Many are starting to ask, “When will the supermarkets and stores disappear”, like we’ve seen it with the Danish hot dog stands. Many predict that supermarkets will be replaced by hypermarkets and discount chains that have been multiplying in later years.
The discount chains numbers and competition have however meant that Lidl, Aldi, Fakta, Rema 1000 and Netto are starting to widen their assortment of wares with things like freshly made bread and are starting to look more and more like supermarkets. They’re fighting for the same customers and are therefore experiencing deficits despite having new wares and well designed stores.
Internet commerce is growing, but it varies a lot depending on area and products. The pattern is that the big winners are electronics and appliances, travels and cultural experiences as well as sports apparel and outdoor equipment. Buying of groceries online has been at a low priority in DK and at just 5% in 2015. There is however a rising trend for families with children to shop more and more for groceries online.
That’s why we can expect a significantly larger share of grocery shopping being e-commerce in the coming years, since families with children are the biggest consumers in retail.
Danes like to buy fresh produce in the store. So we decided to find out why the Danes don’t shop produce online and we conducted a number of interviews with Danes of different ages, backgrounds, life phases and geography.
Perhaps surprisingly, most people, no matter their age, gender etc. said that they actually liked buying their groceries in the store, especially fresh produce, if they had the time. On the other hand, few like to buy the non-fresh items such as cleaning products, canned goods and toilet paper. They just want that over with.
Consumers tell us that they like a clean and nice looking store, where the wares appear fresh and yummy and that they can therefore look forward to them or are tempted to buy them. The store quality is assessed by most on how their fruit and vegetables look when you enter the store. The act of shopping is for a lot of people a change of pace and an oasis that signifies that you’re no longer at work.
The good, casual meeting in the store
Many also point out that meeting people at the store, both those you know and the employees at the store, has significance for their day. A short conversation and a kind and funny remark at the cash register helps brighten the day.
It’s noteworthy that especially the younger consumers are the ones who rate the service in stores as being very poor and that they often experience a poor attitude from the store employees. They simply put don’t think their behavior can be classified as service.
The degree of planning that goes into shopping depends on your age. The mature 30-55 year olds and seniors 55+ plan their shopping a lot more but still have room for impulse purchases. The younger consumers from 18-29 years old often shop day to day and very impulsively when they’re at the store.
Potential and challenges
Some – not surprisingly amongst the younger people – express that they’re positive in regard to shopping for groceries online. Some barriers need to be broken down however, before that can happen in earnest.
First of all, not many actually trust that the fresh produce has a good quality, if they’re ordered/bought online. This is probably why ‘Årstiderne’ has the most success selling to existing customers who already know the quality. Next is another challenge of understanding and experiencing how easy it is to shop online, which makes many older people dismiss shopping online for groceries. This will automatically change with the new generations of consumers that we know today and who are coming.
New and easy solutions for consumers need to be thought up. It might be integration between store and e-shop, so you can order goods at the store for delivery at home, while you bring home the wares you need and want now.
From selling products to selling solutions such as food for the family, the couple in their everyday life or selling the non-fresh goods for the next month or year. Something that’d make life easier for the family, the couple and the individual.
The biggest barrier is probably that we as people actually like meeting others in the store and that this informal and social meeting means something for our lives and our sense of belonging to the city, neighborhood and area.
The supermarkets won’t disappear, but…
Yes, we’ll still have supermarkets in the future. But great shopping places like supermarkets or quality items will likely be clearly marked, so we can come once a week to buy, feel and experience the great products and wares. Only those who understand how to tempt us and can guarantee high quality will survive.
There’ll also be a slightly reduced number of discount stores, where we can conveniently buy what we need.
And not least, we’ll see a lot more who buy groceries online and who will go to stores a lot less than today. We’ll have to see which of the players on the market are able to capture these consumers. The existing actors on the market are already preparing, but perhaps it’ll be a completely different party that knows how to combine customer wishes and needs with easy solutions for daily grocery shopping.
Published here 2017
Head of Research