Michigan Ag Connection - Valassis Addresses Need for Value in Era of Grocery Disruption

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Valassis Addresses Need for Value in Era of Grocery Disruption
Michigan Ag Connection - 07/26/2017

Valassis, Livonia, Mich., a leader in intelligent media delivery, shared insights on how grocers can thrive in today's evolving marketplace, where shoppers have more options than ever before.

While grocery shopping has traditionally been a ritual process, the industry is ripe for disruption. The competitive landscape has changed as evidenced by Amazon's recent acquisition of Whole Foods and the rapid expansion of click-and-collect shopping models. While grocers were once the predominant place to purchase food and household items, they now compete with supercenters, warehouse clubs, dollar stores, drug, DIY/home improvement, fresh local markets, c-stores, and of course, online shopping.

"The grocery industry is certainly not exempt from the digital disruption faced by other industries as marketers look to win consumer's attention and balance e-commerce and brick-and-mortar trips," said Curtis Tingle, chief marketing officer, Valassis. "To be successful, grocers must cater to what their customers want -- and that's value. Marketers need to put consumers first as they adapt to rapidly changing consumer buying behaviors, whether it's online or in-store."

With recent industry shifts, grocers should keep the following insights in mind as they strive to remain competitive and win shoppers' loyalty:

Consumers want value -- Consumer behavior is proving that they now value much more than price alone -- they value great products, convenience and savings enabling grocers to compete on a number of levels. The shopper's definition of value includes customer service, ease and added services such as online ordering and curbside pickup. These changing behaviors and rising expectations allow for retailer differentiation. One store may be more expensive, but offer a unique shopping experience or added convenience to offset the price difference.

Digital and brick-and-mortar commerce must coexist -- The brands that survive today's constantly evolving and competitive environment will be those that take a consumer-centric approach to create successful integrated strategies. Shoppers want to access mobile offers in-store through platforms like RetailMeNot, and also want print coupons at home to plan their shopping trips and easily redeem at checkout. Cater to this consumer demand, exist where your audience is and provide options.

Deals must be available across channels -- Coupons are the number one influencer of grocery purchases overall, per research from Prosper Insights & Analytics. Also, Valassis research indicates half of value-seeking consumers would be more likely to shop for groceries online if they could use more coupons, with 66 percent of millennials agreeing. Shoppers are sending a clear message: coupons -- both print and digital -- are highly desired. A solution such as Valassis' Consumer Activation Score can help marketers optimize their marketing campaigns with an integrated print and digital solution to reach value-seeking consumers in a highly targeted manner.

Circulars influence grocery planning -- Shoppers consume more media today while deciding what to buy, how to save and where to shop. Fifty-six percent of shoppers review the traditional print circular at home as their top money-saving measure. Additionally, 31 percent review the circular in the store and 26 percent, digitally. The circular is widely used today; however, what is promoted will likely change according to 2017 Advertising & Promotional Practices Among U.S. Grocery Retailers. Consumers should expect future versions will feature more perimeter categories, private brands and deli/fresh prepared food.

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