The supermarket business is pretty tough. Margins are slim, and the market has to bear with severe price competition, which we can see in the success of discount stores like Lidl and Aldi. At the same time, we see a rise in online shopping, including online groceries. In the Netherlands, Picnic is growing in market share, with an online-only shop and an efficient delivery strategy. It seems like competition is mostly based on price and convenience. If that’s the case, then we should expect to exclusively have cheap and online supermarkets within a matter of years.
We don’t know yet which direction the market for groceries is going to take. Perhaps supermarkets will change, and become more customer centered, instead of product oriented. We clearly see the ‘long tail’ phenomenon occuring in the market for groceries, like many other products. When offered a larger variety of products, people’s preferences tend to vary a lot. This can create possibilities for exploiting niche markets, since online shopping creates the possibility for a greater diversity of products.
My expectation is that supermarkets will have to deliver a unique customer experience in order to be competitive in the market. in the long run, offering or delivering certain products within a time span won’t give a competitive advantage. It will be a minimum standard. This means that being a supermarket will be more than selling your products. (Online) supermarkets have to become personalized, so that customers will experience doing groceries as a positive, engaging activity. This can be achieved by using datamining and data-analysis. Hence I think that supermarkets will have to become omnichannels, with a lot of knowledge about their customer.
next to the personal customer experience, I think supermarkets will have to create (or participate in) an ecosystem, creating a variety of channels and ways in which value can be offered to customers. Therefore, becoming an omnichannel might not even be enough. My expectations is that in the future most supermarkets will operate as ecosystem drivers.
Customers will not blindly switch to online groceries, but will look for the best customer experience. This experience can be offered when knowledge about the customer and the ecosystem are integrated and fully utilized.
references:
https://www.supermarketnews.com/online-retail/future-grocery-shopping-click-or-mortar
https://www.mckinsey.com/industries/retail/our-insights/the-future-of-grocery-in-store-and-online
Good point Jasper! I fully agree that the supermarkets will have to do something extra the upcoming decades. Especially since so many new chains (like Picnic) are popping up. I have never really thought about supermarkets using big data, but this is a pretty interesting matter!