Looking beyond the pandemic
Customers are watching closely, and those grocers doing the right things during the crisis stand to win big
It seems surreal that a few months ago, grocers were still thinking up ways to differentiate from their competitors while also reducing staff to keep prices low as wages increased.
Now, suddenly, all that has flown out the window as priorities have drastically shifted with consumer behaviour following suit. Now, it’s all about the people. Basic ideas of what grocery shopping means have forever changed; assumptions about food safety, e-commerce, value and necessity have all transformed literally overnight. These are common factors that all grocers are now facing to meet the demand of a public whose retail options (read: reasons to leave one’s home) are now pretty much limited to grocery.
As of this writing, we are still in the reaction phase of the pandemic. While people have begun to adjust to what some call the “new normal,” we are still eagerly anticipating the end of the crisis, the “recovery phase,” when we can all start returning to our normal lives. When we reach that recovery phase as Canada opens back up, things will either hit the ground running or we will see a shift in behaviour and people will take some time to resume being as mobile as they once were. Much depends on how deep a recession Canada will be in, and how “value” will be redefined.
Meanwhile, grocers are now posting record numbers, but shoppers still have certain expectations from an experience, value proposition, and company values perspective. Grocers would be remiss not to realize they are staring down the barrel of a loaded gun: that is public opinion of their operation now, when it all counts, and how they will be regarded when we finally shake off the lockdown. How grocers operate now to manage COVID-19 fears when all attention is on this industry is crucial. Customers are watching and will not forget how grocers treat and remunerate their staff, the quality of staff training they provide, how hard the store has worked to maintain social distancing and protect customers, how clean the store is kept, pricing control, keeping the shelves stocked, and how they listen to customer concerns on all forums—even if many of those concerns come from a (mostly understandable) place of impatience, fear and confusion.
Customers are, indeed, now watching very closely and will choose with extreme prejudice who they will continue to give their business to when this crisis is all over. At the moment, those grocers who appear to be taking the most precautions, who are paying staff fairly (and treating them well) and who are not price gouging, are carving out a special place in the hearts of customers who view grocery stores as heroic.
In other words, heady times will continue for grocers who are proactive about making people feel good about shopping at their stores. A key takeaway is that now, more than ever, all attention is focused on what each grocer stands for because we have a captive audience.
Forward-thinking grocers are seeing this time as the best time to make bold public relations moves to drive home what makes each store worthwhile and are even using this time to collect data on behaviour, products, categories and spending habits. Looking ahead, it will be important to pay attention to the lessons learned during the pandemic, particularly on things such as choke points, traffic flow, restocking efficiency as well as customer experience. Retailers who apply those lessons will come out of the current crisis stronger than ever.
With shoppers cooking at home more, private-label items are also back in the spotlight in a big way. The impending recession will likely warrant a price-sensitive private brand strategy similar to the last two periods of financial decline. However, while brands such as No Name will likely see a significant uptick in units sold, retailers will find that a private brand strategy that addresses pricing concerns but also offers an impression of quality (value) will be a winning combination that will pay off now and last long beyond the pandemic.
An important part of understanding the “new normal” and making it to recovery will be the need for grocers to work with partners to study their shopper now to future-cast what will stick, what will shift to another behavioural trait, and what will go away during the recovery phase. Being equipped with this insight will help grocers be operation-ready to receive this “new shopper” and give their customers the confidence that they will continue to be the right grocery retailer to service them well into the future.
Based in Toronto, Michael Nussbacher is vice-president of business development at Watt International, a world-class integrated retail agency.
This article appeared in Canadian Grocer‘s May 2020 issue.