Within 10 years, online food shopping will reach maturity

Within a decade, in the current climate of technology adoption and evolution, consumer spend on online grocery shopping could reach $100 billion, or the equivalent of 3,900 grocery stores based on store volume.

That’s the conclusion of new research being released by the Food Marketing Institute and Nielsen, which offered a preview of their “Digitally Engaged Food Shopper” analysis Saturday at the FMI Midwinter Conference in Scottsdale, Ariz.

The findings were discussed by a panel that included Dave Bornmann, SVP of business development at Publix Super Markets; Benno Dorer, chairman and CEO of the Clorox Co.; Chris Morley, president of Nielsen USA; and Tom Furphy, CEO of Replenium. The discussion was moderated by Thom Blischok, chairman and CEO of The Dialogic Group.

The group stressed a need for greater collaboration between retailers and CPG suppliers, who need to operate “like one integrated company,” declared Mark Baum, FMI chief collaboration officer and discussion panelist. Success will come to those who collaborate effectively, embrace automation, understand consumers better and use the new research as a call to action, panel members said.

The introductory set of insights from this joint, multi-year initiative offer a comprehensive look into the behaviors, motivations and expectations of the digitally engaged food shopper. This first perspective offers recommendations on how food marketers and manufacturers should be preparing their strategies and managing the organizational change that will be required to engage those shoppers.

“While we are more connected than ever to influence what shoppers buy, the window to influence those moments is narrowing,” Baum said. “FMI and its members will need to seize the opportunity to harness new skills and collaborate more seamlessly than ever before to effectively reach these digitally savvy food shoppers. We’re building the tools to help our members assess where they are in their connected commerce strategies.”

Initial findings from this study show that within the next decade, online food shopping will reach maturation in the U.S., far faster than other industries that have come online before. Research also revealed that the center store is likely to shift online faster than other departments, suggesting a fundamental evaluation of the role the store plays in digital food shopping.

“The grocery business truly is at a digital tipping point, where every aspect of the shopper’s journey will soon be influenced by digital, and increasingly enabled by digital platforms,” Morley said. “The need for retailers and manufacturers to know the differences around how consumers shop online versus in-store is greater than ever before. Analytics will be key for retailers and manufacturers to understand the digitally engaged food shopper on a deeper level. Beyond unified insights that connect the dots across consumer interaction and platforms, the winning strategy will turn metrics into action steps towards effective digital engagement.” read more

By Jim Dudlicek, EnsembleIQ
www.progressivegrocer.com/departments/technology/fmi-midwinter-digitally-engaged-food-shopper

The health and wellness trend has gained huge momentum in the food retail industry over the last few years, and 2017 is shaping up to be no different. From national chains to independent store operators, retailers and brands will likely incorporate health and wellness into their business strategies this year. But what specifically will they focus on?

If 2016 was any indication, there are several health and wellness trends that food retailers and brands can expect to carry into 2017. And after combing through coverage in SmartBrief’s food and beverage newsletters, we identified some of last year’s biggest trends in health and wellness that the food industry should keep in mind in the coming year.

In-store efforts and events
Schnuck Markets offered dietitian-led store tours and cooking classes for new parents through their Baby Month initiative, Raley’s Supermarkets helped shoppers take small steps toward healthier lifestyles with its “Let’s Begin” program and Inserra Supermarkets ShopRite celebrated a decade of its retail dietitian service through a Healthy Meals Makeover event series last year, a string of similar efforts that will likely continue into 2017. Kroger banners Ralphs and Food 4 Less launched an effort that paired doctors, dietitians and nutrition experts with shoppers in stores to help them make healthier food choices. Last year, the number of dietitians working in retails stores neared the 1,000 mark, the Retail Dietitians Business Alliance reported.

“We’re really seeing the supermarket registered dietitian shine,” FMI’s Heather Garlich told the Journal News.

Last year’s in-store health and wellness efforts were not all focused around retail dietitians. This year, the industry could also see events like Produce for Kids’ partnership with Power Your Lunchbox Pledge, which included a campaign that provided recipes, tips and promotions aimed at helping families eat healthier lunches.

Easy, healthy meals and snacks
Produce for Kids’ healthy lunch campaign fits into another 2016 trend that could have legs into 2017. Shoppers sought out healthy meal and snack options, but they also looked for options that were easy and convenient, which are two words the food retail industry could hear a lot about this year too.

Healthy brand EatingWell teamed up with Bellisio Foods last year to offer easy-to-prepare frozen entrees like Cherry Port Pork that are also free of preservatives, artificial colors and hydrogenated oils. Meanwhile, Hormel Foods focused its product expansion around convenient, healthy offerings, adding Rev Bites, Muscle Milk bars and other portable better-for-you snacks. They are just two of many brands that tapped shopper demand for healthy and convenient food options last year, and expect more to come in 2017.

Better-for-you snacks and beverages
Hormel’s better-for-you product launches also highlight last year’s trend toward better-for-you snacks and beverages, which is sure to remain relevant this year. Makers of snack packs took advantage of last year’s demand for healthy snacks by offering veggies with built-in dips and other pairings such as cheese cubes and pretzels.

In the fall, PepsiCo made plans to revamp its lineup of snacks and beverages to focus more on health through efforts including seasoning its Frito-Lay offerings to decrease sodium and gradually lowering the calories in two-thirds of its beverages to 100 calories or less per 12-ounce serving. And Pepsi wasn’t the only company turning its focus to healthier beverages last year. Research from Canadean found that functional drinks including vegetable blends and probiotics were seeing increased interest, which shows no signs of slowing down this year.

Functional, natural and organic foods
Consumers’ cravings for functional beverages last year points to another trend likely to continue into 2017. Functional foods like fermented foods that promote gut health and immunity and chocolate products that also provide health benefits continued to gain popularity last year. Meanwhile, shoppers are also likely to continue seeking out natural and organic products this year, after sales in the category were slated to reach $69 billion last year, which was a trend that showed up in the aisles of national retailers and smaller chains alike.

By Julia Russell
http://www.smartbrief.com/original/2017/01/store-events-easy-options-and-other-health-trends-food-retail-year?utm_source=brief

Friday, 20 January 2017 16:41

The 2017 Forecast for Beverages

Projections are positive for both packaged and alcoholic beverages.

While convenience stores are evolving in terms of the products and services they offer consumers, they remain a primary destination for those who want to make a quick beverage purchase.

Seven in 10 retailers (70.6 percent) expect their packaged beverage sales to increase in 2017, and only 2.9 percent expect sales to decrease. The projected net change is 3.3 percent, according to the findings of the 15th annual Convenience Store News Forecast Study.

The CSNews Forecast Study provides dollar and unit volume projections in key c-store product categories based on data from various sources, including Nielsen for category sales history; TDLinx for store counts; and government sources for motor fuel volume and pricing data. The data is then run through a sophisticated projection model and presented in summary form. Maureen Maguire, founder and CEO of New York-based ThinkResearch, oversees the Forecast Study process.

C-store operators are right to be optimistic. According to the CSNews Forecast Study numbers, dollar sales of packaged beverages — which includes carbonated soft drinks, bottled water, sports and energy drinks — will increase 5.2 percent across the total industry. On a per-store basis, dollar sales are expected to increase 4.5 percent, and unit volume is expected to increase 4.1 percent. All of these figures are above the estimated results for 2016.

Although they still take up the most space inside convenience store cold vaults, carbonated soft drinks are likely to see another year of status-quo growth in 2017, with an expected rise of 0.9 percent in dollar sales per store and 1.3 percent in unit volume per store.

Perhaps reflecting consumers' growing interest in healthy eating and drinking habits, or even concern over the safety of tap water following national coverage of the water crisis in Flint, Mich., bottled water will see more growth in dollar sales per store (up 4.4 percent) and unit volume per store (up 2.3 percent), although this marks a slowing compared to 2016.

As for alcoholic beverages, price increases are likely to boost beer dollar sales in 2017, which are expected to rise 1.4 percent per store and 2.1 percent for the total industry. Unit volume is forecasted to be flat. C-store operators believe the biggest impact on beer will come from states implementing new laws regarding beer sales, such as Pennsylvania did in 2016.

The continued popularity of craft beer is a likely contributor to higher prices. Dollar sales of microbrews are expected to increase 12.6 percent while unit volume increases 11.1 percent, both on a per-store basis. This marks another year of slowing growth for the segment, but retailers note it remains "hot," with some reducing their stock of domestic brews in favor of craft. One retailer stressed the importance of "stay[ing] relevant with evolving brands in craft."

Angela Hanson
http://www.csnews.com/industry-news-and-trends/special-features/2017-forecast-beverages

57.5% of all shoppers use the omnichannel service, but only 31.6% describe it as being a smooth process, according to a new report.

North American shoppers, 92% of whom say they regularly shop across multiple channels, think retailers have room for improvement when it comes to fulfilling online orders in-store.

That’s according to omnichannel retail management software vendor iVend Retail, which on Monday released its Great Omnichannel Expectations 2016-2017 Shopper Survey Report at the National Retail Federation Big Show in New York. The vendor in October surveyed 1,000 shoppers throughout North America—750 in the United States and 250 in Canada—and found 31.6% of those shoppers find picking up online orders in-store to be a smooth process.

“This suggests there is still work to be done to integrate e-commerce, inventory management and in-store systems to improve the in-store collection experience for customers,” iVend writes.

That’s not stopping shoppers from taking advantage of buy online, pick up in store services, however: 57.5% say they use the offering, with 65.3% of those consumers saying they do so to avoid shipping costs. Other top motivating factors for consumers include convenience (29.2%) and being able to return the product instantly if it doesn’t meet their expectations (23.5%).

That is similar to a report done by Internet Retailer last year, which surveyed 217 U.S. shoppers and found 73% picked up an online order in store to avoid having to pay for shipping, while 32.2% cited convenience as a motivating factor.

According to Top500Guide.com, 157 of the Internet Retailer 2016 Top 1,000 e-retailers in the U.S. offered a buy online, pick up in store option in 2015, 101 of which are retail chains. Among the Top 500 largest retailers in North America, 95 offered buy online, pick up in store in 2015, up 50.8% from 63 in 2014. 74 retail chains offered the service in 2015, compared to 51 in 2014.

iVend’s data finds that shoppers want retailers to offer a more digitally connected in-store shopping experience, with nearly half (46.4%) saying they want retailers to offer free in-store Wi-Fi and 33.5% saying they want personalized promotions sent to them on their phones the moment they walk into a store.

The survey also found:

  • 36.9% of consumers say kiosks or digital help desks would improve their in-store experience.
  • 36.5% continue to research a product after purchase to determine if they got the best price.
  • 50.5%, feel equally rewarded with loyalty rewards online and in-store compared with 40.3% who felt that way a year ago.

BY MATT LINDNER
https://www.internetretailer.com/2017/01/16/retailers-havent-perfected-buy-online-pick-store-yet

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