Facing commoditization, measly margins and outside-channel competition, grocery stores have become the hands down winners among channels at delivering top-notch "experiences" to shoppers, according to a report from PwC US.
The report, Experience Radar 2013: Lessons from the U.S. Grocery Industry, measures the experiences of about 6,000 U.S. consumers across multiple industries. Unlike traditional customer segmentations based predominately on demographics, the service analyzes "hard economics" like value measures, price elasticity and churn metrics to reveal customer trade-offs between different sets of experiential features and the value and willingness to pay consumers place on each. It also probes into other areas such as purchase behavior, moments of truth (MOT), and word-of-mouth marketing within each industry.
The report identifies five behaviors that retailers in other channels can adopt from grocers to enhance customer experience and create value:
Make it fast: While 37 percent report purchasing based on price, 28 percent buy on convenience. Fast checkout times account for 30 percent of "memorable great experiences." In addition to having adequate checkout staffing, retailers should "be transparent" by providing details on expected waits. Mobile checkouts — either through staff handheld devices or apps that let shoppers do it themselves — are expected to increasingly support the need for speed.
Emotionalize shopping: Evoke "positive emotions based on what they care about." In grocery, that includes embracing trends such as expanded organic offerings and offering sustainable solutions that reinforce consumers' lifestyles,. Personalized deals through loyalty programs can also build loyalty, although they must be highly-personalized.
Balance high-tech with high touch: Staff quality influences where customers shop one-third of the time. While self-checkouts have become "essential," some customers will pay a premium for an attendant checkout to avoid technology difficulties. Wrote PwC, "As most customers still shop for groceries in person, invest in employees to deliver engaging experiences, motivating shoppers to return and employees to stay."
Avoid spoil: Two in five customers never return after a bad experience. While customers don't typically provide feedback to their grocers, they do vent on social networks. Wrote PwC, "Create a vigorous social media strategy to listen hard to your customers to fix issues and create incentives for customers to provide feedback. Develop a thorough, well-advertised service recovery strategy that includes a catch-all return policy."
Empower customers to make satisfying choices: While 20 percent of shoppers rank product selection as a top purchase driver, they're also bombarded by product information. Wrote PwC, "Invest in a labeling strategy to help customers cut their clutter. Establish yourself as a trusted go-to resource by offering recipes, nutrition tips and advice to create stronger relationships. Offer new product samples and let customers try new products and return them if they aren't satisfied."