Keeping a Core Focus on Online Groceries | Q&A with Naturally Good

Power Retail By Power Retail | 10 May 2021

In the months following the peak of the pandemic, online groceries have skyrocketed in popularity. We sat down with Lynn Ormiston, Commercial and Digital Innovation Manager at Naturally Good, to discuss the increase in online food sales and why retailers should pay attention to consumer changes.

The online grocery market has grown exponentially following the pandemic. While the online grocery industry has been present for some time, it has accelerated markedly in the last 12 months. How do you expect this trend to shape the way grocery retailers approach online in the future?

This recent growth we have seen online is an escalating viable channel for grocery retail. Anastasia Lloyd-Wallis, from Retail Doctor – who will discuss Understanding Your Customers On An Emotional Level For Retail Success – says consumers are now educated in online shopping particularly older and mature customers who pre-COVID would not have shopped online. We know that 45 percent of all grocery purchases are habitual and we know that after 90 days of habitual behaviour that consumers lock that behaviour. Retailers need to take this into account.

The pandemic has accelerated a lot of things, and aside from e-commerce, there has been a further push for natural and organic foods. How should retailers react to this healthy food boom?
Smart retailers should add these organic products to online store selections ensuring that there is an educational element and high transparency when making the claim to impress discerning shoppers. Adriana Heinzen from global market research group Mintel – who will be speaking about future and current health trends – says the next 12 months will be dominated by immunity-boosting foods that focus on gut health. In particular, consumers will be seeking out innovative products when it comes to fibre, fermented foods, pre-, pro- and postbiotics, so it would be wise for retailers to explore these products more.

In a time where health is a priority for consumers, why is it important for online retailers to take notice of the changes in consumer habits surrounding food and groceries?

Retailers and brands should be constantly listening to their consumers. Strategy without consumer insights is making decisions without factual backing. Retailers should be in the habit of understanding the details of their consumer’s life including changes in motivations and trends. This is constantly occurring – not just during the pandemic. 

A trend that retailers have projected for some time is the importance of transparency. Have there been any technological developments in the food and grocery sector that help elevate this transparency between retailer and consumer? 

Consumers are on the rise and with so much information available at the touch of a Google search, there are very few places for brands to hide. Technology such as label scanning apps for nutritional and health information such as FoodSwitch, ThinkDirty and WiseList are becoming more popular with consumers to access information. 

Why should retailers aim to drive transparency with their consumers about the health and quality of the food products they sell? 
A recent Retail Doctor Group study saw that 81 percent of consumers consider transparency on products and how they are manufactured as important. As transparency of the process and the contents of products is becoming more readily available, consumers are selecting brands based on the information available and actively choosing certain brands over others who do not have this information readily available. Over 80 percent of products are researched online prior to purchase so consumers are in the habit of research the products they purchase and expect this information to be accessible. To ensure the needs of all consumers are met, grocery retailers will need to adapt their delivery format for this new, educated customer including smaller format stores, click and collect and online predictive technology.

The Next Gen shopper is famously conscious about the loyalty they give a certain brand or retailer. In fact, 23 percent of Gen Z shoppers are willing to boycott a brand if it doesn’t align with their views or actions. How might this change in consumer loyalty impact retailers, especially in the food and groceries sector? 

According to Clare Winterbourn, Founder of Born Bred, Australia’s first TikTok agency – who will unpack the topic of How to Successfully Market To Savvy Gen Z at the expo – not only are Next Gen shoppers famously conscious about their loyalty to a brand, they are also famously vocal about calling out brands that don’t align with ethical production or health claims that don’t stack up. Boycotts on certain foods are no longer confined to the kitchen and immediate family, they’re being called out on social media, shared, re-shared and in some cases picked up by mainstream media. Retailers need to be aware of what products they’re stocking, how they’re being marketed and the potential reputational risks to the brand this may pose.  

Why should retailers pay attention to the changes in the behaviour presented by Gen Z? 

Consumer research shows that word of mouth is becoming more and more important for consumers, specifically Gen Z who are more influenced by social media and the opinions of their peers. Gen Z consumers are becoming more vocal about their loyalty to specific brands and retailers and using their social channels to promote the products they enjoy.

Supermarkets are continuing to invest in online shopping as a prominent channel. What online retail trends have you seen that are expected to be adopted by the big supermarkets this year? 

Anastasia Lloyd-Wallis said the use of AI is a big area that we would expect to see supermarkets invest further into, in particular for the supply channel. This links back to consumer behaviour, to discover a much greater understanding of consumers and predicting their behaviour. A focus on analytics and digital will also give grocery retailers the ability to trace and track consumer movements/habits. We also expect to see a greater use of virtual screens in supermarkets for consumer purchase history, product transparency and stock availability, and the use of data to integrate the physical and online experience.

Are there any trends that you don’t expect to take off? Why/why not?

We have seen an entry to un-manned retail stores such as Amazon Go and Bingobox, however, given the different needs of consumer segments, we may not see the roll-out of this as much as expected. We may possibly see a blended solution in retail rather than total staff-less and cashier-less stores with no human interaction. 

What is one piece of advice you’d offer online retailers that want to take advantage of the changes in consumer behaviour?

It’s important to understand who your target consumer is. You don’t need to be all things to all people. Focus on your target segment, both on a demographic level and a personality level. Understand their emotions, what drives them and ‘why’ they want to interact with you. Whilst there are many broad consumer trends, your consumer may not follow all of these trends so focussing on what they want from you will create a deep and emotional loyalty.

Anastasia Lloyd-Wallis, Adriana Heinzen and Clare Winterbourn will all be speaking at this year’s  2021 Naturally Good Expo, taking place from 30-31 May at Sydney’s International Convention Centre.

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