No experience happens as often, grabs share of wallet, and stimulates the senses more than grocery shopping, finds PwC US in a new report titled Experience Radar 2013: Lessons from the U.S. Grocery Industry. The study, which is one in a series of customer-centric reports, measures the experiences of about 6,000 U.S. consumers across multiple industries.
Facing commoditization, grocery has turned to experience to grow their top lines and maintain margins, according to the report. Additionally, PwC reports that today’s shopper is armed with mobile apps and virtual offers, depends on just the right blend of self-service and helpful staff, and is increasingly immersed in an interactive environment.
“Today’s shopper has specific expectations and retailers must be ready to cater to the widest range of consumer preference and demands,” said Susan McPartlin, PwC’s U.S. retail & consumer sector leader. “Leading grocers must balance the threats of fierce competition, commodity price fluctuations and margin pressures, while meeting changing customer expectations and determining how to deliver an omnichannel experience. Grocers should not only accept, but relish their role as the testing ground for best-in-class customer experiences.”
“So much of what is important to the creation of a customer’s experience – convenience, presentation and quality – can be found in grocery, the pinnacle of where products, services and environments intertwine,” said Paul D’Alessandro, PwC’s U.S. customer impact leader. “Grocery is the learning place for all industries to figure out how to use meaningful experiences to create a path to loyalty and price premiums.”
The report defines the five behaviors that companies can adopt to enhance customer experience and create value:
- Make it Fast: Fast lines matter the most in convenience and fast checkouts account for 30 percent of memorable great experiences. Be transparent with “waiting” by empowering customers with information on checkout times and wait times. Boost digital convenience and savvy with mobile checkouts and coupons that let shoppers check out on their own via smartphone apps and staff handheld devices.
- Emotionalize shopping: Create relationships with customers by evoking positive emotions based on what they care about. With 10 percent of premium customers willing to pay for a storewide discount loyalty program, personalize shopper experience by investing in robust loyalty programs to reward customers with personalized deals. Customers embrace brands that reinforce their lifestyles. For example, expand organic offerings to lure the fast-growing number of consumers who care about their organic lifestyle and are often willing to pay a premium for organic produce. With growing awareness of global warming and recycling, invest in sustainable solutions to bring shoppers in the door.
- Balance high-tech with high touch: As the most important factor in determining preference, staff quality impacts where customers shop one-third of the time. As most customers still shop for groceries in person, invest in employees to deliver engaging experiences, motivating shoppers to return and employees to stay. While high-tech self-checkouts are essential, some customers feel more at ease with conventional methods and will pay a premium for attendant checkout to avoid technology difficulties.
- Avoid spoil: Shoppers are easily frustrated and two in five customers never return after a bad experience. Customers often do not provide feedback to their grocers, but they are quick to warn their social networks instead. 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, customers are inundated with product information and seek ways to make easier shopping decisions. Invest in a labelling 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.
“With 98 percent of shoppers still shopping for groceries in a physical store, staff can make or break a shopping experience; rude employees account for almost a third of bad experiences,” said Lisa Feigen Dugal, PwC’s U.S. retail & consumer sector advisory leader. “To keep customers coming back, grocery retailers must call on the newest technologies such as geo-tagged mobile coupons as well as those tried and true interactions such as a cashier’s smile in addressing the most demanding customer.”