“It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness…” Charles Dickens wasn’t talking about grocery retail in the digital age when he wrote the opening line of A Tale of Two Cities, but he could have been.
What do the experts have to say about the digitization of grocery? I caught up with John McCoy, Digital Industry Advisor and Stephanie Waters, Retail Industry Principal at SAP Hybris.
Behind the trend, then a game of catch-up
Organizations are scrambling to survive because they didn’t adapt to, or accept, e-commerce as a trend sooner. John noted that over the last few years, there’s been an interdepartmental battle of sorts within companies between e-commerce and the rest of the divisions, as they fought the concept that the digital consumer was just as important as the in-store consumer, and would continue to be increasingly important in the future.
In a frenzy to catch up, many brands are quickly trying to add services like online shopping, in-store-pick-up, and home delivery; some by partnering with third-party apps simply to say they offer the service. The catch is, “They aren’t really thinking about the consumer’s best interest; they aren’t creating high-value moments with customers, and when they don’t do that, they aren’t any closer to their customer than they were beforehand.”
Saying it again for the folks in the back: If you’re adding services, but not focusing on experiences, you stand to lose, instead of gain or retain, customers.
Stephanie and John are retail experts, but first and foremost they are consumers.
As they compared their true stories of experiences with two different retailers, nobody would have predicted the ending.
High-end supermarket vs. everyday low price retailer: A plot twist
In a matter of a single online journey, Stephanie went from a loyal consumer to a lost customer.
A lifelong, enthusiastic customer of a high-end supermarket, Stephanie was ecstatic when they finally began offering home delivery in her neighborhood. She went online expecting an outstanding customer experience, and to say that the retailer underperformed would be a kind summary.
A fervent believer that a certain low-price retailer was one that he would never use, John spent most of his life rabidly opposed to them until he and his wife began to research grocery options in their city. Reluctantly, he gave them a try. Today their family spends over 90% of their food budget with that retailer.
The differences between their experiences couldn’t have been more stark, and it all came down to a key point: One retailer offered “check the box” services, but a poor customer experience, while the other looked at the customer with a 360 degree lens, and used data to engage and delight.
A revolutionary change: Retail is swept up in the tide
So what did these grocery retailers get so right and so wrong?
Here’s a juxtaposition of their experiences:
Stephanie: When she went online to place her first order with her supermarket’s delivery partner, she started to look for her favorite items, which required having to scroll through hundreds of products listed in random order to find what she needed.
Then, as she began to fill her cart, she realized that the prices were significantly higher (15-30%) than in-store. On top of that, she discovered that while they offered free delivery on her first order, there was a service charge, and she’d still have to tip the driver.
She would have abandoned the order at this point, but decided to continue with the process for research purposes. She was further stunned to see them ask her to sign up for a $149 subscription for a year of “free delivery” after she completed her order.
“I won’t be using that service again,’ said Stephanie, “Fortunately, more and more online grocery options are being offered in my area. I’m confident I can find one that offers a great user experience at a reasonable price point.”
John: As John began to interact with the retailer, his surprises were of the pleasant and radical kind.
Beyond now spending 90% of their grocery budget with a brand that he’d never spent a dime with, he said that the experience has, “literally changed our lives and given us back more time-probably about four hours per week.”
He noted that if the retailer is out of a product, they always substitute up, never down, and the employee that greets him when he stops to pick up his grocery offers samples of products that he and his family might like based on their grocery lists. Free samples. Which they in turn purchase in the future. He even noted that when that employee is off for the day, they are sad not to see his face.
Imagine not just gaining a customer, but gaining a loyal customer who touts the praises of your brand to all of their neighbors, who in turn begin using the brand.
Imagine losing a customer, not just any customer, but a lifelong and loyal customer, who expresses her genuine sorrow and frustrations when talking about your brand.
That’s the new reality of shopping in the digital age. The key difference is that one brand retained their customer data and used it to provide outstanding experiences for their customers every single time that they engaged with them, while the other served up a lackluster, far more expensive option without ever following up or realizing that their customer was gone.
That’s the world we live in now.