SOME COMMENTATORS would have us believe that bricks and mortar grocery retail is facing a serious challenge. Apparently, the end is nigh for the high street, out of town retail park and strip malls, as we hurtle towards a digitized world dominated by e-commerce.
In simple terms, this just isn’t the case. Yes, there are some great innovations entering the sector – such as Amazon Pantry, offering two-hour delivery slots on store cupboard essentials. But the undeniable fact is that buyer behavior can’t always be anticipated and doesn’t always follow a pre-ordained blue print.
The online environment suits some shoppers, but it’s a channel that’s ideal for purchases of brands that consumers already know and trust. It can’t offer the experiential approach to discovering new products and mixing brands and own label products that shoppers enjoy in store. Nor is it always the most convenient way to shop – a two-hour wait is not as fast as a two-minute walk to the local small format store or a five-minute drive to a larger supermarket, where shoppers can mix and match brands with fresh produce, side step delivery charges and swerve the ubiquitous over-sized and excessive packaging that inevitably comes with their e-commerce order.
As a business, we feel that the FMCG sector will aim to embrace a 360-degree view of the customer and their journey. And it will be the retailers that are able to promote their brick and mortar outlets with a superb digital strategy that will be the ones that capture growth opportunities.
In fact, there is massive potential for conventional retailers to drive sales with creative approaches to the full branding mix – including packaging design – if they are agile enough to combine a variety of store formats with a credible online presence and an ability to capitalise on trends with rapid product development and range extensions.
If brands and retailers are savvy, they will ensure that their strategic methods work well in both the physical store and online. As a design and branding agency we understand that in a bricks and mortar setting sales are often reliant on the product’s location and how well they are merchandised. Often consumers can interact with the product, touching and even tasting it. With online, the product gets only a glimpse, with a competitor product just a mouse-click away. It’s therefore imperative that a product has stand-out and that the product benefit is clearly communicated.
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Another consideration for us and our clients who are navigating the online environment is to adapt traditional packaging design to the smallest possible mobile device. We consistently emphasise with brand owners that they need to get to the core of their brand and its essence, ensuring this is consistently communicated across all channels.
Something that is interesting is that millennials are opting for physical grocery stores over online ordering. According to a study by online lender Earnest, a strong loyalty towards traditional grocery stores remains among millennials, with a massive 90% of overall “eating in” spend going toward brick-and-mortars.
Millennials are also driving a new era of retail: the experience economy. A study from the Harris Group reported that 72% of millennials would rather choose an experience over a physical item. This group is looking for an experiential response to their shopper journey, that not only gives them the product they’re after but also offers a bit of something different.
Millennials crave engaging and immersive experiences with products and brands, spawning a variety of in-store campaigns utilising everything from virtual reality to pop-up instore tasting pods.
If millennials are to be the driving force of the FMCG market place then retailers need to ensure they take a creative approach to the customer journey, making it enjoyable and memorable. Something that requires the fusion of real world experiences within a bricks and mortar setting alongside a strong digital presence.
