The digital transformation is proving to be an invaluable evolution in the way businesses reach their customers, particularly in an age of social distancing and reduced physical contact. Grocery retailers are in a strong place to benefit, but many have been playing catch-up in the race to digitize.
While companies like Shipt and Instacart have made it possible for many retail establishments to offer online delivery services, the digital transformation involves so much more than that. It effectively opens the door to greater customer interactions, with an even greater opportunity to turn every brand impression into a transaction.
A World of Change
It’s rare that the world changes overnight, but our way of living — particularly the way we work, play, shop and travel — was quickly turned upside down when the coronavirus pandemic began to spread internationally. The initial safety guidelines, which included social distancing, have prevailed even as nonessential stores were re-opened and as stay-at-home orders were lifted.
We continue to see a situation where shoppers visit stores while still practicing social distancing, including reduced contact with cashiers and point-of-sale terminals. According to a report by Mastercard, 79% of shoppers worldwide now use contactless payments. This includes 40% growth in contactless transactions during the first quarter of 2020.
Consumers also turned to home delivery to acquire the products they needed without having to venture into crowded stores, prompting Shipt and other delivery services, as well as online retailers, to hire more drivers and independent contractors. The expectations consumers have grown accustomed to on digital platforms are now extended to retailers who must invest to meet them.
These changes are just some of what has transpired over the last several months and are likely to be part of many more to come. Up until now, some grocery retailers have lagged behind more modern retailers that quickly embraced the digital transformation. Operating in an essential but relatively low-margin space, grocers had traditionally chosen to stick with what they knew to keep costs low in a sector that shoppers happily support.
Everyone needs groceries. But they have had to quickly adjust in the face of COVID-19, which fueled numerous changes to consumers’ daily lives and greatly transformed their shopping patterns.
As grocers adapted to the current climate, they are also now living in a new reality in which shoppers may not be exposed to the same interactions as they were before the digital transformation. It is now paramount for grocery retailers to rethink the consumer engagement model and find ways to ensure that shoppers are genuinely impressed.
The First Moment of Truth
As consumers discover new ways to shop — whether at home via delivery, outside stores for curbside pickup or in-store but as contactless as possible — grocers are catching on to this mixed mode of shopping. Encompassing all forms of digital and physical retail, shoppers are likely to continue relying on this mixed mode for simplicity and convenience even after the pandemic has subsided. And that means the first moment of truth — the point at which customers first encounter a brand — is more critical than ever.
The consumer engagement model is no doubt evolving — with the click of a button, shoppers can order virtually anything from anywhere. But that doesn’t mean that the web is where shoppers will experience their first moment of truth. In reality, it could be anywhere — in a store while shopping for unrelated products, through a sponsored post on social media or from a traditional TV ad, to name a few.
This means that brands must think about all of these potential outcomes when forming their omnichannel brand strategy. As daunting as that might sound, retailers should see this as an opportunity to form a cohesive campaign that successfully attracts consumers and inspires action across the board.
Everything must be considered — from packaging and displays to digital promotions, social media and beyond. The experience consumers have on the web or in-app must be on par with that of a physical encounter at retail. Brand messaging should be clear, consistent and resonate with shoppers — creating an end result that directs every impression toward a successful transaction.
Retailers Should be Ready to Impress with their First Impression
Going forward, it will be crucial for brands to win their first moment of truth with shoppers. The pandemic may have shifted how they shop, but it has not altered the need for retailers to connect with consumers in a meaningful way.
By focusing on messages that best serve prospective buyers in the channels they are in, brands can build and maintain lasting relationships with their customers. And by continuing to innovate with digital commerce opportunities, grocers can do the same in this new world of shopping.