The Battle for Grocery in the Digital Age

Publicis Sapient explores how the successful grocers of the future are transforming their market strategies at the 2019 Blackhawk Network Summit

As shopper behavior continues to move toward new digital services, the battle for consumer wallet share in online grocery is growing fiercer. While only 5 percent of grocery transactions occur online today, growth in online grocery sales is set to accelerate to more than 20 percent in just five years as the connected economy matures, to reach $100 billion by 2025.1 It is a battle no grocer can afford to lose so meeting the evolving expectations of consumers has become crucial.

Consumers are demanding faster and more complete experiences and have radically different ideas of “traditional grocery”, according to a presentation by Jon Reily, Vice President of Global Commerce Strategy Lead at Publicis Sapient, at the 2019 Blackhawk Network Summit in San Antonio, Texas. Reily explained that consumers’ changing preferences and rising need for convenience give them leverage in how they deal with grocers, and grocers need to put the mechanisms and channels in place to meet consumers’ needs, on consumers’ terms.

As demographics continue to shift and new consumer perceptions of traditional grocery develop, what has worked in the past will not work tomorrow especially. According to Reily, successful grocers of the future will be the ones who are revisit their core go-to market strategies, change how they compete and win in the digital age, and build a relationship with consumers early on.

Branded payments can help. Research shows that branded payments increase customer acquisition by 28 percent over discounts and that loyalty programs can drive 200 percent higher engagement with digital reward cards.2 Only a third of consumers have received gift cards as part of a promotion, leaving much room for marketers to maximize the benefits of this strategy in grocery and other traditional retail environments.3 To learn more about how the grocers of the future are expanding their digital footprint and ecommerce capabilities to respond to customer expectations while overcoming challenges, download Reily’s presentation, The Battle for Grocery: How Traditional Grocery can Compete and Win in the Digital Age.

1 “The Digitally Engaged Food Shopper study” includes a Food Marketing Institute online assessment survey by retailers and manufacturers on the FMI website from February to November 2017. The study is also supported by interviews with FMCG retail and manufacturing executives and used consumer information from Nielsen’s Digital Shopper Fundamentals survey, 2017.

2 The findings were derived from internal sales data from Blackhawk Network during 2018.

3 “Gift Card State of the Union” is an online survey conducted by Murphy Research on behalf of Blackhawk Network between February 4 and February 12, 2019. The sample size of 3,389 U.S. consumers was comprised of respondents between the ages of 18 and 75.

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