What’s next in grocery’s pandemic-fueled digital transformation
As the retail world moves on from Black Friday Cyber Monday, all focus is now on 2021 planning. With such an unexpected turn to 2020, it is still a bit of a toss-up what next year will hold. However, when it comes to the grocery and supermarket industry, the experts have a few ideas of where things are headed coming out of the impacts of COVID-19. These are the top grocery trend predictions for 2021.
Grocery Trend Predictions for 2021
Online Grocery Shopping
If anything, the pandemic has helped accelerate transformation in the grocery market that has been a long time coming, with online grocery shopping being the obvious example. While many major grocery and supermarket retailers already offered online shopping, curbside pickup and delivery options, much of the consumer market remained slow to adopt.
Even some retailers had hesitations to offer online shopping options. After all, it requires a heavy investment upfront, as well as places an extra burden on space and labor resources to execute.
However, we all know how that changed once COVID hit. Very quickly, lagging consumers were pushed over their barriers to adoption of online grocery shopping, many of whom will choose to stay now that they’ve given it a try. Before the pandemic, online grocery accounted for about 1-2% of sales. But after, retailers were seeing double and triple the numbers. At its peak, some grocery retailers saw 5x or 6x growth of online sales.
As these numbers have largely leveled out over the last several months, grocery retailers now have the opportunity to evaluate their current systems and processes, as well as make improvements and prepare for more growth.
Emphasis on Pricing
Pricing remains a top consideration for consumers, and this won’t change as we roll into 2021. Trends show grocery consumers are less likely to pay premium prices, especially on commodity items. In order to win over price aware consumers, grocery retailers have to strengthen their price perception and closely monitor their competitive positioning.
This means leveraging customer data to run more effective promotions, create profitable markdown plans and be competitive with prices on the items that matter most to consumers (all of which is what Revionics was created to do for retailers).
Ongoing Supply Chain Concerns
A recent survey conducted by Advantage Solutions found that 90% of their grocery retail partners anticipate out-of-stock issues to continue into 2021. However, the same survey shows that only 40% of manufacturers believe the same. While the global supply chain adjusts to the post-pandemic changes in consumer demand, manufacturers will have to rebuild trust with their retailer partners.
There’s no going back now. The retail world is going to continue to change, faster and more noticeably than ever, as technology capabilities keep growing and evolving. Gary Hawkins, Founder and CEO of the Center for Advancing Retail Technology predicts both an increase in automation and more integration of the digital and physical worlds are in store for the future.
With AI and ML, grocery retailers have the ability to automate more of their business processes and decision making. At Revionics, for example, our AI retail pricing solutions provide clear pricing recommendations and accurate demand predictions across pricing, promotions and markdowns based off of current competitive and market data. AI empowers retailers to drive more efficient and effective decision making with granular insights.
Meanwhile, digital experiences in the store, like AR, digital signage and voice commands, will become more widespread, meaning retailers will have to rethink how they are using their physical locations. Grocery retailers that invest in building out their digital networks now will have the advantage down the line.
The Future of Grocery
With the threat of rising cases but the hope of a vaccine close by, the grocery market in the months to come will be anything but normal. However, these grocery trend predictions for 2021 and beyond forecast a bright future for those retailers that are willing to evolve and invest in new technologies and the customer shopping experience going forward.