GMDC Report, Expert Panel Examines Shopping Trends and How to Shape Grocery Stores of the Future at 2019 International Home + Housewares Show
CHICAGO (March 3, 2019)—It’s no secret that online sales have disrupted traditional retail models. But bricks and mortar grocery stores can increase their share of the spend with housewares and by adjusting store experiences to meet changing consumer needs, according to a new report from the retail industry trade association Global Market Development Center (GMDC) that was previewed today at the 2019 International Home + Housewares Show.
Owned and operated by the International Housewares Association (IHA), the Show is being held March 2-5 at McCormick Place here and features more than 2,200 exhibitors and 60,000 total attendees from 130 countries.
A preview of GMDC’s Share of the Spend Report 2019 (to be released in April) was shared by Mark Mechelse, GMDC vice president, insights & communications, and report partner Mike Anthony, CEO, engage. They were joined in a panel discussion by Sheri Best, business unit director/DMM, H-E-B; Greg Hott, director of general merchandise, Weis Markets; Peter Fahrenkopf, vice president of sales, ShurTech Brands; and Scott Bradshaw, senior vice president of sales, Bradshaw Home.
“There are two myths that we want to debunk today,” said Mechelse. “Those myths are that everything must go online, and omnichannel kills all impulse purchases.”
Traditional shoppers still exist, measuring between 40-60 percent, depending on the survey. Even within a category that sees a lot of online shopping, only a small percentage of consumers buy that category exclusively online. What’s more, 7 in 10 shoppers who order food online from a grocery website and go inside the store to pick up their orders end up buying additional items in the center aisles where nonfoods are merchandised.
“Most people are open to some extent to buying online or offline,” said Anthony. “The battle is there to be won.”
And while online shopping will certainly increase in coming years, online sales growth in both housewares and food & beverage is forecasted to be much slower than other categories, according to Planet Retail. For example, 1 8 percent of housewares will be purchased online by 2023 and 13 percent of food & beverage, compared with 91 percent for books, music and video and 66 percent for office and school supplies.
So why do the digitally engaged shop online? Convenience, cost, curation and experience, Mechelse noted. “In our research, we are tracking how and when the shopper thinks ‘I need to buy that from my phone,’ or ‘I need to make a trip to the store.’ As retailers elevate their experience and make it more immersive, stores will begin to see their loyalty increase.”
The experience part is not a reflection of positive reactions to online shopping; it’s an issue of negative reactions to shopping in physical stores, Anthony said.
Citing the example of Alibaba’s successful Hema grocery stores in Asia, Anthony declared: “We need to evolve the shopping experience to recognize that shoppers are shopping differently than they were before.”
According to Mechelse, GMDC’s vision of the store of the future is one that is highly engaging, communal, health focused and service oriented.
How to get there?
- Recognize that some categories probably aren’t winnable and focus on those that are.
- Re-configure stores for convenience and provide a curated selection for the local shopper.
- Capitalize on the mission-centric impulse and what makes sense for the shopper on this specific shopping trip (this is a great role for housewares in grocery stores).
For Best of H-E-B, “It’s all about the shopper experience. 100 percent.” She used the example of the wide variety of can openers her store carries and how important it is for customers to be able to hold them in their hands and try them out.
For Hott of Weis Markets, “It’s all about convenience. That’s the time-starved nature of our society today.” Recognizing that many of their customers are busy parents, he said his store has seen success in increasing the pet and baby categories (not just food, but wellness items and toys as well), and by making it easier for customers to grab to-go meals.
Bradshaw of Bradshaw Home said they know their products are highly impulsive buys, so they have been successful working with grocery stores to capitalize on those impulses. Cross-promoting with food products and using eye-catching merchandising have paid off.
As for ShurTech Brands, Fahrenkopf said their home and office products have done well in grocery stores because of the immediate solutions they offer to small projects. He also sees significant opportunity for both vendors and stores to use technology to show customers, particularly Millennials and Generation Z, how to use their products to solve their home projects.
The panelists all agreed that localization was a key component to store success, whether curating products to appeal to shoppers at different stores, partnering with local civic groups on programs or buying from and promoting local vendors.