Grocery stores changing tactics to beat the competition
Wednesday, April 05, 2017
Three decades ago, bigger grocery and supermarket brands were swallowing up their smaller counterparts and squashing competition in the age-old way of business tactics. But grocery stores are no longer competing with just each other; now they must deal with their online counterparts as well.
Walmart and Target have both announced that even cheaper groceries are coming up for their shoppers
The "everyday low price" business model has worked wonders for Walmart — and not just in groceries, though it is the largest seller of groceries in America. Walmart has managed to undercut brands like Aldi, which routinely got top marks for offering the most affordable groceries in consumer surveys.
Now shoppers can save 5 to 10 percent more by opting for Walmart. Other brands, like Target, are trying to emulate this model because low grocery prices drive a significant amount of traffic to the stores. This, in turn, boosts sales in other departments as well.
About a year ago, CNBC's Krystina Gustafson reported that Walmart's ninja selling tactics should be sending shivers across the retail industry. Walmart then announced unrolling its "investments in price," which would lower prices in selected regions and help drive a faster performance.
It's not just a matter of price, though. Quicker checkouts, better in-store experiences, cleaner places and less out-of-stock merchandise would put them in a superior position compared to other retailers. Walmart also announced more investments and expansion of their grocery pickup service, which would help beat their online nemesis Amazon.
But it hasn't been all good news for Walmart. Amazon just announced a drive-up grocery store for Amazon Prime members. Customers can buy in stores or online and have their produce delivered via AmazonFresh Pickup within 15 minutes.
Amazon's low price and doorstep delivery combo has shaken the industry to its core. Some brands have been quick to catch up as they are beginning to offer the same service, if not in-house then with the help of tie-ups.
Some smaller brands have shown more ingenuity and innovation in the face of such stiff competition. One popular trend is to host beer and wine tastings, which will draw in the crowd, not just for the store but also for the alcohol brands and local breweries.
Online selling tactics are changing, too. One area where they still flounder is impulse purchases. Customers walking up and down the supermarket aisles tend to buy way more than what's on their grocery list.
Retailers are focusing on this aspect to increase site visits and sales. Targeted ads, tempting upsells, free shipping and other promo offers could just cinch the deal for them.
Amazon sales show that cross-product bundling is helping as well. Strategic upsells could work even better than the POS that has boosted traditional sales at checkout. If this works, stores with their finite amount of space may find it harder than ever to beat the cavernous web stores.
Progressive digital marketers are also focusing on emerging technologies like artificial intelligence and virtual reality to enhance their customers' e-commerce experience. They are targeting the very problem that traditional retailers pointed out — the tactile experience of shopping.
AI goes a step further to make the search more intuitive and help users get to their desired product faster. They are also focused on enabling connections between items that were hitherto unthinkable or hard to find, thereby offering seamless shopping sessions.
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