Next time you run to the grocery store for bread and milk, you might find yourself staying for a champagne tasting. Or seduced by Comice Pears. Or perhaps you’ll just stay home and cook the elicoidali pasta and mascarpone cheese from your Blue Apron box.
The digital age has changed how we shop for everything, and now food is front and center on the disruption list.
It’s hard being an old-fashioned grocery store these days. Adults, for the first time since such data was recorded, are spending more money eating out than cooking in. But even when they do buy their food, the market is enduring what analysts coldly call “grocery channel fragmentation.”
Pam Danziger, a luxury goods expert, said simply that young eaters are on the hunt for something “distinctive and different.”
Small, boutique food shops that are part-restaurant, part-brew pub, part-exotic grocer are all the rage.
“I find more and more that millennials are looking for special experiences,” said Danziger, author of the book Shops That Pop. “They are not just looking for products. They want a better quality service experience from people who really know their stuff.”
They don’t just want a good pear. They want to know why that pear goes great with that salad. And they might even want to know who grew that pear.
“There’s nothing like going to specialty wine store where [workers] can really advise you on what you are getting,” she said. “This has happened with food now.”
It’s not just happening in hip urban areas on the coasts. Danziger points to small independent food retailers, like Dorothy Lane Market, in Dayton, Ohio, (with its Comice “Holiday Pear”) as examples of a national trend that seems to have staying power.
The do-everything grocery store is struggling to stay relevant in this environment — that’s why shopping carts have cupholders for craft microbrews sold by the growler now — but don’t make the mistake of thinking huge grocers have always ruled the food world. They are a relatively recent development, dating back to the 1930s, when food preparation time shrank as more women entered the work force. Specialty grocers echo a time before that, Danziger said, when everyone “bought local.”
“In the 30s, everyone went to the local butcher,” she said. “What is old is new again.”
Web-Surfing for Groceries?
Well, not everything. On the other end of the digital spectrum, consumers are increasingly skipping the shopping trip altogether and letting the specialty groceries come to them.
Home delivery isn’t new either: Firms have been trying to find the right formula to ship cereal and produce to homes since the beginning of internet time (Remember Webvan? Perhaps you’re not old enough). Blue Apron and competitors like Hello Fresh and Plated seem to have hit on a winning formula by combining the convenience of delivery with the quest for special experiences.
Unless you’re living under a rock or are over 38, meal-in-a-box firms neatly package ingredients and recipes with dry ice, and send it to your home with simple preparation instructions. For about $10, a fairly small meal and about 30 minutes of work, aspiring chefs can feel like culinary experts.
The rise of the meal-in-a-box business has been meteoric. Blue Apron said it delivered 500,000 boxed meals in 2013, and now it delivers 8 million boxed meals a month. HelloFresh, a German competitor, is eyeing a possible public offering next year.
“I don’t think we’ve seen shopping change so dramatically ever,” Marty Siewert, senior vice president for consumer and shopper analytics at Nielsen, told the Wall Street Journal. “Those things in the past that have been real drivers for grocery in terms of freshness and quality aren’t the key drivers for millennials.”
All these changes are occurring against a dramatically different grocery landscape. The Food Marketing Institute’s annual report is full of data showing how grocery shopping is in the midst of a revolution. For example, the days of one member of a household buying the food at one nearby grocery store are essentially over, the FMI said.
“Shoppers increasingly rely on a broader number of less traditional channels, or claim no retailer as a primary store,” it noted in its report.
Meanwhile, the majority of households now employ “co-shopping” or “shared shopping.” That means both partners in a marriage buy groceries — often because one doesn’t agree with the other’s taste in food, the report said. That means more trips to more stores.
“Traditional grocery store as a primary channel has dipped to just below half of all shoppers,” the report said.
Online shopping is still small but growing. While only 5% of shoppers say they use online-only retailers “regularly,” another 15% say they have done so occasionally, up from 11% in 2015. When you ask only millennials, the market segment uptake is even more impressive: 28% of those 18 to 37 have bought groceries online.
Digital is driving food shopping in other ways, too. Nearly 60% of millennials say they use digital coupons, and 66% say they look up recipes online while shopping. (If you’re looking for frugal meals, by the way, try this 16-cent breakfast.)
And lest you think they are only shopping for high-end arugula, one factor still trumps all others for food shoppers both young and old: price. That holds true for co-shoppers and specialty shoppers alike. All those groups say lower prices are the biggest factor in where they’ll shop, with nearly twice as many shoppers prioritizing savings over variety and quality.
Still, Danziger is sure that food consumers want more than iceberg lettuce and white bread, and the retailers who give them better experiences will survive the changes.
“People are looking for a higher quality of life, that’s what this is all about,” she said. “Retail success will be less about what you sell and more about how you sell it.”
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