponsorships or ad slots with more targeting, potentially increasing the value of the slot.

There are significant opportunities depending on your unique business model. The key is to view changing customer demands not as arduous requirements, but instead as opportunities to create more value with a premium digital experience.

4. Loyalty hinges on data more than ever

Customers are demanding that loyalty programs be more personalized. They don’t want generic coupons or promotions, they want offers relevant to them and their desires. This, says Boyke, all hinges on data, which is why he often advises caution before using third party food delivery apps. Unfortunately, food retailers lose access to some — or all — of their data when they use third party delivery apps, which hampers a brand’s ability to build personalized loyalty programs.

To win in a personalized loyalty game, brands need data with a central view of the customer. Brands using third party apps not only lose access to data, but are also susceptible to disruption if that third party delivery app decides to enter the wholesale or retail game themselves, bypassing you entirely.

For brands that don’t yet have in-house data, Compton recommends working with data that’s easy to analyze: regionality. For example, don’t show promotions for snow shovels in Southern California in July and don’t promote suntan lotion in Maine in December. Even this simple start will help build the first steps toward a more personalized loyalty program as you detach yourself from third-party app dependency.

The thing to remember, says Boyke, is that if you’re outsourcing any part of the experience, you’re outsourcing data. And when you do that, you lose the opportunity to build loyalty and create a more personalized shopping experience.

A digital food experience

Food may be a physical good, but technology is surrounding the food buying experience like never before. Whether restaurant, grocery, wholesale, direct-to-consumer, or something else, technology should focus on making the food retail experience as frictionless as possible. That doesn’t mean giving up on customer growth or assuming that technology will become a new cost center. For every change in consumer demand, there is a new commerce or loyalty opportunity— if you own your own data. Once you start owning data with a holistic view of the customer, keeping up with changing demands becomes easier as you’ll be more able to anticipate needs and delight customers.

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