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Strategy, In-store Experience, Shopper Moments

Grocery Trends That Are Stimulating In-Store Sales

POSTED ON: 06/12/18 grocery trends

Food and beverage grocery trends are very much a hot topic, even becoming a default cocktail party, nice-to-meet-you conversation starter. It’s interesting then, with all this focus, physical grocery store expansion slowed in 2017.

But that doesn’t mean it was a bad year for the category. In fact, there was a bit of a revolution going on. In lieu of new store openings, JLL’s 2018 Grocery Report pointed out a number of trends that helped grocery stores reimagine their existing locations and find unique ways to innovate.

Here are the top three grocery store trends from the highest-performing companies, and what you can expect for the coming months for in-store food shopping.

Data-driven technology takes new strides

Retailers and grocers have always used data to better tailor the shopping experience. But now, with new technological advancements, data collection and interpretation will be more comprehensive – and more useful. Kroger is leading the pack.

The new Restock Kroger Initiative has taken data-driven strategies to a new level. Beyond just tracking foot traffic and purchasing patterns, Kroger’s research team, 84.51°, uses video analytics and infrared technology to track the time of day customers enter the store, with whom they enter and the length of their shopping trip.

Kroger is also using algorithms to determine when to replace products on the shelves based on performance. All of this data is being summarized to help stock and organize stores, and make them more efficient and customer centric.

Think of it this way: Boston has its baked beans, the South has its collard greens and San Francisco its sourdough. Each region – and each town – has a unique culture of food that isn’t always transferrable to another location.

Kroger is considering these regional preferences and channeling data to better understand – and act on – local flavors. Why waste time, money and resources highlighting or displaying a food product that doesn’t sell in a specific market? Better yet, why make a store layout or shelf display universal if it’s only effective in a few areas?

Forging partnerships for cross-industry influence

Grocers are assigning new meaning to the phrase “there’s no I in team.” Companies are partnering up more and more across industries to give shoppers a more seamless one-stop-shop experience.

According to the JLL report, “The acquisitions with the greatest implications will occur between grocers and non-grocery companies that focus on innovation and technology that can build upon digital networks, logistics, delivery, and customer engagement.”

The Targets and Walmarts of the world have been so successful because busy shoppers can get everything they need in one errand. Partnerships across industries can help grocers compete with mass merchandisers who offer food sections, including organic and artisanal – sectors that would have been unthinkable in a big-box store just a short time ago.

This trend has been implemented across many stores. Kroger and Ace Hardware have reportedly been in talks to partner up and create pop-up hardware kiosks within the grocery chain. Stop & Shop has had a Staples section for over a decade. And CVS joined forces with Target to include CVS-branded pharmacy clinics within each of the Target stores.

These partnerships seem to be taking a page out of the pop-up book, and Best Buy’s new micro-store strategy. Like pop-ups, these mini-stores are good ideas for brands that don’t want the overhead of a long-term lease and physical store but still want to have a presence where shoppers are likely to respond.

In another turn, Whole Foods just announced that their newest store in New Jersey will have a home and garden store-within-a-store called Plant & Plate. The health foods giant recognized that housewares are a growing category for profit and invested in a dedicated store section for products that complement the grocer’s raw and prepared food offerings. Though not a real partnership, this emphasizes the growing trend of micro-stores and crossover shopping.

Private labels go big, and natural

There was a time when shoppers balked at store brands, opting instead for the popular brand-name product over the imitation version. Those days seem to be over. Private labels are rising in popularity, following something that could be called the “Trader Joe’s effect.”

Trader Joe’s has made its reputation selling private-label products and promising high-quality goods at an affordable price. And millennials love it.

Now, a lot of grocery stores are following suit. Beyond the store-brand Cheerios or Campbell’s soup, food market chains like Aldi are investing in full lines of natural, healthy food. Aldi’s new vegan line, Earth Grown, joins an already extensive list of in-store private labels.

Albertsons has also doubled down on its label, O Organics, resulting in a 50% growth increase and a recent milestone of $1 billion in sales. Similarly, Kroger’s Simple Truth line, which touts natural and organic products, reached $2 billion in annual sales last year.

These private labels are no longer simply side by side with brand names. They’re outshining them. Click To Tweet

Customized local offerings, cross-industry partnerships, private-label food and beverages – maximizing the sales potential of all these trends requires unique displays and signage. That’s where Medallion Retail comes in. We can help grocery stores effectively market their private labels and partnership kiosks – delivering innovative strategies powered by data. Reach out to our team today at engage@medallionretail.com.

Interested in more food and beverage trends? We’re excited to once again attend the Summer Fancy Food Show in New York June 30 – July 2. Stay tuned for our post-conference trends wrap-up report. And if you’re going to be there too, let us know. We’d love to meet up over cold brewed coffee, an organic smoothie or another hot beverage trend we discover!  Email Chris Gordon or Michael Decker at engage@medallionretail.com, call 212-929-9130, or check out our portfolio at medallionretail.com.

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