Stores are dealing with both Amazon and shortages. Brian Cooley talks to two grocery industry experts to find out more.
For the last 70 years, most of us have been able to count on our nearby supermarket having plenty of food, beverages, paper and cleaning supplies. Then the coronavirus pandemic hit and grocers faced a sales wave bigger than a holiday season, but without any warning. Add in some supplier shutdowns and a strained shipping network and sometimes it feels like shopping in the former Soviet Union. Now what?
"Will there be more outages and hoarding in different categories?" asks Michael Browne, executive editor of Supermarket News. "March was all about paper goods and cleaning, then it moved to the food side of things. What's next? Certainly meat has come up," though he doubts that will rise to the level of crisis some fear.
While overall US retail suffered its worst monthly sales drop on record in March 2020, grocery sales went the other direction with a 25% spike, according to the National Retail Federation. Millions of shoppers stocked up at panic levels, while also rueing the shortages they helped create.
When store shelves started going bare, many shoppers tried online grocery shopping for the first time, only to find "delivery windows are out seven days in some cases," says Doug Baker, VP of Industry Relations for FMI Food Industry Association. "Right now [online orders] are being picked from the same shelves as when you shop. Retailers are testing what's called micro-fulfillment which can be a small 'warehouse' right inside the grocery store" specially designed to fulfill shelf-stable items at the same time that fresh items are being picked in store aisles. Browne says this can reduce pick times dramatically and open up more online fulfillment windows.
Buying groceries online has soared during the pandemic. "25 to 30% of online grocery shoppers last month were first-time online shoppers" with the service they tried, says Browne. "But I don't think there's as much loyalty online as on the store side."
As states relax stay-at-home orders, both Browne and Baker believe the biggest challenge will be establishing in-store safety as well as the perception of it. "Full service cases may become grab-and-go cases. It's very likely we will continue to see the sneeze guards stay up," says Baker. And touchless checkout may get a big boost from new safety consciousness in stores. "It bodes well for that kind of contactless payment," says Browne. "It's not a flash in the pan and is something we're going to see a lot more of."
Browne and Baker had a lot more to say about the rapid evolution of the grocery experience. Watch the full talk with Brian Cooley to hear all their insights.
Now What is a video interview and panel series with industry leaders, celebrities and influencers covering the major changes and trends impacting business and how consumers connect in the "new normal" 2020 world and beyond. There will always be change in our world, there will always be technology helping us navigate that change, and we'll always discuss surprising twists, turns and potential solutions.