Rethinking the front end

There was a time when the front end was the it spot in the grocery store: a prime place for impulse purchases and a good way to get consumers to increase their basket size. But with the rise of self-checkout and online shopping—not to mention a global pandemic that’s reducing the time people want to spend in-store—those once lucrative front-end margins are steadily declining.

“This change has been happening for a long time now, but the pandemic is just accelerating it,” says Anne Stephenson, a partner at Explorer Research in Mississauga, Ont. “We’re telling our clients it’s important to start testing different options now in terms of how to manage this fundamental change that’s already in progress.”

Indeed, research shows the consumer mindset around checkout is evolving. A recent study from Explorer revealed 48% of shoppers want to exit the checkout as quickly as possible and 40% don’t want to touch or pick up a product at the front end on their way out. Furthermore, Stephenson says 48% of impulse purchases are triggered before a shopper enters the checkout lane, so staff directing consumers to a particular checkout lane (a standard practice during the pandemic) is interrupting this trigger.

“We’re not giving up on the front end, but now that shoppers’ ability to browse and demonstrate old impulse behaviours has been eliminated, it’s about how to reinvent this area,” says Stephenson. That could mean adding impulse zones before shoppers even get to the checkout, or simplifying the process for them and focusing on best-selling SKUs. “The time pressures we’re facing means shoppers are that much more organized and driven going into the grocery store, so retailers have to figure out new strategies to regain sales and drive impulsivity.”

Finding the right front-end fit
Adam Tully, senior director of grocery at Calgary Co-op says now that social distancing is the norm,there is physically less space for items at the front end, and the need for “the right products at the right time” is essential to tailor to customers’ needs.

At his stores, that could mean masks and hand sanitizers at the height of a COVID-19 wave and Halloween treats in October. “In some of our centres, we’ve created lines that snake past confectionery and PPE items,” he says. “If the right things are up there that customers need, they will put it in their baskets.”

That many of us are turning to snacking now more than ever is another opportunity to drive purchases at the front end. “Canadians are increasingly turning to snacking for comfort and a sense of emotional well-being, and our research indicates that snacking has increased by as much as 60% in recent months,” says Julie Sirois, vice-president of sales at Mondelēz Canada. To this end, Mondelēz has been working closely with its customers on ways to convert shoppers at front of store. “Our focus is to attract new shoppers in the queue line, front-end cap areas and through self-checkout as we see evolving consumer behaviours,” she says. “Additionally, as self- checkouts become more prevalent, there are real opportunities to reimagine the queue as a key place for purchases.”

Changing the experience
In addition to a front-end product overhaul, retailers are making investments to enhance the checkout experience to address shoppers’ increasing need for speed and safety. According to the 2018 Consumers Cringe at Slow Checkout report from Forrester Consulting, which surveyed 1,000 U.S. grocery shoppers, short lines and a fast, accurate checkout experience are as important as location, price and assortment. In fact, the checkout experience was more important than customer service, ongoing sales or store layout.

Walmart is giving customers myriad options when it comes to checking out. Along with traditional and self-checkout, customers can do online and curbside pickup, as well as check out with a roaming employee who scans items on a mobile device. The retail giant is also experimenting with cashier-less stores with self-checkout kiosks.

“We’re seeing customers making fewer trips to our stores, but when they are shopping it with a larger basket,” says Lee Jeyes, innovation director, customer experience at Walmart Canada, noting that more checkout options make customers feel more comfortable. “It’s about making it as contactless as possible, while maintaining speed and service,” he says. “We’re prioritizing safety even above merchandising.”

Meanwhile, advances in artificial intelligence are promising to further revolutionize checkout by eliminating it entirely. Standard Cognition’s AI-powered autonomous checkout solution, already live in several U.S.-based convenience stores, is a prime example. Shoppers simply download an app, press the check-in button when they enter the store, grab what they want and walk out, without ever dealing with a cashier. A receipt comes by email and a shopper can refund any purchase within seven days if there are discrepancies.

“Autonomous checkout will definitely change the impulse purchase dynamic, because it eliminates those lines,” says Jordan Fisher, co-founder and CEO of Standard Cognition. In fact, his company is working closely with retailers and brands, such as Circle K and Mars Wrigley, to rethink store layouts and merchandising strategies to better understand the buying behaviour in a checkout-free world. “We’re exploring avenues such as in-store and in-app promotions. It’s still early, but we’re starting to collect data on what works best.”

Smart shopping carts like Amazon’s Dash Cart, which uses sensor technology to track purchases so consumers can avoid checkouts, are slowly catching on as well. “I definitely see chains experimenting with these kinds of technologies,” says Marty Weintraub, partner and national retail leader at Deloitte in Toronto. “And now that we can take advantage of shopper data, we can better personalize the offerings.”

He says grocers have to recognize that impulse shopping doesn’t have to happen “in the final mile of the store,” but can also be an indulgence that’s triggered throughout the aisles. “We’re going to see a lot more digitization where eventually I’ll be able to walk up to a shelf and it will point me to something of interest to me,” he says.

So where does online shopping fit in?
Analysts say grocers should be taking better advantage of the front-end component of online shopping too, especially now that the pandemic has pushed more people to shop at their virtual grocery stores. “Now can provide a contextual checkout experience that takes advantage of who you are, what your order is, where you live and your historical purchases,” says Peter Hughes, partner and national leader, customer, for KPMG in Canada. “The ability to leverage that to customize that last mile experience for shoppers is far greater than what an in-store experience ever could.”

In addition to curating the right kinds of impulse items at checkout, Hughes stresses the importance of the right language and ease of design to get shoppers clicking on impulse purchases online. He points to the airlines that have been doing this well for years, giving travellers the ability to book flights, pick seating and buy third-party offerings online.

“The grocery industry is a bit of a lagger but with so much customer intelligence already, there is so much potential,” says Hughes. “I really think that now is a tremendous opportunity for grocers to reinvent what the impulse buy is.”

This article appeared in Canadian Grocer‘s November 2020 issue.