In my home, there's a clear division of labour based on specialism. My husband does the brand shop while I look after all the fresh, chilled and new items. He deals with inventory management, while I hunt for inspiration.
We reflect a growing divide in food shopping. Soon, this is going to become a chasm and you’ll need to decide where you want to play in that new landscape.
This year, a small amount of growth has returned to food and grocery. Some mainstream retailers have increased sales and yet the big engines of growth remain the same – discount, online and food to go. What are the reasons for this? Is it mainly price, choice, convenience, or perhaps service?
These are the rational explanations. But I think they all miss the point because we aren’t really rational. Mainly, we act on our instincts and emotions. So at IGD we decided to study the emotions of shopping – and it’s given us a new lens.
We found the fastest growing formats are also the very best at triggering positive emotions. And we heard shoppers describe the biggest retailers as “the establishment”.
So today I’m going to reveal what we found, how this links to that chasm, and how you could get more growth through a deeper understanding of what really influences shoppers.
I’ve been out with shoppers recently and I’ve been concentrating on something different: their feelings instead of their choices. For instance, these comments were made to me in large, mainstream stores:
- "Look at it here, it's industrial”
- "It’s machine-like”
- "For me, it's a needs must"
- "It's an everyday thing"
- "I don't feel much here at all"
And here, by contrast, are some comments made in a smaller neighbourhood shop:
- “I love it here”
- “I feel I belong”
- “I really like the people, they’re so friendly”
- “I love this environment”
The contrast was stark. If we're listening very carefully, shoppers are actually trying to tell us something.
Our new research explored shopper feelings in more detail. We worked with an agency called ABA and they’ve developed an emotional gauge which looks at five key areas:
- Control is about feeling on top of things and confident you won’t be let down
- Desire is about the sensory pleasures of sight, sound, touch, taste and smell
- Belonging is about social connection, feeling welcomed, comfortable and part of a group
- Immersion is about being lost in the moment
- Freedom is about feeling unconstrained and liberated
We tested grocery shopping for all of these emotions and it came out okay – but could do better. It got a high score for control, approaching halfway for Desire and Belonging but lagged behind for Immersion and Freedom. This tells us that time tends to drag and we’re rarely surprised in a grocery store.
Next, we looked at the critical battlegrounds to decide the future of food retail. The real crunch battles are “cook at home” versus “food to go”; discount versus full range stores; and physical versus online shopping. And these battles are also critical for manufacturers.
Let’s start with “cook at home” versus “food to go”, which is usually viewed as a trade-off between price and convenience. The IGD satisfaction monitor for Food to Go outlets shows impressively high scores. For instance, 96% are happy with quality, 93% with customer service and 92% with value for money.
But I think there’s a bigger reason why "food to go" is surging ahead – it engages our emotions. It hits so many of the right buttons: it’s fun, varied, immediate, a treat and generally low in stress.
Home cooking can be inspiring too but let’s face it, the centre of an average supermarket is a pretty uninspiring place.
Now let’s consider discount versus full range stores. This hinges on the trade-off between price and range – or so we think. But our emotional lens reveals something else. The discounters have a small but significant lead over the mainstream for Desire, Freedom and Immersion. Why should this be? Well, there is a connection to price.
One shopper told us: “I don’t get stressed here. I can pick anything from the shelves and know I won’t get a shock at the till.” For him, the chore of comparing price had been completely eliminated.
Another shopper, talking about a discounter that sells brands, told me: “We’re living on benefits but if I can bring some well-known brands to the table, I feel I’m doing my bit for my kids. And even more, I feel part of a team.” It improved her self-worth and her sense of belonging. I even saw a shopper thrilled at spending more than usual! It's one of those spend to save moments.
But people also told us shopping at a Discounter is quick, easy and better for new products. That’s interesting, because discounters don’t really have more new products to sell. But I saw it for myself.
I went with a shopper to a high street discount store. She was so full of anticipation and she said to me “”I wonder what I’ll discover today”. And as we walked through the door the first thing we saw was a huge ‘what’s new’ display.
Now let’s move on to another big battleground, instore versus online. We usually think this hinges on cost and convenience but again our gauge provides another view.
Online services engage the emotions dramatically better, right across the piece. The gap is at its widest for Immersion and Freedom. It’s easy to get absorbed in the Aladdin’s Cave of possibilities online. And that emotional gap is going to keep on widening unless you do something about it.
It’s nine years since the onset of the credit crunch and also the launch of the iPhone. How much has the online world changed over that time compared with the change in the average food store? Are we going to let that happen again over the next decade?
Back to the chasm
Let me come back to the chasm and why it’s so important. The division of labour in my home is routine items versus fresh and new products. The former is going to get automated. We’re seeing subscription services taking hold like Dollar Shave and easy re-ordering methods like Amazon Dash. We’re heading for a future of Vendor Managed Inventory to the home.
Who will win and how long it takes are all to be decided but the direction is set. So that leaves the fresh and the new stuff. Food stores are going to focus more and more on these and emotions really will rule. For suppliers, if you’re not fresh and you’re not new, and you’re not bringing excitement or helping the retailer to differentiate, you’re going to get marginalised in tomorrow’s food stores.
As always, our shoppers hold many of the answers and here are some of the suggestions made to us recently:
- More opportunities to taste and try
- More staff in store who really know the products and can give good advice
- A special zone where you can see all the new products
- Recommendations, as you see on Amazon – if you enjoyed that, we suggest you try this…
- And one shopper talked about some quirky tweets from Sainsbury’s that sounded like a real person – he wanted companies to sound like this more often
We can also learn from the best of retail across the world.
A year ago I was massively impressed by some stores I saw in the Philippines. One of the largest retailers there is called Robinsons and their shops were bursting with character. Their big theme is health and they’ve really gone for it. No-one who shops at Robinsons can be in any doubt that it stands for healthy eating. But they also offer lots of local specialities, new products showcased in special areas.
In other parts of the world, Wholefoods Market has a microbrewery inside its Houston store. Delhaize in Belgium grows vegetables on the roof of some shops for maximum freshness. Maxima, in the Baltics, offers an electronic nose to check for product freshness. Intermarché introduced freshly squeezed orange juice, printing the time each bottle was filled on the label and using this as the product brand.
Meanwhile, a Korean convenience chain called CU is partnering with a variety of local businesses, such as restaurants and banks, on a series of concept stores, while several retailers are testing out robots.
Retail creativity is alive and well, and a select few manufacturers are contributing. Some suppliers are really getting behind healthy eating in Robinsons. In other parts of Asia, it’s common for branded suppliers to lease parts of the store to build dramatic showcases for their products.
In Italy, Unilever has built a gelateria in some Carrefour stores. A branch of Sobey’s in Toronto includes a Nutella café. And 7-Eleven in the US has partnered with a premium soft drinks company to produce a new branded range exclusive to their stores.
But these are only scattered examples. There's a huge opportunity for suppliers to contribute so much more – and you could take the lead.
Price will always be central to trading but it’s only a ticket to play. If you’re thinking about all the needs of shoppers and what really drives their behaviour, you need a much wider dialogue.
I hope I’ve been able to stir your emotions today. We’ll only unleash the passions in our shoppers if we feel passionate and bold ourselves.
Stop thinking so rationally
In a business environment, unchecked emotions can be dangerous. We train ourselves to be calm and we pride ourselves on thinking rationally. It’s great for harmony, but it’s not the normal human condition.
So let's stop thinking so rationally, all of the time, and build our emotional intelligence. Food, drink, health and beauty are some of the greatest pleasures in life. They should really stir the emotions – we shouldn’t be halfway on the gauge.
We don’t have to sacrifice excitement for efficiency – we need both. Let’s engage differently with our customers. Let's build a strong and powerful relationship. And let’s make sure we don’t get stranded in the chasm!