How consumer interest in healthy food is prompting an evolution in grocery retail

As consumer interest in leading healthy lifestyles rises, every aspect of the food and beverage purchasing lifecycle is evolving, and those changes can be seen every day at grocery stores nationwide. Retailers are shifting product mixes and establishing new purchasing channels so shoppers who want to buy better-for-you items have more ways to access them.

“The customer drives our product selection process,” said Rodney McMullen, CEO of The Kroger Co., during a presentation at the recent GMA Leadership Forum. We make all our merchandising decisions based on what connects with our customers.”

Grocers are not only swapping out underperforming products with more in-demand healthy items, they are even redesigning their stores to highlight things like fresh foods and ready-to-eat meals. To market these items, retailers are personalizing offers and reaching out in both traditional and digital ways to capture shoppers’ interest.

Adapting technology both in stores and out

New technology is making its way into stores every day, and grocers are investing in additional processes to offer digital experiences to shoppers, even when they’re shopping in brick-and-mortar stores.

“The world is changing, and it’s changing incredibly fast,” said Steve Bratspies, chief merchandising officer with Walmart US. “Technology is changing, consumers are changing – they’re much more open to looking at new things…and the technology that’s available has a greater degree of transparency than there’s ever been and they’re making different choices.”

Grocers are catering to those new choices by bringing the grocery experience across a variety of channels. Online grocery sales today account for about 5% of the $700 billion grocery market, said Abigail Slark, senior manager with Deloitte Consulting. But Deloitte’s research suggests that half of all grocery purchases are influenced by digital, and those purchases tend to be greater in terms of basket size. “Consumers are shopping long before they enter the store -- digital is, in fact, a complement – not a substitute – for in-store shopping,” Slark said.

How will this look in the future?

Considering that technology and digitization are becoming an immersive part of the grocery experience today, the odds are very high that those features will become even more prominent in the future.

Kroger’s recent partnerships with Home Chef, Ocado, Alibaba and driverless delivery service Nuro are a few examples of how the chain is staying on top of consumer trends to deliver what shoppers are seeking. “So what does this mean about where we’re headed?” McMullen said. “Fresher food, faster delivery to more customers…Kroger is always willing to disrupt ourselves to remain America’s grocer.”

Although those investments may prompt shoppers to wonder whether the grocer is moving toward a digital-only future, the reality is that retailers must have both capabilities to remain forward-thinking. “We firmly believe that the future will include both online and digital stores,” McMullen said.

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