For a grocery store to remain profitable it needs to attract and retain loyal shoppers, which is becoming increasingly more difficult to do. Grocers seem convinced that the best way to achieve this is by increasing online shopping, pick-up and delivery, with many using apps so customers can pre-order groceries over their phones.
But there seems to be a bit of a disconnect going on…
As it gets more difficult — and costly — to find people to work in the store, supermarkets are looking for ways to cut costs so they remain profitable. We’ve seen stores cut their operating hours, embrace self-checkout lanes and use robots to clean and stock the shelves at night.
We’re also seeing a continuing shift away from full-service to self-service options. And while this isn’t a new trend, it’s continuing to grow and accelerate, especially in departments like meat, bakery and deli.
It’s ironic. On the one hand, stores are suffering from staff shortages and trying to cut back on labor costs… on the other hand, they’re aggressively promoting the idea that people order their groceries online, either for pick-up or delivery.
I’m not convinced the economics of this decision makes sense. Charging someone five or ten bucks to walk around the store, pick, pack and deliver their groceries adds an enormous amount of labor and doesn’t come close to covering the costs associated with this service.
It’s a bit of a conundrum.
What do customers want?
That’s the million-dollar question.
Is online shopping something customers actually want? While some people view grocery shopping as a chore and something to be avoided at all costs, many more enjoy the experience. As a “hunter-gatherer” species, there’s something almost primal about heading to the store and choosing the groceries you’ll take home to feed your family.
It’s also hard to trust that a stranger will take the same care when selecting meats, produce or baked goods as you would.
Many people think younger shoppers prefer to order online, rather than go to a brick-and-mortar store, but it’s not true. Although they are more technologically savvy, they prefer a balanced approach — using technology where it makes sense without missing out on the experience only a physical store can provide.
Groceries dominate food spending for Gen Zs and millennials, with only a marginal percentage being online orders. They still prefer to shop in person, and according to research, only 10% of millennials and Gen Z shoppers said they prefer not to shop and do it out of necessity.
Here’s the point — while online grocery sales will continue to be a growing trend, it carries less weight than providing shoppers with a great in-store experience, so spend your labor dollars wisely.
The move away from full-service counters
Some grocers have fully embraced self-service, to the point of eliminating the meat counter in their stores altogether, opting to put meat products out for grab & go — whether prepped and packaged in the back or arriving case-ready at the store.
Another department where self-service continues to grow is in the Delicatessen. Busy people don’t want to “take a number” and wait in a long line for someone to slice their cold cuts and cheese for them.
Many grocers have settled on a hybrid model, offering full-service while slicing and packaging the more common items — such as ham, salami and cheddar cheese — to put in some type of grab & go display near the deli counter. Interestingly, a four or six-foot grab & go case can sell more product than a sixteen-foot deli counter. Something to consider, especially if space is an issue.
Bakery is another department where we see this trend toward self-service. Although the product may still be baked in-store, there is a trend to get rid of the service counter. Most people don’t need someone to hand them their bread or other baked goods, as long as they trust that it’s fresh.
The best way to convey freshness without having a service counter is to give shoppers a peek at the action going on behind the scenes. Letting customers see people baking bread, packaging meat and slicing cold cuts is reassuring and builds trust — they can see for themselves that the packages on display are fresh and are prepared in a clean environment.
Our line of food preparation cases gives you the flexibility of having a food preparation station behind with the option to include both self-service and full-service areas out front.
Combining full-service with self-service
To satisfy both groups of customers, some grocers are looking for a display counter that provides full service on the top, with self-service options on shelves below. On the face of it, that seems logical… but I see a conflict there. You have two different kinds of customers occupying the same space and interfering with each other.
This is a conversation I often have with our customers. I ask them why they want a combination case, and most say they are looking to reduce the amount of product they have sitting out while catering to those who want self-serve options. I always suggest, if possible, it would be better to separate the cases… and the customers.
This can be accomplished by reducing the size of the service case — we can make one as small as 40 inches long — and using the space beside the service case for a matching self-service display case.
This configuration makes it easy for all shoppers to get the level of service they want without getting in each other’s way.
It’s all about balance
The key to success in any business is to find the sweet spot, and the grocery business is no exception. The best way to move forward is to continue to elevate the customer experience in-store while finding ways to improve the profitability of fulfilling and delivering online grocery orders.
At Cayuga, we’re all about making grocery shopping an exciting experience by creating functional and innovative displays that are designed to delight the senses.
If you’d like some help reconfiguring your full-service counters to include more self-serve options — or want to get rid of your full-serve counters altogether — we can help transform your space. We’re also happy to answer any questions you may have about current trends and how they may impact your business.
Feel free to give us a call — we’re always happy to hear from you!
