Samantha Osborne, General Manager of Cartology NZ on why the future of retail marketing is so much more than just omnichannel.
Retail marketing is no longer about in-store versus online, it’s about meeting customers how and where they choose to shop. Are these changed shopping behaviours are here to stay?
Grocery shopping is the one constant in our lives. Regardless of age, gender, affluence or location, everyone must eat and by inference, everyone must buy food. Its omnipresence means that supermarkets have and always will be a mirror in which societal shifts are reflected. Shifts such as a pandemic, growing climate awareness, financial crises, tech adoption, the list goes on.
Behavioural disruption has triggered new fulfillment methods, with more than three out of four consumers changing the way they grocery shop due to the pandemic. They are shopping faster (33 percent), at quieter times (32 percent) and 50 percent of online grocery shoppers first grocery shopped online less than a year ago. While many will revert to old habits, enhanced digital literacy and the growing desire for ultra-convenience ensures that new and enduring shopping habits have been formed.
Thirty percent of shoppers are now omnichannel, shopping both online and in-store at least once a month. These shoppers are more open to discovery of new products and have higher levels of shopping enjoyment, as compared to those who shop in-store or online only.
We’re now seeing two types of customers: the functional shopper prefers the online shopping environment with its efficient and ordered nature, while the emotional shopper seeks the in-store experience for inspiration, product discovery and ease of navigation from aisle-to-aisle. These needs aren’t mutually exclusive and it is up to brands to show up in the right way, at the right time to meet the customer’s prevailing mindset. Kiwis also miss taking time to enjoy shopping as a social, relaxed and fun occasion, with 28 percent missing people and contact; 18 percent missing feeling relaxed and taking their time to shop, and 15 percent missing browsing and discovering new products.
Since the pandemic, grocery shopping has become even more important as a source of interaction, for inspiration and in creating a sense of connection and belonging. Omnichannel allows customers to tailor their shopping behaviour to suit their mindset.
During the pandemic in 2020, 1.36 million Kiwi households made an online purchase for the first time and shoppers expect their online shopping frequency to remain 28 percent higher than before the pandemic. Customers have digitally upskilled, with brands and retailers innovating to meet these customer needs. The rapid digitisation has dramatically impacted the way we shop for food; there are now multiple ways to plan, order and deliver your grocery shopping.
Traditional paths to purchase have merged and heightened consumer expectations are fuelling the need for a frictionless, seamless and consistent online and offline customer journey and experience. This means that shopping has become a ‘choose your own adventure’ across in-store, online, and click and collect.
Digital literacy has also rapidly advanced customers’ expectations of brands. Customers crave convenience and are looking to be able to transact across multiple categories and retailers at once. The explosion of e-commerce has cemented omnichannel as the way forward. It’s no longer about in-store versus online, it’s about meeting customers how and where they choose to shop.
How can marketers best reframe their in-store activations?
Everything and nothing has changed about the way we shop. Shopping behaviours remain extremely habitual, it’s embedded in our lives. When we think about grocery shopping, we still think it’s about fulfilling basic needs. It’s a simple mental picture which has remained for years, however, is at odds with the complexity of how we interact with supermarkets today. The store itself plays an important role in our day-to-day lives. It’s a community centre, a theatre for brands and more. In-store is still considered the ‘proper’ way to grocery shop, with 62 percent of shoppers agreeing with this statement. 89 percent of Woolworths’ sales are still being made in-store and one in five love to grocery shop. Almost 74 percent say in-store is still their preferred way to shop.
Customers value sensory in-store experiences now more than ever before, such as the ability to select their own produce and to interact with team members.
Those who love grocery shopping are much more interested in discovering new products, but they are also more likely to confidently shop online for groceries.
Even for those who regularly shop online, half would still prefer to shop in-store, especially for smaller shops. Despite a 53 percent increase in e-commerce, in-store is still the engine that drives the grocery shopping experience.
There are three key missions that punctuate the way we shop:
The Planned Big Shop: “I used to do one big shop with my partner. We would plan all of the meals we wanted to make and write down everything we needed.”
The Unplanned Top-up: “I would run in to grab a few things we forgot or ran out of.”
Cravings Driven Pop-in: “The ‘pop-in’ is normally based on something I have a hankering for – so I will shoot down and get it so that I can have it there and then.”
Are in-store experiences going to be replicated online by shoppers?
Customers are applying the behaviours learned in-store when shopping online posing an opportunity for brands to translate the best of in-store into a digital experience.
In full control of their journey online and offline, customers are seeking what they want, at the moment they want it.
Despite the push and pull between online and in-store, both experiences hold importance for customers and they want brands to show up in those crucial moments of their journey. Customers are also expecting elements of discovery and inspiration.
There is no more profound theatre for brand interactions than the omnichannel retail environment. How do marketers better tap into this?
The million dollar question for FMCG marketers is, ‘How do we fulfill brand marketing upper funnel needs, when so many decisions are product-first, closer to the point of purchase?’
The answer might surprise you: theatre. There is no more profound theatre for brand interaction than in the supermarket, and if the theatre translates to a purchase, there is no more profound impact on future brand consideration. Customers are keen to explore and lean into sensory experiences where brands stand out. Major in-store activations encourage trial and drive new-to-brand customers, while price promotion continues to disrupt established buying behaviours.
Inspiration to purchase now comes from multiple touchpoints that blend online and offline channels. This has given rise to the concept of ROBIS – research online, buy in-store. The omnichannel customer is now a reality with 61 percent of Countdown online customers researching online and buying in-store within four days.
Brand reputation is built through multiple touchpoints, with omnichannel shoppers engaging with more of those touchpoints. Omnichannel shoppers are twice as engaged with brands than shoppers who only shop in-store. Trust in the product is paramount and brand is the ultimate shortcut, with 41 percent of shoppers preferring to stick with supermarket brands they know and trust.
Customers need to be guided through the purchase journey now more than ever. Showing up across channels in a continuous, relevant and consistent way is vital to converting customers to purchase. Brands can provide the platform for experimentation and exploration of new products and categories, with 38 percent of shoppers actively wanting to hear from and discover new brands.
What will this reimagined customer journey look like in the next five years?
Omnichannel demands a continuous cycle of inspiration and exposure. Cultural shifts in the past five years have evolved the customer journey, including changes in personal lifestyles, to increasing environmental consciousness, better technology and more choice. Customers continuously fluctuate between awareness and consideration as they are exposed to more messages across multiple touchpoints. The shopping environment does not exist in a vacuum. Customers are arriving in retail environments with more information than ever before. Purchase decisions are influenced by everything that occurs before opening a search tab online or walking in-store as well as what happens in the moment. Effective marketing pre-shop can mean that a simple nudge while shopping is all that it takes to convert to purchase.
Shopping is an ongoing journey of discovery with 30 percent of all customers shopping both online and in-store at least once a month.
Each of these channels of discovery contribute to a well-stocked mental pantry of all the products and promotions that a customer is aware of. A shopper continues adding to this mental pantry each time they come across new information. And gaining a place in this mental pantry is key.
Lists remain key to the planning and purchasing process for 59 percent of people who made the most recent grocery trip (62 percent in-store and 58 percent online). However, those who like to discover new products are more likely to use a list (61 percent) and are much more likely to buy items not on their list (71 percent). The paper list however, has had a digital facelift, with shoppers increasingly embracing technologies to curate their lists such as fitness and meal planning apps and saved lists online or in-app. While lists dominate, there are also opportunities to influence purchases, with 28 percent of items purchased driven by push factors (such as promotions or special offers). Discovery also plays a significant role, impacting 26 percent of purchases in-store and 36 percent online. The most salient product at point of purchase wins.