Damn if I know is my answer!
From ShopAbility Director Peter Huskins.
Peter Huskins
We now have Victoria, who is in another extreme situation after the COVID resurgence in Melbourne. If this happens in other countries, the second wave of COVID will have a dramatic and lasting impact not only on short-term buyer behavior, but also on long-term customer confidence.
The experts are already predicting that this second wave will be the killer for many more cafes and restaurants on the other side of the foodservice channel when shoppers bunker downstairs and cook from home again.
Every retailer in the grocery store should rub their common hands together. You've got the perfect growth storm from bigger baskets of higher spend, with more buyers shopping. Frequency can be challenging as shoppers visit less frequently for security reasons, but it should be offset by the large basket sizes and expense rates. Kind.
The mix of values buyers are looking for now includes price-driven support due to (in) employment and household income issues, but offers enough stocks in all the categories and segments they want to buy from, including an increasing mix of fresh and fresh produce are frozen Requirement.
I wonder if we learned from the big toilet paper debacle of 2020 – but I digress.
Hence, a key to growth is trying to keep the value / price equation at the top of the message and activation. As unemployment rises (and has not yet peaked), more and more people are keeping an eye on their grocery bills and may switch to cheaper items like private label products, more promotional items in their basket mix, and / or move to harsh discounters like ALDI. A growing number of buyers choose a store because it has the lowest prices or best deals, and we can expect that percentage to grow as the economy continues to deteriorate.
As our local economy continues to contract, the financial burden will create certain behaviors from buyers. Not only will they be more frugal on their spending, but they will also make greater use of their local fresh grocery retailers, including a revitalization of the local butcher and fruit and vegetable stores, as they expand their "shop local" approach to personal safety. As a result, value is becoming an increasingly important factor when choosing stores and products.
With shoppers of all ages continuing their food adventures from the comfort of their own homes rather than taking the risk of potential exposure from convenience restaurants in their local club, pub or restaurant, smart retailers need to focus on solutions, not products.
Coles does an amazing job of bringing new solutions to adventurous chefs with their new weekly catalog content and layout, and seems to be trying to keep the Fresh Food People fresh. An interesting side game develops that should be watched.
With the increase in meals prepared and consumed at home, and possibly a certain exhaustion of the repertoire, you are finding ways to offer simpler eating solutions that provide relief for those who want to spend less time cooking but still enjoy tasty and healthy meals at home. The same approach can be extended to other solutions in the business – think health, household cleaning, and personal care solutions, and don't just market individual products.
And discretionary spending will continue to fall as buyers cut back on spending to stretch their dollars. And travel, well, I think the answer to that is pretty obvious and Alan Joyce's prediction might have been spot on.
Shopping malls were back to 80 to 90 percent of pre-COVID levels, but personal safety concerns will once again put pressure on malls' frequency of visits and spending rates, and this is where buying groceries for personal consumption comes into play You play a major role in providing the supermarket anchors with a steady stream of cautious shoppers.
Challenge: Look at my behavior and that of my friends and family and really think about how we and they are behaving now in the face of a possible second round of COVID. Your network will most likely not be too far removed from what the majority of buyers will be doing. Look, learn, and change the direction of your compass accordingly.
About Peter Huskins
Peter Huskins is a career retailer well known and recognized in the Australian FMCG industry. With extensive experience in department stores, DDS, spirits and supermarkets, he has worked with suppliers and retailers for more than 10 years to develop business, category, customer and channel strategies and competitive differentiation.
Call Peter on 0412 574 793 or send an email (Email protected).
