CEOs who focus on consumers’ needs and create unique and seamless experiences will come out on top, according to the 22nd annual CEO Survey—Canadian insights. Successful retailers use technology to create “frictionless purchase journeys” with their customers similar to the customers’ interactions with personal technology, according to the Consumer Insights Survey (CIS).
At a broader level, digitally native brands are taking over traditional industries and disrupting incumbents by combining digital and physical approaches. While Amazon.com is changing the grocery industry in the United States, Canadians told us they still prefer to shop in-store for their food items. While 65% of the global CIS sample did at least some shopping with Amazon.com, out of that percentage, more than one-third (34%) said they shop more frequently because Amazon.com makes their experience easy.
When in-store, 52% of Canadian respondents said the ability to quickly and conveniently navigate the store, followed by quick and easy payment methods (32%), including mobile and contactless payment, would significantly improve their current in-store shopping experience. These findings reinforce that Canadians are looking for a convenient, in-store experience when making their micro-shopping trips for groceries.
While online grocery shopping has been available for some time, Canadians still prefer an in-store experience. Only 20% say they would be “likely” to purchase groceries online in the next 12 months, with 69% saying they were “unsure or not likely”.
The main reason consumers told us they prefer in store trips versus online ordering is they prefer to see and touch the products, while others enjoy the experience of discovering new products in-store. Nearly half of respondents said they have concerns over the quality of products, and just over a quarter said they believe food could be damaged in transport.
The survey also found that Canadian consumers make trips more frequently to their local grocery store throughout the week, rather than save up for one big shop on the weekend. Just over a quarter (26%) said they make “micro-trips” to grocery stores or supermarkets (i.e. in-store trips less than five minutes long) two to three times per week, 23% said weekly and 10% said daily or more.
Consumers are hungry for organic, local and sustainable produce
Sustainability is no longer a “nice to have” for organizations to be seen as socially responsible, but a “must have” if retailers want to meet consumers’ demands. Businesses are responding by looking to their supply chain to cut costs, promote efficiencies and, in general, become more sustainable. While balancing social, environmental and economic considerations is good for the planet, it’s also good for the ROX bottom line.
When it comes to paying a premium for groceries, some consumers we heard from said they are willing to stomach a higher price tag if food items are more sustainable. In terms of sustainability, food items being organic, sustainably packaged and produced are top of the shopping list, followed by eco-friendly packaging, a sustainable product and one that’s ethically produced. The trend for locally produced is particularly high among 18–24-year-olds, with 74% citing this as important, followed by 70% for organic and 49% for sustainable packaging.
When asked how they purchase items in a sustainable way, the majority of respondents said they avoid the use of plastic where possible like plastic straws and cutlery, and they buy items with less packaging. Other methods include looking for products with environmentally friendly packaging, buying sustainable products to protect the environment and buying brands that support sustainable practices.
In addition to sustainability, consumers are increasingly desiring health and wellness grocery products more and more, driven by external factors like the recently released Health Canada food guide. This demand for healthier products is also being driven by the following trends, according to Canadian Grocer:
Specialty stores like meat markets, green grocers and fishmongers continued to gain ground in 2018, with sales growing in every province except Alberta. Other factors contributing to the rise of the specialty food store include changing consumption habits, with growing preference for plant-based food and humanely raised meat, along with the rise of conscientious investors who are focused on climate change.
Grocery stores are becoming the next “community centres,” where people choose to shop in person not only because they want the freshest produce, but also to fulfil the need for human connection. For example, this could include park benches in the aisles or patio space to foster social interactions.
A third of Canadian respondents said they’re willing to pay a premium for non-food items that are either sustainably or ethically produced. This was followed in popularity by items with sustainable packaging (32%) or eco-friendly offerings (32%).
Similar to food items, responses to questions around non-grocery items showed a strong inclination toward sustainability. In general, we are seeing in the market that while it was once cool to never wear the same thing twice, now it’s in poor taste not to.
Recently, there’s been increased exposure on how the fashion industry is one of the largest culprits of pollution. In 2015 alone, it added 1,715 million tonnes of carbon dioxide to the atmosphere. With the rise of fast fashion, clothing has become almost disposable, adding more to landfills every year. What’s more, the easy (and very inexpensive) access to trendy items has fed consumers desire to never wear the same thing twice.
Offer “click and collect” services, so customers can do their shopping online while at work/on the train commuting and then pick up their items at a location close to their residence. This allows them to see the quality of goods in-store while saving time, addressing what Canadians identified as important to them in the survey.
Offer incentives for repeat purchases through a loyalty card program, that tracks what customers normally buy. This shows the customer that the business has applied their knowledge of what products are important to them, helping to improve their return on experience (ROX).
Leverage the power of the mobile device to offer mobile payment solutions (i.e. contactless payments) and engage with consumers to create a seamless, enjoyable and convenient grocery experience. This supports micro-trip shoppers who are looking for a quick, easy experience.
Take steps to become more sustainable, such as creating a more efficient and reliable supply chain; choosing logistics companies reducing their environmental footprint. By becoming a more sustainable brand and one your employees believe in, you will naturally attract more loyal customers.
Provide your customers with transparency to help them understand where, when and how often their food is sourced. This will satisfy customers concerns for their health, environment and even the well-being of workers. More sustainable practices and transparency call for increased investment and improvement of supply chain practices, reporting mechanisms and training of employees. By investing in such practices, retailers will gain customers’ loyalty and trust.