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08/13/2020

Avocado Roulette & Why In-Store Employees Are Key to Online Revenue Growth

Turmoil, upheaval and uncertainty — these words were already on grocery executives’ minds before the COVID-19 pandemic turned the world upside-down. At the time, they were facing a potential explosion of online shopping, which FMI predicted will comprise over 20% of grocery spend by 2025.

Fast-forward nearly a year later, COVID-19 accelerated that slow-moving shift toward the new norm for many grocery consumers. According to FMI, the transition to weekly online shopping (as a portion of all grocery spend) skyrocketed to 27.9% within the first four weeks of a lockdown that impacted 94% of the U.S. population. This shift is remarkable, considering that only 10.5% of grocery spend was online a year earlier. And perhaps more impressive is the strong adoption of this channel among millennial and Gen Z consumers.

The grocery workforce, who primarily staff and operate brick-and-mortar stores, was impacted deeply by this sudden shift to online shopping. Instead of stocking and tidying up shelves, checking out customers at the register, and keeping aisles clean, employees are now expected to fill online orders. They were suddenly expected to pick high-quality perishables like produce and meat, ensure deli meats are sliced to order, and recommend equivalent substitutions when an ordered item is out of stock.

This paradigm shift to online shopping marks the beginning of a new era for the grocery industry. And somewhat paradoxically, it means that the in-store employee experience will likely become even more critical when creating customer experiences that build brand loyalty and grow online and offline revenue.

Avocado roulette and the unique value of in-store shopping

Although the adoption of online grocery shopping will likely decrease somewhat when the pandemic is over, analyst data indicates that the next generation of customers may prefer this channel in the long term. FMI reported that the highest rate of adoption appears among future generations of consumers, starting with millennials with kids (65%) and with Gen Z (54%) and Gen X (43%) following close behind.

The growth in online shopping has also heightened customer awareness of the differences between buying perishable and non-perishable items. When it comes to buying perishable items, only 8% of consumers favor online shopping over in-store purchases. This realization is humorously captured by a new concept called “avocado roulette,” which refers to the experience of shopping for a sensitive perishable product online without touching or smelling it to ensure quality and freshness. You never know what kind of avocado will show up: ripe, overly mushy, or hard like a rock.

This contradiction highlights a critical truth about the grocery business' current direction: In-store shopping will always provide advantages over online shopping when it comes to buying perishable products. This is especially the case when size, color, ripeness, taste, texture, smell and other characteristics vary widely across the same items. Stores can use the unique experience associated with shopping for perishable items to differentiate themselves from online retailers and build customer loyalty for both online and in-store purchases.

Internet shopping has and will continue to increase, but it will never remove the need for a personalized, human touch in the grocery customer experience. To deliver the value, convenience and experience that will shape customer loyalty both on and offline, store leadership must equip in-store employees with proper product training, improved engagement and retention, and make in-store processes more efficient. Doing so enables employees to stay focused on activities that matter most in a store – which are the customers, not the products.

Customer and employee experiences deliver future growth — together

The Internet can do a lot of amazing things, but it can never provide an authentic human connection between stores and their customers — only people can care for other people.

Customers want personalized advice on which cut of meat is the best for a specific recipe from an expert butcher and how to choose a melon that's ready to eat that day from a produce specialist. But most of all, they want to interact with someone who cares about them, guides their shopping choices, and offers tips on the best way to use different products.

So how can stores prepare their employees to deliver such a high-value experience? By revamping talent management practices to address four things that frequently undermine the employee experience in grocery jobs:

1. Rethink the low-wage, high-turnover employment model for store associates: Increase people’s expectations of what it means to be a grocery worker by viewing most positions as highly skilled jobs with good, long-term career prospects. Employees should be considered as experts who engage, advise and educate customers throughout the shopping experience. This new paradigm can be established by providing employees with ongoing, meaningful training and translating skill growth into adequate pay and benefits.

2. Respect employees as assets to be maximized, not costs to be managed: Actively listen to their opinions about work and what would make them more productive and engaged.

3. Understand customer needs and provide high-value products at reasonable costs: Measure customer expectations and preferences and use modern supply chain technology to source and provide cost-effective, high-quality and desirable perishable items. This exercise also includes investing in solutions that provide employees with the knowledge to engage customers in exceptional interactions, instead of just fast transactions.

4. Reconsider staffing models and store layouts: Focus on store layouts and staffing models that encourage high levels of employee-customer interactions. With an analytics-based scheduling solution, operational managers can assess customer needs and store traffic on an hourly basis, then match that information to existing skills. This insight inspires the creation of innovative scheduling strategies that increase employee engagement, customer satisfaction and store performance. Meanwhile, customers will likely leave the store with a memorable service experience.

A better version of the grocery industry is emerging

As challenging as the pandemic has been, I remain an optimist for the grocery industry. What I see happening is an exciting opportunity for food retailers to grow revenue by redefining the future of their customer experience while elevating every employee's role and socioeconomic status.

Steve Hunt is Chief Expert Work & Technology at SAP.