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Getting a handle on consumers at GIC

At Grocery Innovations Canada last week there was lots of talk about changing consumers

Changing consumer behaviours and expectations were featured in a number of sessions at the Canadian Federation of Independent Grocers’ GIC Live @ Home virtual event last week. Here are some highlights:

Two polarized consumer groups emerging

Although it’s been a challenging year in so many ways, the good news for grocery is that sales growth has been record-breaking: “Despite growing consumer concerns, our industry is an essential service, and has reported record year-to-date growth of over 12%—which, if you go back over the last five years, you can see that it's up four to six times higher than what we've seen over the past five years,” said Carman Allison, vice-president, consumer intelligence at Nielsen, in his talk called The Two Sides of Each Dollar You Sell: Predicting the COVID-19 Behavioural Reset.

But “despite this impressive growth for the industry, the impact of COVID-19 isn't, and will not be, equal moving forward. In order to be successful, you need to appeal to consumers that are becoming more and more polarized,” said Allison. He noted there are two groups emerging: the “constrained consumers,” who have been negatively affected by the pandemic financially and make up about 25% of Canadian households; and the “insulated spenders” who haven’t been affected negatively and still have money to spend, who make up about 75% of Canadian households. “In order to grow, we need to make sure we meet the needs of both of these consumer groups,” he said.

Changing expectations and workplaces

E-commerce is not going away; in fact, e-comm food sales are expected to triple this year, compared to last year, said Sylvain Charlebois, senior director, Agri-Food Analytics Lab at Dalhousie University in his keynote presentation, COVID-19 Happened. Now What? Infrastructure will be needed to meet demand, he said, as consumers' expectations are changing and they're not willing to accept their groceries to be delivered within days, "they're expecting a delivery in two hours, really, no matter where you are in the country." He added that we can expect to see retailers convert more locations to "pick stores" to support e-commerce.

And the shift to working from home, while not a "threat," is one of the industry's "biggest challenges," Charlebois said. A recent Dalhousie survey found 23% of employers in Canada are considering allowing their employees to work from home on a full-time basis post pandemic. The move could affect hundreds of thousands of workers "and if you think of a marketplace where your address doesn't matter anymore, it really changes the dynamics," said Charlebois. He noted there has been a lot of investment from grocers in urban centres with stores catering to the grab-and-go crowd, but if people aren't going downtown to work, these locations will face challenges. On the other hand, grocers in the suburbs and in smaller communities stand to benefit from the shift to working from home.

Innovation through observation

And to get a better handle on consumer behaviour, Shawn Kanungo, a disruption strategist and partner at Queen & Rook, touted “ethnographic research” in his keynote talk and said it should be a key strategy in grocery innovation. What does this mean? It’s about studying the consumer’s everyday behaviour in their everyday surroundings, not just their shopping behaviour in the store, he explained. “Any time I start an innovation project, what I do with my team is just follow customers around—not only follow them around in the store or at work, but on the way home and what they're talking about at home, really getting a full picture of what our customer is doing; because … sometimes customers might tell us what they want, but by really observing them, we'll be able to unlock even more insights.”

Ideally, people at all levels of the organization would be given training in ethnographic research, he said. “The best folks that can unlock those insights are the folks on the ground floor,” he explained. “So by giving everybody some ethnographic research training and being able to get those ideas to come and bubble up throughout the organization, I can't tell you how many amazing innovations you're going to be able to find.”



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