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Five things we have learned from talking to more than 1 billion people

From Our Blog

How grocery can convert infrequent customers into brand loyalists

It’s no secret that consumer habits have changed, especially when it comes to food and beverage purchases. With revamped offerings at convenience stores (c-stores), the widespread popularity of online meal kits, and (of course) Amazon, the battle for customers’ “share of stomach” is being fought across a multitude of industries.

And the grocery industry may be feeling the most pressure. A once fairly traditional business model is being forced to evolve in order to keep up with today’s convenience-driven world. SMG’s recent study tackled this shifting trend head-on by drawing on feedback from our market intelligence tool BrandGeek®—the fastest, most accurate source of behavioral data linked to customer feedback in real time.

By examining food spend and dining habits of more than 20,000 consumers across a variety of industries, we answered 3 key questions to help grocery retailers convert customers into brand loyalists:

  1. Where does grocery currently stand?

    More industries are competing for customers’ “share of stomach” than ever before. Consumers are making food and beverage purchases at mass merchandisers and c-stores—thanks to fresher, healthier options and their one-stop-shop convenience factor. In fact, visit share at c-stores for fresh-and-prepared purchases is trending up while remaining relatively flat for other industries.

    More than that, c-stores are delivering the most satisfying experience and outpacing the grocery industry by 13 ppts in Overall Satisfaction.

    C-store_vs_Grocery_OSAT_Blog-1

    Given the customer’s quest for convenience, it’s no big surprise that the quick service restaurant (QSR) industry is currently dominating the market, with 45% of the visit share. Grocery is second, but trailing by 26 ppts.

    QSR_dominating_visit_share_Blog-2

    In order to move the needle and capture more visit share from these competing industries, grocery brands need to find ways to appeal to more customers and get them in the door.

  2. What do customers want?

    As previously mentioned, most food and beverage customers are highly motivated by convenience factors when making purchase decisions. Location Convenience is the top trip motivator for customers, which isn’t really something you can take to your front line. But delivering a Positive Experience and improving Speed of Service are factors employees can impact—and they’re the biggest opportunities to earn share.

    Grocery_biggest_opps_Blog-3

    Empower your staff to make a difference on these key measures. Our research shows that engaged employees create better customer experiences. When your whole team is committed to delivering speedy service and great experiences, customers will be more inclined to give your brand their business.

  3. Who are grocery’s biggest opportunity customers?

Consumers spend a lot of money on food—and 26% have a food budget of more than $250 per week. But that spend is being spread out across all industries—in fact, this high-spend group allocates the least amount of their budget to grocery, with nearly 40% spending less than half of their weekly food budget at grocery stores.

High_spenders_allocate_less_to_grocery_Blog-4

This group is also particularly motivated by speed. By focusing on giving high spenders what they want—a fast experience—grocery retailers can entice high spenders to visit more often and devote more of their food budget to their brand.


Deliver on speed + convenience to win brand loyalty

Customers have more options than ever for fresh, fast food. In order to remain a serious contender in capturing “share of stomach,” the grocery industry must be willing to adapt to customers’ evolving needs. This means providing a swift, seamless experience—one that leaves a lasting impression and keeps them coming back.

In an upcoming blog, we’ll dig into the second part of our research: how grocery can increase and improve its fresh-and-prepared food offerings as a way to increase share. Until then, check out the report: How grocery can earn “share of stomach” with fresh-and-prepared food


Zach Brown | VP, Customer Engagement
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