COVID-19 has driven customers online and brings the role of physical retail space into question. The leading food retailers in our research have linked immersive in-store experiences with advanced digital technologies to integrate the online and offline shopping experience but face a growing profitability issue if home delivery remains the customers preferred option.
Digital ordering, home delivery and curbside pickup are now embedded buying behavior across all demographics. Grocery outlets have rapidly innovated in response, accelerating ecommerce and using creative ways to effect home delivery with larger supermarket chains recruiting thousands of new staff to meet the increase in delivery demand.
Trust and safety continue to be uppermost in the mind of consumers and is likely to be so for the foreseeable future. A home food drop is less risky than a trip to a supermarket as it avoids other shoppers. But no process has zero risk. Supermarkets are very focused on the health and safety of both employees and customers but 80 percent of those who have moved to shopping online because of COVID-19 intend to continue doing so.3
The challenge facing grocery retailers is how to optimize the economics of in-store and ecommerce. For some organizations this involves syncing digital with in-store to attract customers for the experience and for others it involves minimizing the costs of home delivery.
Grocery retailers face a new era in grocery shopping and an unprecedented change in customer behavior. Much of the new customer behaviors will likely stick. 80 percent of consumers that had purchased online for the first time intended to continue doing so6. As a result of COVID-19 grocers now face several strategic questions:
What is the role of physical stores in the customer experience?
Is it a channel or part of an integrated network of technology and experience?
How do we integrate digitally front to back to meet changing customer needs and behaviors?
How do we harness technology to drive the in-store experience?
What are the new activities we need to undertake to make the in-store experience more immersive and compelling?
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Digital ordering, home delivery and curbside pickup are now embedded buying behavior across all demographics. Grocery outlets have rapidly innovated in response, accelerating ecommerce and using creative ways to effect home delivery. The leaders in our research are using digital methods to support in-store attendance and give the customer options as to how they then want to make their purchases."
Global Head of Retail
Grocery retail hall of fame
First Choice Liquor
Sector hall of fame based on brands' Customer Experience Excellence performance relative to their market, according to consumers in the market specified.
6 KPMG COVID-19 Global tracker, Consumers in the new reality