Most experts agree that customer loyalty in the grocery sector is virtually dead. Ten years ago, it was somewhat unusual for a consumer to drive past the closest grocery store to shop at a competing store. Today, within a few mile radius, eight supercenters and chains can be fighting it out, in a market, which the experts might say can only support three or four. So while the chains struggle to find their niche and battle on price, the price conscious shopper benefits.
It's a critical juncture for the grocers. Food price inflation has softened and, along with flat demand, has caused profit margins to decrease in the supermarket channel. Many industry observers believe that the supermarket industry has failed to believe that the so-called "time-crunched" shopper will, in fact, travel to a number of stores to find the deals and products they are looking for. And no matter what the gas price is, they will do so even if it means extending the overall duration of their shopping trip. Today, the fragmentation of the grocery-shopping trip is an undeniable trend in the industry. So, today's grocery shopper is prepared to use their feet and cars to save money, but more than ever, they are using their fingers, their laptops and even their handhelds to save significant dollars, every week.
In general, today's consumer has turned into the "pre-shopper extraordinaire." Whether it's clothing, electronics, automotive or computer, the consumer will do her homework first, on-line. Comparison-shopping sites rule the Internet allowing shoppers to learn more about the products they wish to purchase and then find the best price. With the growth of e-commerce, price comparison has become the dominant theme for on-line shoppers. So the comparison-shopping world has become the focus of a new breed of buyer, the "prosumer," the proactive consumer.
Now it's time to welcome the grocery "prosumer" to the electronic age. For eons, the sharp grocery shopper has saved by comparing prices in the weekly flyers/circulars that arrive on your doorstep, via your daily newspapers. Flyer production is a multi-billion dollar business and research indicates that an amazing 67% (Newspaper Association of America) of female heads of households use the flyers to plan their shopping trips. Similarly, manufacturers across the United States offered $375 billion, that's right billion, in paper coupons last year, everything from peanut butter to laundry detergent.
Until recently, the planning component required effort to manually sift through the weekly circulars to identify the best deals and to prepare the shopping list. But things are changing and changing fast. Free on-line services are now available where weekly advertised deals are right at the consumers' fingertips with the shopping list only a few keystrokes away.
Consumers can select the stores they shop at, make a list of the products they want and then search for the best deals or they can simply skim the flyers by store, similar to the way they used to look at the paper flyers. They can also search by brand or category. The output is a shopping list that breaks down the purchases they wish to make by store and shows the savings at each store, as well as the overall savings.
So for grocery savings in the electronic age, it can be as easy as "click, pick and save."
Paul Davis, CEO, mygrocerydeals.com, and has implemented customer satisfaction measurement programs for leading U.S. grocery retailers over the last 15 years.
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