Introduction

The Coresight Research team is attending and participating in this year’s Groceryshop conference, held on September 19–22, 2022, in Las Vegas, US. The event brings together retail leaders and industry experts from around the world to explore the changing grocery landscape and address current challenges.

In this report, we present our top insights from day two of Groceryshop 2022 on September 20.

Groceryshop 2022 Day Two: Coresight Research Insights

Personalization Across the Retail Experience Is Key to Capturing Consumers

Retailers hammered home the importance of personalization across categories, retail formats, and more. Marissa Jarratt, EVP and Chief Marketing Officer at 7-Eleven, even called personalization “the buzzword of Groceryshop.”

Jarratt described how 7-Eleven is engaging new and existing consumers with more targeted marketing tactics. In order to bring personalization to all levels of the shopping experience, all parts of the business must be upgraded to better target consumers. 7-Eleven has identified paid digital media as an effective channel for customer growth. Jarratt recommended prioritizing video and brand partnerships to build cultural relevance.

Ron Bonacci, VP of Marketing & Advertising at Weis Markets, discussed how technology, specifically AI (artificial intelligence), can be harnessed to improve personalized shopping experiences. AI technology provides personalized recommendations and dynamic product adverts to consumers, supporting customer growth and lifetime value. Bonacci discussed how first-party data can be used with applied AI targeting for sales, items, trends, e-commerce, in-store shopping, geographic data and more. Better product targeting is crucial; Bonacci highlighted that 89% of Weis Markets’ customers who buy a product they like will purchase it again.

Sanjiv Karani, Head of Platform Products & Innovation at Kroger, oversees 35 product-centric teams, which utilize AI technology and data to create personalized shopping and a more seamless consumer experience. In a panel at Groceryshop, Karani focused on how data can be used to create a personalized in-store shopping experience, including identifying a personalized route for shoppers and providing real-time offers based on individual customer preferences.

 

Cristina Marinucci, Head of Global Shopper, Insights and Analytics at Mondelez International, explained that personalization will also be key for the next generation of consumers, stating that “personalization is table stakes, especially for younger generations.” Marinucci encouraged retailers to consider how mobile devices can be leveraged to find disruption points during the consumption journey to build the consumer’s basket at relevant moments, improving sales.

Seamless Omnichannel Experiences Are the Future of Retail

After the pandemic-led e-commerce boom, retailers have realized that identifying ways to integrate digital retail formats, such as augmented or virtual reality (AR/VR) or metaverse experiences, will improve the consumer experience. At Groceryshop, retailers shared ideas, successes and failures around providing interconnectivity between online and offline shopping experiences.

In a session titled “Catering to the New Grocery Consumer,” Deepak Jose, Global Head of ODDA Data & Analytics Solutions at Mars Wrigley, explored how the company is winning over customers in an omnichannel world. Exploring omnichannel solutions has enabled Mars Wrigley to break down organizational silos and improve business decision-making across multiple business units. Jose highlighted the importance of responsibility in formulating and collecting data insights, including through sticking to an AI code of conduct, protecting consumer privacy and security, collecting data ethically, providing transparency and explainable AI products, and ensuring the technology is supporting a test-and-learn mindset. Jose estimates that the actioning of data insights collected through AI will triple the company’s omnichannel revenue growth over the next three years.

 

Lydia Joo, Head of Digital Commerce, North America Home Care at Procter & Gamble, argued that successful integration of the in-store shopping experience and the online shopping experience eases product search and discovery for consumers. For example, the in-store shelf provides more familiarity to consumers and is, for many, a more natural way to discover new products and substitutes, while the digital shelf offers speed and convenience, features dynamic aisles, and has many points of entry.

 

Bernardine Wu, Executive Managing Director at digital transformation company OSF Digital, presented the company’s Grocery Omnichannel Retail Index 2022, a benchmarking study that examines how grocery retailers are meeting shopper expectations. Wu walked through how retailers are performing in terms of content and digital tools and personalization features that support the omnichannel experience. Retailers’ greatest strength in terms of engaging content and digital tools is editorial content, while their weakest point is the ability to use that content to add products to customer carts, according to the study.

In terms of personalizing the shopping experience, the index showed that 76% of retailers have added recommended products to the product detail page, while only 42% allow users to manage their preferences, revealing how much room there is for retailers to grow in these categories to improve product search and discovery.

 

Retailers must be mindful that the device consumers use for e-commerce is also influential in shaping the experience. Alicia LeBeouf, Head of Industry – Retail, Marketplaces & Grocery at Meta, suggested that mobile has completely changed shopping, with two in three grocery shoppers citing mobile as their number-one influencer while shopping. This presents an opportunity for retailers, LeBeouf argued, as mobile shopping can help create the interconnectivity required for a successful omnichannel experience.

LeBeouf also pointed out that not all products are profitable in the same way online and offline, and therefore there should be varied offerings across channels. She concluded that this evolution will be accelerated when more consumers begin shopping in the metaverse, which will more effectively combine online and offline shopping through a greater focus on AR/VR in stores.

Continuous Innovation and Experimentation for Growth

Retailers explored many strategies for innovation and experimentation that have enabled them to achieve growth despite the current economic challenges. Innovations in technology, marketing and product testing aim to bring new and exciting experiences to consumers.

Tony Xu, CEO at food-delivery company DoorDash, explored how the company is continuing to innovate and experiment to deliver growth. As consumers returned to more in-person shopping following the lifting of lockdowns, it was unclear how DoorDash would sustain growth. However, the number of customers purchasing groceries on DoorDash has doubled from a year ago, according to the company. Xu attributed this performance to the resilience of the food category, as well as DoorDash’s ambition to continue to add new retailers to the platform, including EG America, Giant Eagle, Raley’s and Sprouts Farmers Market. Additionally, DoorDash’s order density, with approximately 25 million monthly orders, has delivered high reliability and enabled lower costs. The company is continuing to explore and test new partnerships to “jointly build a product that works for everybody,” to enable continued growth at scale, Xu explained.

 

Darren Rebelez, President and CEO of convenience store chain Casey’s, explored how the company is harnessing digital innovation to achieve growth. Casey’s has approximately 2,400 locations in 16 Midwestern states, and many in rural areas with populations of fewer than 5,000 people. Just a few years ago, Casey’s lagged behind its competitors on digital innovation and was searching for ways to leverage digitalization to engage consumers. Since then, it has reinvented its guest experience with a new mobile and rewards system, according to Rebelez. The company’s loyalty program, which currently has 5.5 million members, allows shoppers to “take points and convert to cash for classrooms” through Casey’s Cash for Classrooms initiative, which enables members to donate their points to a school of their choice. In the future, Casey’s believes that new technological innovations will enable it to sustain growth by identifying inefficiencies and removing friction.

Offering limited-time deals and new products every week is one of the most effective ways to entice consumers, according to Val Oswalt, EVP and President at Campbell Snacks. She stated that 69% of the company’s consumers want to try something “new and trendy.” One of their most successful product campaigns was its Goldfish crackers back-to-school campaign on short-video platform TikTok, which achieved 10 billion views in three days, a success that Oswalt attributed to identifying and achieving cultural relevance with the audience on TikTok.

However, supply chain challenges and other pandemic-related issues present difficulties for Campbell Snacks’ innovative and speedy strategy. Nevertheless, Oswalt stated that the company continues to learn and adapt by staying agile and creating cross-functional working teams for powerful brands.

 

L’Oréal has also leveraged social media to promote, and test, its products. Nathalie Gerschtein, President of the Consumer Products Division, North America at L’Oréal, emphasized that the discovery journey is never complete, and the company aims for new innovations to complement replenishment products, with about 30% of retail sales coming from new products and about 70% from replenishment products. Last year, Maybelline’s Sky High Mascara went viral on TikTok, a success that Gerschtein attributed to the fact that the content resonated with the target audience. (The mascara now sells 10 million units per year, which translates to about $100 million in sales per year, according to Gerschtein.) At the same time, a telescopic mascara went viral last year, although the product had been in the portfolio for years, underscoring how crucial both replenishment and discovery are—and it is notable that both achieved viral status due to user-generated content.

 

How Retailers Can Serve the Increasingly Health-Conscious Consumer

More customers are searching for healthy and clean alternatives, not only in food, but across many categories, including beauty and personal care. At Groceryshop, retailers discussed how they can serve health-conscious consumers by providing transparency, simplifying the shopping experience, and serving as a trusted expert and advisor to consumers.

Ben McKean, Founder and CEO of Hungryroot, an online personal grocer platform with grocery delivery and recipe features, spoke about how personalization can simplify the consumer’s search for healthy food products while also decreasing shopping time. Traditional online grocery shopping can involve browsing tens of thousands of SKUs (stock keeping units), which is confusing, particularly given the lack of transparency around products. Hungryroot therefore provides a simple survey to allow it to understand the customer’s objectives, dietary restrictions and preferences, after which their cart is filled automatically with healthy foods. This cuts the time spent shopping from hours to minutes, while also reducing food waste by ensuring customers only receive what they need.

Executives from Campbell Soup Company, The Honey Pot Company and Whole Foods Market discussed the use of digital tools to serve the more health-conscious consumer, highlighting the importance of gaining consumers’ trust, particularly when it comes to their health, as well as quality standards. Retailers that want to cater to the health-conscious consumer should present themselves as trusted advisors for consumers and lean into plant-based and special diets and supplements.

Campbell Soup Company aims to connect with people through food they love and feel positive about. Transparency in food products, including ingredients and how the products are made, she explained, is key to gaining consumer trust when it comes to their health.