Retailers are facing more challenges in 2022. There is a shortage in the supply chain and inflation is high. we don’t know when it will resolve. Therefore, this situation forces companies to increase the price and frustrate their customers.
With grocers increasing investments at an amount 1.3 times their historical levels, an increase in capital expenditures was also noted for 2021, according to McKinsey.McKinsey expects grocers to see the following trends, as the rest for 2022:
A Consumer balancing act between health consciousness and value
The pandemic and rising inflation have forced shoppers to seek out the best value for their dollar, with 90% of CEOs expecting increasing pricing pressure from consumers to continue throughout the year. 45 % of consumers plan to search for more ways to save money and 29% will research actively the best promotions more frequently. Moreover, about 40% of consumers plan to increase their focus on healthy nutrition and eating – a trend that is more widespread among millennial and Generation Z shoppers.
Promote Omnichannel expectations:
A customer’s wish for online and delivery orders increased about 50% during the pandemic and is anticipated to increase more this year. However, because of personal contact and expensive delivery charges, many still prefer to shop in-store. As shoppers expect similar assessments, pricing, and promotions across all channels, grocers are impulsed to invest more money in a seamless online shopping experience. App user experience, loyalty, and personalization are also becoming crucial for customers.
Importance of sustainability
More companies make decisions based on social and environmental issues, because of consumers becoming highly aware of the result of their purchasing behaviors. As McKinsey found, among 500 wealth companies, 44% are integrating environment, social, and governance practices into their business strategies, and 76% of customers buy or boycott brands based on values.
Encourage investments in Tech and Analytics and workforce planning:
Changing workforce needs are stimulating grocers to find a path like reskilling their employees, adding tuition reimbursement programs at The Kroger Co. and Publix Supermarket, Amazon’s free education to employees through its career choice program, and Walmart’s Better U program. The report found that by giving importance to technology and artificial intelligence, 54% of current work activities in retail can be automated.
Making broader ecosystems and partnerships:
It is important to improve margins and create business growth for today’s grocers, and customer loyalty, data, and partnerships can be supported to broaden their ecosystems. Combining strengths with technology and third-party delivery companies can help retailers gain cost efficiencies and e-commerce reach, and innovative value propositions for customers. Best grocers will be defined by the innovation, differentiation, and defensibility of their strategies”.
The above 5 trends will be helpful for grocery executives to navigate successfully and perform well in the upcoming year.
In today’s world, grocers will have to be creative to attract and retain customers. Grocers will need to make use of their data. And also to enhance their business model, grocers will have to engage in creative partnerships. Retailers can remain in the leading of innovation, through creativity, intention, flexibility, and the wish to always change with the times.