It’s no secret that food-to-go is growing - up £2.5bn in the past three years (The NPD Group, 2018). This month’s F&B Hotlist explores how food retailers are evolving this market through purchase touchpoints, product innovation, and creating an experience around prepared food.
Nearly 70 per cent of customers feel that the pressures of modern life have increased over the past five years (Waitrose, 2018) and consumption habits are changing as a result. The challenge for supermarkets is balancing customers’ ever-demanding lifestyles with a growing desire for new food experiences. In many scenarios, convenience is still key.
Purchase – Reducing points of friction
At the end of 2016 Amazon revealed its Amazon Go concept to the world, setting off a revolution in supermarket automation. Three years later, China has taken the lead with Alibaba’s HEMA store roll-out and competitor JD.com’s 7Fresh concept.
These international influences have not bypassed the UK, as the convenience market here is set to grow 7.7 per cent to £47.1bn by 2022 (IGD, 2017). In response, many of the UK’s leading supermarkets are looking to reduce friction for customers seeking convenience. Sainsbury’s has removed the checkout tills from its Holborn store in London as part of a three-month trial to get customers using the SmartShop app. In line with this trial, the store’s range has been adapted to suit the needs of customers seeking food-for-now.
Another grocer experimenting with app-based payment is Spar UK, trialling a self-checkout app from Ubamarket in select Northern Irish stores. The app allows customers to build shopping lists, view navigation and scan as they go, not only streamlining the end payment but the shopping trip in its entirety. It’s not just convenience retailers looking to automation, after years of focusing on staff-manned checkouts, discounter Aldi is also jumping on the self-service bandwagon, trialling its first ever self-service checkouts in a store in Staffordshire.
Product – Optimised for now
With the rise in on-the-go eating culture, customers are increasingly shopping for food-for-now. Brands are adapting their offers, or even developing whole new products to cater to these changing needs, from ‘sushi burritos’ – portable alternatives to the traditional, chopstick-requiring sushi form – to the rise of the healthy ‘pot’, perfect for a fresh snack on the go.
Nearly half of customers don’t know what they’re having for dinner on any given night (NPD Group, 2018) and over 70 per cent of people say food is their #1 impulse purchase (Slickdeals, 2018). This behaviour gives supermarkets the opportunity to capitalise on customer spontaneity and tap into in-the-moment cravings. Convenience grocers must therefore avoid the pitfalls of smaller format locations, to ensure product selection is practical yet varied, ensuring the range is not just shrunk to fit in the space, but thoughtfully considered and curated.
Placemaking – Creating an experience around prepared food
It’s not just convenience formats that have a role to play in food-for-now, larger supermarkets are stepping up their prepared food game to win convenience seeking customers too. With 52 per cent of people believing prepared foods are healthier alternatives to fast food (Technomics, 2017) there has been a rise in ‘grocerants’. This hybrid combines traditional grocery shopping with dining in, creating an experience much like a fast-casual restaurant. Whole Foods Market is an original purveyor of this concept, and its latest flagship in Atlanta, and 500th global store, includes four fast-casual restaurants and a rooftop bar, as well as your standard grocery aisles of goods and fresh-counters.
Elevating the in-store dining experience, Canada’s T&T Supermarket features a seafood bar where customers can not only pick up prawns, clams and lobsters to take home, but can also have them freshly prepared to eat then and there. Akin to Alibaba’s HEMA concept, the bar has seen huge success, with a 60-minute wait for seating in the supermarket in its first week of opening.
As customers continue to seek food-for-now, retailers that look beyond the repetitive and boring solutions, whether using tech, new product innovations or brand partnerships, can optimise the experience for both convenience and taste.
Images courtesy of Household.