Experience Radar 2013: Lessons from the US grocery industry
Upcoming SlideShare
Loading in...5
×
 

Experience Radar 2013: Lessons from the US grocery industry

on

  • 2,468 views

With today’s shopper armed with mobile apps and virtual offers, and increasingly immersed in an interactive environment, success depends on just the right blend of self-service and helpful staff and ...

With today’s shopper armed with mobile apps and virtual offers, and increasingly immersed in an interactive environment, success depends on just the right blend of self-service and helpful staff and understanding grocery shopper values to set the gold standard for customer experience across all industries.

Facing commoditization, grocery has turned to experience to grow their top lines and maintain margins, according to Experience Radar 2013: Lessons from the US Grocery Industry, one in a series of customer-centric reports that measures the experiences of about 6,000 US consumers across multiple industries.

The report defines the five behaviors companies can adopt to enhance customer experience and create value: make it fast, emotionalize shopping, balance high-tech with high touch, avoid spill and empower customers to make satisfying choices.

Statistics

Views

Total Views
2,468
Views on SlideShare
2,468
Embed Views
0

Actions

Likes
0
Downloads
60
Comments
0

0 Embeds 0

No embeds

Accessibility

Categories

Upload Details

Uploaded via as Adobe PDF

Usage Rights

© All Rights Reserved

Report content

Flagged as inappropriate Flag as inappropriate
Flag as inappropriate

Select your reason for flagging this presentation as inappropriate.

Cancel
  • Full Name Full Name Comment goes here.
    Are you sure you want to
    Your message goes here
    Processing…
Post Comment
Edit your comment

Experience Radar 2013: Lessons from the US grocery industry Experience Radar 2013: Lessons from the US grocery industry Presentation Transcript

  • Experience Radar 2013 Lessons from the US Grocery industryLocating the sourcesof value behindexceptional customerexperiencesDecember 2012 volume 2
  • Experience mattersTitle of the pageSubtitle hereCustomer expectations are set Few experiences happen as often or grab share of wallet and stimulate the senses mense pressure to connect with and earn the loyalty of their customers every day. Havingand reset everywhere today. more than grocery shopping. Expectations are set and reset at an unprecedented pace. faced commoditization earlier than most industries, Grocery has turned to experienceBusiness leaders must learn Incredibly dynamic, Grocery is a testing ground and also a great learning place for to grow the top line and maintain margins. Other industries would do well to heed thewherever they can. other industries. hard lessons learned in Grocery. Grocery today is increasingly less influenced Experience Radar helps companies locate by supply chain and more by design prin- two elements critical to pleasing their cus- ciples. Think about how many experiential tomers and growing their business: experi- concepts have been borne from the Grocery ence segments and experience enhancers. environment—packaging evolution, impulse buying, immersive interactions and trial • Experience segments are those natu- enticement, to name a few. ral groupings of customers that appear once survey respondents are categorized So much of what is important to a customer’s by the features they value, their demo- experience (e.g., convenience, presenta- graphics and behavioral profiles. They’re tion and quality) can be found in Grocery. who you can build a business around. Grocery is the pinnacle of where products, • Experience enhancers are those services and environments intertwine. To- market insights that, when translated day’s shopper is equipped with mobile apps into practical actions, can create value for and virtual offers, depends on just the right your customers. They’re what you might blend of self-service and helpful staff, and do to grow your revenue. is increasingly immersed in an environment that behaves more like a restaurant than the Experience Radar points the way to value old corner market. and profits by identifying ways to serve your customers—particularly those seeking an Given increasing competition, fickle custom- experience that’s second to none. ers and slim margins, grocers feel an im- Best, Paul D’Alessandro Lisa Feigen Dugal PwC US Customer Impact Leader PwC US Retail & Consumer Advisory Leader Experience Radar 2013 | US Grocery industry 2
  • Customer insights Table of contents volume 2for the US GroceryindustryPwC’s Experience Radar helps businesses find the often 04 Grocery challenges and opportunitieshidden sources of value that drive exceptional, differentiatedcustomer experience. 05 The 5 core attributes of the Grocery customer experienceBy helping grocers rank their product and service features,Experience Radar locates opportunities to create value andthereby bolster top-line growth and bottom-line results. 07 Putting the Grocery customer first—the experience segmentsThis year’s series of studies measures the experiences ofabout 6,000 US consumers across multiple industries.1 TheExperience Radar assigns value to a broad set of customer 12 Building experiences that customers value—the experienceexperience attributes broken down into industry-specific enhancerselements and then ranked by what target segments value most.Our methodology employs a conjoint survey technique to 30 About moments of truthreveal insights that can be honed to improve precision. Other,more traditional customer experience studies typically do nottie to “hard economics” like value measures, price elasticityand churn metrics. Experience Radar does. 31 More about our methodologyWhile the results outlined in this report are at the industrylevel, PwC can use this same methodology to develop an 32 Appendix—more on the experience segmentsExperience Radar that is customized to your business.1 Retail Banking, B2B Software, Media & Communications, Grocery, Airlines, Pharmaceuticals and Home Services. Experience Radar 2013 | US Grocery industry 3
  • Grocery challenges andopportunities Like all retailers, grocers are focused on their shops for groceries, these retailers must be brick-and-mortar footprint, store remodels/ ready to cater to a wide range of consumer renovations and how best to operate in an preferences and demands, all the while omnichannel world. And, because everyone balancing the threats identified here. Threats Opportunities • Fierce competition from supercenters, dol- • Satisfying customers through value-added lar stores, traditional grocers, local stores, service, amenities and offerings primarily competing on price • Broadening acceptance of private label • Fluctuation in commodity prices and products margin pressure • Expansion of loyalty programs to offer • Meeting the changing expectations special discounts targeted at individual of customers, particularly given rapidly consumers as well as rewards for loyalty changing demographics • Being in the right location with the right • Determining how to achieve an omnichan- product mix at the right time nel customer experience (e.g., how much investment, if any, to make in going online) To delight customers through experiences as he checks out a particularly demanding they value, grocers must call on everything customer. They should not only accept but —from the newest technologies such as geo- relish their role as the retail testing ground tagged mobile coupons to the cashier’s smile for best-in-class customer experiences. Experience Radar 2013 | US Grocery industry 4
  • Experience Radar measures the experiences of 5 The core attributes of the Grocery thousands of customer experience consumers Quality 1 Support 2 Convenience 3 Performance and Friendliness and Anytime, anywhere value received ease of obtaining access help We use our primary conjoint survey technique1 to assign values to these attributes at an industry level Presentation 4 Community 5 Aesthetics, Customer’s arrangement of personal brand and offer connections with others1 Adaptive Choice-Based Conjoint. Experience Radar 2013 | US Grocery industry 5
  • Title of the pagePutting the GrocerySubtitle here rstcustomer fiCustomer experience is an essential differentiator Experience Radar can help you:for grocers—and given how often people shop for • Build experiences that matter to your customers using a variety of levers such as presentation, community andgroceries, grocers have many opportunities to human serviceexperiment and fine tune. • Figure out whom to target and how to market experience-Peel back the onion. Get to the core of what your based offeringscustomer is and values. • Set yourself apart in an increasingly commoditized industry of low margins • Connect the dots between consumer experience, customer value and sustainable financial performance • Increase basket size and frequency While the insights in this report focus on the Grocery industry, many of the lessons are applicable to customer experience management across industries. Experience Radar 2013 | US Grocery industry 6
  • 2013 experience segmentsExperience Radar’s What is it? This schema uncovers which customers What is its value? This segmentation provides direction onGrocery customer value grocery experiences and what they want. whom to target and how to market experience-based offerings. Use it tosegmentation complement the work you are already doing with customer segmentation and voice of How’s it different? the customer. Traditional market segmentation is usually based purely on demographics. In contrast, we categorize grocery customers by the features they value, their social demographics and their behavioral profiles.The 4 experience Experiential Traditional Mindful Frugal 1 Erica 2 Terri 3 Maria 4 Fredsegments Experience Radar 2013 | US Grocery industry 7
  • Snapshot of Grocerysegments Experiential Traditional Mindful Frugal 1 Erica 2 Terri 3 Maria 4 Fred Who is this segment?Experiential Traditional Most affluent and Oldest segment with Youngest segment with Middle-aged andErica Terri educated segment, many retired and living many single urbanites middle-income nearing or in with their spouses in segment, many living retirement small suburbs with a family in the suburbs What does this segment value? She wants a premium A traditionalist, he On the go, she wants Juggling a family and experience across doesn’t care for digital grocery shopping to demands on his time, the spectrum—from or specialty frills. fit easily into her busy he typically shops knowledgeable He enjoys simple, schedule. She is eager once a week. He views employees to wide conventional ways of to save time—she grocery shopping as a product selections. shopping as well as values ordering online, chore, and he lets price She is happy to switch conventional brands. preplanned meals and trump everything else. to grocers that go the mobile applications forMindful Frugal extra mile. checkout and coupons.Maria Fred How important for this segment is sharing feedback on experiences? • Most likely to spread • 4 out of 5 share good • Most likely to • Vocal about his good the word among experiences with broadcast bad experiences family and friends friends and family experience across • Even more when she finds a • Close to 70% stop her networks vocal about bad great grocer sharing memorable • Uses both online and experiences and • Most likely to share experiences after a offline channels most likely to share good experiences for month for years to come years to come Experience Radar 2013 | US Grocery industry 8
  • Comparing theexperience segments Most Which segment has the greatest lifetime value? Least Experiential Traditional Mindful Frugal 1 Erica 2 Terri 3 Maria 4 Fred How to serve them • Offer a wide • Invest in staff to • Provide conve- • Help him feel that range of specialty help him while he niences to make his store time is products. checks out. her life easier and efficiently spent. • Train staff to be • Retain traditional healthier. • Clearly mark sale extra courteous products or switch • Ensure your items and direct and leverage her out gradually when range of products him to them. good word-of- new options are includes organic • Keep checkout mouth to attract introduced. produce as well as kiosks open and new customers meal planning and quickly moving. with similar delivery services. preferences and behaviors. Experience Radar 2013 | US Grocery industry 9
  • Overall, what docustomers value ingrocery shopping? Customer value for top features Higher 14% Checkout Attendant checkout 4% DemandHigh-quality customer experience is a defining Farm-sourced productsfeature for shoppers at grocery stores. When Organic and locally sourced 9% Staff knowledge 2% 11% Stocking personnelthey can afford it, customers are willing to pay Eco-friendly packaging Recyclable materials throughout the storea premium for well-trained and attentive staff Shopping options In-store and 10% online marketswho know the store well. Great staff can make Loyalty points Storewide discountsshopping trips far more efficient.In addition to good service, customers seek a Lower Lower Willingness to pay Higherstrong emotional reward from their shoppingexperience. Buying organic food and products This chart ranks features1 based on customer demand and willingness to paywith environmentally friendly packaging makes for each feature. The percentages indicate the premium size customers are willingshoppers feel more positive about their choices. to pay for each feature. 1 Features tested, however not included above, include store type, weekly coupons, product labels, and meal planning. Experience Radar 2013 | US Grocery industry 10
  • Comparatively, how dosegments value features? Identify a segment’s demand and willingness to pay for a feature com- pared to the overall population.Compared to the other segments, Experiential Comparative willingness to pay a premium for the featureErica1 and Mindful Maria1 are the most willing to Less willing Overall population More willingpay across key features. Both segments are willing Ecofriendly packaging Recyclable materialsto pay a premium for better-quality farm-sourced 23% 30%products and environmental packaging. And both Shopping options In-store and online marketssegments see staff knowledge and support as 3%critical to a good grocery experience. Checkout Attendant checkout 3%Traditional Terri1 values customer support along 20% 28%with Experiential Erica and Mindful Maria. As Farm-sourced products Organic and locally sourcedan older customer, however, he wants a more 24% 27% 9%conventional shopping experience from products Loyalty points Storewide discountsto packaging. 4% 11% 9% Staff knowledge Stocking personnel throughout store 9% 13% 14% Traditional Terri Frugal Fred Experiential Erica Mindful Maria Circle size proportionate to feature demand This chart compares segments’ demand for individual features1 as well as their1 Links to 2013 Grocery Experience Radar segments of Experiential Erica (high-income willingness to pay for the feature. The percentages indicate the size of the premium and health-conscious parent), Mindful Maria (young, urban, eco-conscious conve- nience seeker), Traditional Terri (retiree, conservative and consistent shopper) and that the segment is willing to pay for an enhanced experience with that feature. The size of Frugal Fred (middle-aged, low to mid income, and deal seeker). the bubble indicates the demand for the feature. 1 Features tested, however not included above, include store type, weekly coupons, product labels, and meal planning. Experience Radar 2013 | US Grocery industry 11
  • Title of the page2013 experienceenhancersSubtitle hereBuilding (and growing) The five behaviors that grocers can adopt to enhance customeryour business by designing experience and create value are:and delivering exceptionalcustomer service 1 2 Make Emotionalize it fast shopping 3 4 5 Balance Avoid Empower high-tech spoil customers to make with high-touch satisfying choices Experience Radar 2013 | US Grocery industry 12
  • Make it fast 1 Experience Enhancer Page oneConvenience matters in grocery. And convenience We live by the clock. We want to get in and out of grocery stores a top influencer of purchase when customersin grocery means—first and foremost—short as quickly as possible so we can get on with are deciding where to shop—and also a topcheckout lines. Be sure to remember other factors, our day. This impatience makes convenience driver of great experiences.too, such as good location and mobile applications. Top influencers of purchase Price Convenience Product breadth Reward card Reputation28%of customers purchase based 37% 28% 20% 5% 4% of customers purchase based on convenience Fast lines matter more than other aspects of convenienceon convenience such as location and self-checkouts. Fast checkouts account for 30% of memorable great experiences. Experience Radar 2013 | US Grocery industry 13
  • Make it fast 1 Experience Enhancer Page two Convenience matters in grocery. And convenience Customers want service on-demand and will walk out if they do not get it. in grocery means—first and foremost—short Waiting at a grocer is more frustrating than waiting at doctors’ offices and the Department of Motor Vehicles combined.1 Our internal clocks exaggerate how long we wait for service— checkout lines. Be sure to remember other factors, a 4-minute wait may feel like 20 minutes. And with every tick of our internal clock, the experience degrades. too, such as good location and mobile applications. 7x 1 in 5 KIOSK KIOSK “Not enough cashiers...I just wanted to be done and go home.” shoppers do not repurchase “Only 2 cashiers open and lines so long that I after a bad experience. And never went back again 2 in 5 smartphone users Mindful Maria wants delivery to that store.” do not return. and meal planning services more Mindful Maria,2 a member of the digitally plugged-in generation, relies on mobile convenience than others not only to check out but also to plan what to purchase and eat. Mobile curates her experience. Mindful Maria seeks: Pre-visit During Post-visit mobile smartphone digital meal planning coupons checkout and delivery 1.8x 1.6x 7x1 Stone, Alex. "Why Waiting is Torture," The New York Times. August 2012. more than others2 Links to 2013 Grocery Experience Radar segments of Experiential Erica (high-income and health-conscious parent), Mindful Maria (young, urban, eco-conscious convenience seeker), Traditional Terri (retiree, conservative and consistent shopper) and Frugal Fred (middle-aged, low to mid income, and deal seeker). Experience Radar 2013 | US Grocery industry 14
  • Make it fast 1 Experience Enhancer Page threeConvenience matters in grocery. And convenience Recommendationsin grocery means—first and foremost—short You need to:checkout lines. Be sure to remember other factors,too, such as good location and mobile applications. Be transparent with waiting Empower customers with information about expectations are set, customers are less likely checkout lines and wait times. Use segment- to become irritated or leave with a negative specific channels to inform customers about impression of the entire shopping trip. wait times and best times to shop. Once their Boost digital convenience In a wired-in world, customers value mobile checkouts and coupons that let technology-savvy solutions for store shoppers check out on their own via checkout. Prioritize and pilot mobile and smartphone apps or staff handheld devices. tablet options—consider, for example, Make meal planning easy Customers want options that are kind to expand your culinary horizon and invest in their waistlines and to their wallets. Figure a “grocerant”—a mix of grocery and restau- out alternatives to restaurant fare that will rant ready-to-eat options far more inviting lure in customers seeking convenience, than the traditional deli counter. variety and well-being. One option is to Experience Radar 2013 | US Grocery industry 15
  • Some hidden truths surfaced in this year’s Experience Radar In-store is still the preferred way to shop for groceries. 98% of shoppers shop in a physical store. Local and products are valued byThe big question: organic 1 in 2 customers. 46% want organic products and will pay a 4% premium for them.What might this meanfor the future of your Rude employees account forbusiness? almost a third of bad experiences. 28% of bad memorable experiences resulted from discourteous staff. Experience Radar 2013 | US Grocery industry 16
  • Emotionalize shopping 2 Experience Enhancer Page oneEmotions are generated by products, services, Price is important. But sensory experiences—the thrill of finding a good deal and the drama of the presentation—are also key.and the spaces in which they exist. Create Customers often choose what to buy based on how they feel as they shop. Evokingrelationships with customers by evoking positive emotions that customers value will keep them coming back. 2 5emotions based on what they care about. For in customers, price is the top factor in determining where to shop.10% Validate these customers’ choice of store. Help them feel good about saving money. 20% IN-STORE OFF SAVINGS! “They honor other “Saving a ton of money stores’ prices.” with coupons for things I love.”premium customers are willingto pay for a storewide discount 10% Premium customers are willing to pay for a storewide discount loyalty program.loyalty program “Helped me stay on budget by pointing out coupons Lives for the and planning my meals.” bargain rush. Price sways his purchase Mindful Experiential Traditional Frugal decisions more than those Maria1 Erica1 Terri1 Fred1 of any other segment. -6% -3% 0% 11% Importance of price 1 Links to 2013 Grocery Experience Radar segments of Experiential Erica (high-income and health-conscious parent), Mindful Maria (young, urban, eco-conscious convenience seeker), Traditional Terri (retiree, conservative and consistent shopper) and Frugal Fred (middle-aged, low to mid income, and deal seeker). Experience Radar 2013 | US Grocery industry 17
  • Emotionalize shopping 2 Experience Enhancer Page twoEmotions are generated by products, services, Brands that reflect customers’ natural and sustainable values reinforce their sense of self.and the spaces in which they exist. Create The 150% growth rate “I want the goldrelationships with customers by evoking positive standard of food; of farmers’ markets in the past decade2emotions based on what they care about. means that sustainable and healthy health is my focus.” practices are here to stay.30% Experiential Erica1 and Mindful Maria1 receive a strong emotional reward from buying good- for-you products untarnished by artificial additives, sweeteners, colorings and preservatives. It is even better when the packaging or sourcing of products support these customers’ values of sustainability and reuse. Mindful Maria Value for natural 16% for organic and localpremium Mindful Maria1 will 30% for recyclable Recyclable packaging packagingpay for recyclable packaging Experiential Erica 19% for organic and local Traditional Terri1 23% for recyclable Frugal Fred1 packaging Organic and local products 1 Links to 2013 Grocery Experience Radar segments of Experiential Erica (high-income and health-conscious parent), Mindful Maria (young, urban, eco-conscious convenience seeker), Traditional Terri (retiree, conservative and consistent shopper) and Frugal Fred (middle-aged, low to mid income, and deal seeker). 2 US Department of Agriculture, August 2012. Experience Radar 2013 | US Grocery industry 18
  • Emotionalize shopping 2 Experience Enhancer Page three Emotions are generated by products, services, Recommendations and the spaces in which they exist. Create You need to: Personalize relationships with customers by evoking positive emotions based on what they care about. loyalty programs Shoppers will return to stores that offer and use predictive business intelligence to them consistent deals on products they offer targeted and personalized deals. These love. Invest in robust loyalty programs that programs not only excite customers but alsoGo the reward regular customers with discounts and help them develop an emotional attachment special deals. Analyze customer behavior to your store. organic localextra Offer and Organic lifestyles are not a passing trend. their groceries come from and how they are Expect this trend to grow exponentially in the transported. Customers like Experientialmile coming years. Expand your organic and local Erica1 and Mindful Maria1 are willing to pay offerings to lure the fast-growing number a premium for the peace of mind that comes of grocery shoppers who care about where from buying organic and local. Go green Customers embrace brands that reinforce to bring customers in the door—also keep their lifestyles. With growing awareness of your bottom line in check. Sustainability global warming and recycling, customers reporting and practices have skyrocketed1 Links to 2013 Grocery Experience Radar segments of Experiential Erica (high- like Mindful Maria are willing to pay a 150% in the last two years and are expected income and health-conscious parent), Mindful Maria (young, urban, eco-conscious convenience seeker), Traditional Terri (retiree, conservative and consistent shopper) premium for reusable and sustainable to continue to rise.2 and Frugal Fred (middle-aged, low to mid income, and deal seeker). packaging. Invest in sustainable solutions2 PwC, Retailing 2020: Winning in a Polarized World. PwC Report, 2012. Experience Radar 2013 | US Grocery industry 19
  • Balance high-tech with 3 Experience Enhancerhigh-touch Page oneStaff can make or break a shopping experience. Promotions and high-tech gadgets draw customers in, but…Customers still mostly shop for groceries in person.They value help from staff—and not just behind the …good experiences KIOSK with staff all overregister anymore. the store are what KIOSK keep customers coming back.1/3 Despite the rise of e-commerce, 98% of grocery shopping is done in store. As the #1 influencer, staff quality impacts where customers shop one-third of the time. Good experience drivers Bad experience driversof memorable bad 48% 32%experiences due tostaff attitude Staff “There was a very long line and only one rude cashier.” 21% of customers do not “I hate it when cashier ignores the repurchase after a bad experience. customer to gossip with friends.” Rude employees have a permanent “I hate having to wander forever to impact on business. find someone.” Experience Radar 2013 | US Grocery industry 20
  • Balance high-tech with 3 Experience Enhancerhigh-touch Page twoStaff can make or break a shopping experience. Different customers value different staff services in the store.Customers still mostly shop for groceries in person. Intimidated by new technology,They value help from staff—and not just behind the he wants employee help when he checks out. 3 4register anymore. Traditional Terri1 Checkout via attendant out of Want staff help at Customer value28% Checkout checkout and are via kiosk willing to pay a 28% premium Checkout via phone Feature enhancementpremium Traditional She wants a boutique experience.Terri1 is willing to pay She expects staff throughout the store to offer personalized recom- mendations at a moment’s notice.for attendant checkout Experiential Erica1 Across store 3 out of 5 Customer value Want staff across store to help select products At and are willing to pay a checkout Very specialized 13% premium knowledge Feature enhancement 1 Links to 2013 Grocery Experience Radar segments of Experiential Erica (high-income and health-conscious parent), Mindful Maria (young, urban, eco-conscious convenience seeker), Traditional Terri (retiree, conservative and consistent shopper) and Frugal Fred (middle-aged, low to mid income, and deal seeker). Experience Radar 2013 | US Grocery industry 21
  • Balance high-tech with 3 Experience Enhancerhigh-touch Page threeStaff can make or break a shopping experience. RecommendationsCustomers still mostly shop for groceries in person. You need to:They value help from staff—and not just behind theregister anymore. Invest in employees As the number one driver of good and bad training and benefits program to create experiences, employees must be hired and a front-line staff who create engaging managed with care. Poorly trained and experiences that motivate shoppers to motivated staff leave customers feeling return and employees to stay. frustrated and exasperated. Reevaluate your Balance Although high-tech self-checkouts are automation attendant checkout to avoid the technology essential, ensure they’re not the only difficulties. Many customers also enjoy the option. Customers like Traditional Terri1 friendly banter with and sense of community feel more at ease with conventional from engaging attendees on their way out. methods and will pay a premium for Know your customers’ preferences Have a clear understanding of your product knowledge and can assist these shoppers’ preferences. Customers like shoppers. Others—like Traditional Terri1— Experiential Erica1 want a boutique are looking for a neighborhood feel, and experience tailored to her needs. Invest would rather have a friendly checkout agent in a few on-call specialists who have deep than one with specialized knowledge. 1 Links to 2013 Grocery Experience Radar segments of Experiential Erica (high-income and health-conscious parent), Mindful Maria (young, urban, eco-conscious convenience seeker), Traditional Terri (retiree, conservative and consistent shopper) and Frugal Fred (middle-aged, low to mid income, and deal seeker). Experience Radar 2013 | US Grocery industry 22
  • Avoid spoil 4 Experience Enhancer Page oneShoppers are easily frustrated and quick to Customer relationships spoil as easily as produce.switch grocers. But instead of telling their Almost three-fourths of customers shop at more than one grocery store. They are not loyal and may even be antagonistic—even before they have bad experiences.1 And bad experi-grocers about bad experiences, they warn their ences at grocers are all too common.networks instead. “Lines were absurd...never went back.”2/3rds “My apples were rotten, didn’t shop “It was so dirty, I there again.” left immediately.” “They refused to let me return anything.”of customers have had bad Reported a bad experience Of those who had a badexperiences at a grocer experience, half look for better options. more than 2/3rds 2 in 5 customers looking for better options never return after a bad experience. 1 “Grocery Industry Falls Short in Building Customer Loyalty.” MarketingCharts. IBM, 07 Nov. 2011. Experience Radar 2013 | US Grocery industry 23
  • Avoid spoil 4 Experience Enhancer Page twoShoppers are easily frustrated and quick to Customers do not report bad experiences to their grocers—but they are quick to do so with their networks. And they don’t stop talking for a long time.switch grocers. But instead of telling theirgrocers about bad experiences, they warn their With their grocers, customers are quiet. They share less thannetworks instead. in any other industry. Percentage who do not report issues 2.1x46% Grocery 46% Retail Banking 24% grocery shoppers Media & more likely to 21% Communications never report issues With their friends, customers are very talkative.of customers do not report 92% willing to share bad experiences with othersissues to their grocer 82% of the online population use social media 1 3 in share their bad experiences six months or longer Experience Radar 2013 | US Grocery industry 24
  • Avoid spoil 4 Experience Enhancer Page threeShoppers are easily frustrated and quick to Recommendationsswitch grocers. But instead of telling their You need to:grocers about bad experiences, they warn theirnetworks instead. Seek feedback Customers often do not provide feedback are saying. Apply what you learn to fix issues to grocers because they do not know how in the store. In addition, create incentives for to do so and they do not know if they will customers to provide feedback—you will get be heard. Create a vigorous social media more information and the interaction boosts strategy and listen hard to what customers customer stickiness and brand loyalty. Make returns easy Customers who have had a service failure recovery strategy that includes a catch- resolved quickly and properly are more all return policy and an open culture. By loyal to a company than customers who fostering an ongoing relationship with your have never had a service failure. Develop customers, you will create many customer a comprehensive, well-advertised service advocates. Experience Radar 2013 | US Grocery industry 25
  • Mapping attributesto segments People value different attributes of the consumer experience. One striking similarity weWhat does this mean for found across three of the segments is the appreciation for convenience. Connection with the community is also notable for Experiential Erica1 and Mindful Maria1, who both want eco-how you build customer friendly and local products.experiences? Experiential Erica Traditional Terri Community Community 14 10 Quality 1 Performance and value received Support Convenience/ Accessibility Support Convenience/ Accessibility 13 22 8 12 Support 2 Friendliness and ease of obtaining help Quality 13 Presentation 11 Quality 21 Presentation 17 Convenience 3 Mindful Maria Frugal Fred Anytime, anywhere access Community Community 16 9 Presentation 4 Convenience/ Convenience/ Support Accessibility Support Accessibility Aesthetics, arrangement of offer 13 19 10 15 Community 5 Customer’s personal brand and Quality 15 Presentation 11 Quality Presentation 9 9 connections with others 1 Links to 2013 Grocery Experience Radar segments of Experiential Erica (high-income and health-conscious parent), Mindful Maria (young, urban, eco-conscious convenience seeker), Traditional Terri (retiree, conservative and consistent shopper) and Frugal Fred (middle-aged, low to mid income, and deal seeker). Experience Radar 2013 | US Grocery industry 26
  • Empower customers to 5 Experience Enhancermake satisfying choices Page oneCustomers are inundated with product information Knowledge may be power, but it can also paralyze.and ways to learn about the best products for them. Customers have innumerable ways to learn about new products.They are looking for ways to make their shopping Conduct product researchdecisions easier. Research grocery • labels products on own • online posts20% instead of asking 70% employees or other • websites customers • blogs A new blog launches every half a second.1 That’s one reason why shoppers are coming into stores better prepared than ever before—but also floundering in a flood of data about products that may be right for them.rank product selection as a top Customers want a lot of choices, but choice can also immobilize.purchase driver Vast product selection = Top 3 purchase driver “I always choose the grocery store with the largest selection of products.” Customers need help navigating the choices provided 1 CNET News. Uprise of Blogging. 2010. Experience Radar 2013 | US Grocery industry 27
  • Empower customers to 5 Experience Enhancermake satisfying choices Page twoCustomers are inundated with product information Product claims, such as gluten free or 100% natural, can alleviate choice paralysis.and ways to learn about the best products for them. Overall, 1 in 3 customers want labels that clearly call out healthy products.They are looking for ways to make their shopping Specific segments crave healthy product labels even more:decisions easier. 1 in 21 in 3 Mindful Maria1 Want healthy product labels eart Experiential Erica1 ealthy 2 in 5 Emotional Trial of new interest productscustomers want product labels The unfamiliar feels risky—so shoppers tend to stick “Offers free samples of new with the products they know. In-store food tastings products that influence my encourage customers to try new products and add purchases.” emotional interest to grocery trips. Free in-store food tastings drive 44% of impulse purchases. “Let me open any product “I tried a free sample and in the store to sample.” had to buy for my family.” 1 Links to 2013 Grocery Experience Radar segments of Experiential Erica (high-income and health-conscious parent), Mindful Maria (young, urban, eco-conscious convenience seeker), Traditional Terri (retiree, conservative and consistent shopper) and Frugal Fred (middle-aged, low to mid income, and deal seeker). Experience Radar 2013 | US Grocery industry 28
  • Empower customers to 5 Experience Enhancermake satisfying choices Page threeCustomers are inundated with product information Recommendationsand ways to learn about the best products for them. You need to:They are looking for ways to make their shoppingdecisions easier. Direct, not overwhelm Limitless options overwhelm customers, quickly, easily and with confidence. Labels causing purchase paralysis. Invest in a that clearly identify the best selections for labeling strategy to help customers cut a customer speed up decision making and through the clutter of product information make shopping more enjoyable. to make informed decisions about food Become the go-to source Shoppers turn to third parties—like blogs, samples and general advice. Create both magazines and articles—to learn about physical and digital “hubs” of information. new products rather than to their grocer. By giving needed information, you will Establish yourself as a trusted advisor by create stronger relationships with your offering recipes, nutrition tips, new product customers. Offer a little, gain a lot. Customers are risk averse, and they are after sampling. Just as important, enjoying weary of trying new things. Mitigate the free samples adds to the positive emotions risk by offering free samples to encourage customers feel in the store. Let customers experimentation. You will find that try out new products and return them if they customers are more likely to purchase aren’t satisfied. Experience Radar 2013 | US Grocery industry 29
  • Create a positive moment of truth and you will have loyal customers.Moments of truth 32%Powerful events in the The words used most often by those describing a positive moment of truthlives of consumers thatoften define their opinion Percentage of respondentsof a grocer who attribute positive MOTs to friendly, helpful staff On the flip slide, create a negative moment of truth and you have a brand detractor. 38% The words used most often by those describing a negative moment of truth Percentage of respondents who attribute negative MOTs to unhelpful staff1 1 Word clouds derived from 2013 Grocery Experience Radar survey data. Experience Radar 2013 | US Grocery industry 30
  • More aboutour methodology This year’s Experience Radar study of experiential features and the value and measures the experiences of about 6,000 willingness to pay consumers place on each US consumers across multiple industries.1 feature. It also probes into other areas such PwC conducted on-line field work from May as purchase behavior, moments of truth through July 2012. The study was designed (MOT), and word-of-mouth marketing to uncover experience “recipes,” pricing within each industry. The study combines options and linkages to customer loyalty. and assesses these data elements to create a set of experience-based insights and a We probe into the consumer responses segmentation schema for each industry. through the lens of “experience attributes.” These attributes include: Our methodology employs a conjoint survey technique to pinpoint insights. Other, more • Quality—Performance and value traditional customer experience studies received typically do not tie to “hard economics” like • Support—Friendliness and ease of value measures, price elasticity and churn obtaining help metrics. Experience Radar does. • Convenience—Anytime, anywhere access While the results outlined in this report are • Presentation—Aesthetics, arrangement at the industry level, PwC can use the same of offer methodology to develop an Experience • Community—Customers’ personal brand Radar study that is customized to your and connection with others. business and identifies business accelerators. By using adaptive choice-based conjoint analysis, Experience Radar reveals customer trade-offs between different sets 1 Retail Banking, B2B Software, Media & Communications, Grocery, Airlines, Pharmaceuticals and Home Services. Experience Radar 2013 | US Grocery industry 31
  • AppendixThe different segments Experience Radar 2013 | US Grocery industry 32
  • Experiential hereSeeker name Erica 1 Experience EnhancerWho is this segment? How does this segment How much do they share feedback grocery shop? on experiences?• Most affluent and educated segment • Wants a premium experience across the • Most likely to spread the word among• Nearing or in retirement spectrum—from knowledgeable employ- family and friends when she finds a great ees to wide product selections grocer• Places a high value on experience • Happy to switch to grocers that go the • Most likely to share good experiences for extra mile years to come • Enjoys interacting with staff as she moves around the store How to serve them? • Offer a wide range of specialty products • Selects specialized products 2x more than other segments • Train staff to be extra courteous and le- verage her good word-of-mouth to attract • Considers product depth when deciding new customers with similar preferences where to shop and behaviors Experience Radar 2013 | US Grocery industry 33
  • Experiential Erica 1 Experience Enhancer Experience Impact Indicator Scores1 Key 2: Very high High Moderate Low Very low Demographics Top grocery preference Channel usage Age 45-64 yrs Attendant checkout 64% Learn about Do it myself 69% products Annual $150K+ Organic and locally 71% Help from company 13% household sourced products income Buy Do it myself 34% Recyclable materials 76% products Employment Not employed packaging Help from company 59% status Resolve Do it myself 9% Residence Owns house issues Help from company 65% Urbanicity Small town or rural area Marital status Married Top grocery experience themes Minority 19% presence Helpful and courte- 32% ous staff Staff product knowl- 12% edge Attractive pricing 11% Grocery usage Average spend $5oo+ Interaction with grocer Every day 1 Indicator Scores between 0 to 100 and include respondent’s repurchase propensity, recommendation propensity, network size and network conversion probability. 2 Color coding based on index percent of specific segment compared to other segments. Experience Radar 2013 | US Grocery industry 34
  • Traditional Terri 2 Experience EnhancerWho is this segment? How does this segment How much do they share feedback grocery shop? on experiences?• Oldest segment, with many retired and living with their spouses in the suburbs • Enjoys simple, convenient ways of • 4 out of 5 share good experiences with shopping as well as traditional brands friends and family• A traditionalist who does not care for digital or specialty frills • Is twice as likely as other segments to • Close to 70% stop sharing memorable want traditional products over local experiences after a month and organic and regular packaging over compostable and recyclable How to serve them? • Is in no rush for self-checkouts and • Invest in staff to help him while he prefers attendants checks out • Retain traditional products or switch out gradually when new options are introduced Experience Radar 2013 | US Grocery industry 35
  • Traditional Terri 2 Experience Enhancer Experience Impact Indicator Scores1 Key 2: Very high High Moderate Low Very low Demographics Top grocery preferences Channel usage Age 65+ yrs Attendant checkout 72% Learn about Do it myself 63% products Annual $75-100K Conventional 95% Help from company 16% household products income Buy Do it myself 29% Standard materials 78% products Employment Retired packaging Help from company 67% status Resolve Do it myself 10% Residence Owns house issues Help from company 63% Urbanicity Small town or rural area Marital status Separated Minority 23% Top grocery experience presence themes Helpful and courte- 30% ous staff Attractive pricing 22% Staff product knowl- 13% edge Grocery usage Average spend $500+ Interaction with grocer At least every week 1 Indicator Scores between 0 to 100 and include respondent’s repurchase propensity, recommendation propensity, network size and network conversion probability. 2 Color coding based on index percent of specific segment compared to other segments. Experience Radar 2013 | US Grocery industry 36
  • Mindful Maria 3 Experience EnhancerWho is this segment? How does this segment How much do they share feedback grocery shop? on experiences?• Youngest segment with many single urbanites • Values ordering online, preplanned meals • Most likely to broadcast bad experience• On the go and mobile applications for checkout and across her networks coupons• Wants grocery shopping to fit easily into her • Uses both online and offline channels busy schedule • Prefers self-checkout• Values friendliness • Values recyclable packaging How to serve them? • Provide conveniences to make her life • Wants locally sourced, organic products easier and healthier that are clearly labeled • Ensure your range of products includes organic produce as well as meal planning and delivery services Experience Radar 2013 | US Grocery industry 37
  • Mindful Maria 3 Experience Enhancer Experience Impact Indicator Scores1 Key 2: Very high High Moderate Low Very low Demographics Top grocery preferences Channel usage Age 18-24 yrs Self checkout via 53% Learn about Do it myself 70% kiosk products Annual ≤$25K Help from company 13% household Organic and locally 66% income sourced products Buy Do it myself 41% products Employment Student full- Recyclable materials 81% Help from company 55% status time packaging Resolve Do it myself 9% Residence Rents issues Help from company 66% apartment or condo Urbanicity Major metropolitan area Top grocery preference themes Marital status Engaged Minority 44% Helpful and courte- 37% presence ous staff Staff product knowl- 16% edge Attractive pricing 13% Grocery usage Average spend $100-150 Interaction with 1 to 3 grocer times a month 1 Indicator Scores between 0 to 100 and include respondent’s repurchase propensity, recommendation propensity, network size and network conversion probability. 2 Color coding based on index percent of specific segment compared to other segments. Experience Radar 2013 | US Grocery industry 38
  • Frugal Fred 4 Experience EnhancerWho is this segment? How does this segment How much do they share feedback grocery shop? on experiences?• Middle-aged and middle-income • 40% more likely than other segments to • Vocal about his good experiences• Many living with a family in the suburbs trade down to store brands • Even more vocal about bad experiences• Juggles demands of a full house • 3 out of 5 value rewards programs that and most likely to share for years to come offer storewide discounts• Perceives grocery shopping as a chore • Frequents big-box grocers that offer bulk How to serve them? at a discount • Help him feel that his store time is efficiently spent • 40% use self-checkouts • Clearly mark sale items and direct him • Lets price trump everything else to them • Keep checkout kiosks open and quickly moving Experience Radar 2013 | US Grocery industry 39
  • Frugal Fred 4 Experience Enhancer Experience Impact Indicator Scores1 Key 2: Very high High Moderate Low Very low Demographics Top grocery preferences Channel usage Age 45-64 yrs Attendant checkout 75% Learn about Do it myself 73% products Annual $25-35K No meal planning 92% Help from company 10% household income Conventionally- 54% Buy Do it myself 48% sourced products products Employment Employed Help from company 47% status full-time Resolve Do it myself 10% Residence Owns house issues Help from company 66% Urbanicity Small city Marital status Divorced Minority 25% Top grocery preference presence themes Helpful and courte- 32% ous staff Attractive pricing 15% Staff product knowl- 13% edge Grocery usage Average spend $100-150 Interaction with 6 to 11 grocer times a year 1 Indicator Scores between 0 to 100 and include respondent’s repurchase propensity, recommendation propensity, network size and network conversion probability. 2 Color coding based on index percent of specific segment compared to other segments. Experience Radar 2013 | US Grocery industry 40
  • We hope these insightsprove useful to yourbusiness While the results outlined in this report are at the industry level, PwC can use the same methodology we’ve used here to develop a customized Experience Radar study and uncover opportunities to accelerate your business. If you’d like to discuss these findings or how PwC can help you apply them to your business, contact: Paul D’Alessandro 312 298 6810 paul.dalessandro@us.pwc.com Lisa Feigen Dugal 646 471 6916 lisa.feigen.dugal@us.pwc.com Experience Radar 2013 | US Grocery industry 41
  • © 2012 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member firm, and may sometimes refer to the PwC network. Each member firm is a separatelegal entity. Please see www.pwc.com/structure for further details.This content is for general information purposes only, and should not be used as a substitute for consultation with professional advisors. PwC US helps organizations and individuals create the value they’re looking for.We’re a member of the PwC network of firms with 180,000 people in more than 150 countries. We’re committed to deliver quality in assurance, tax and advisory services. Tell us what matters to you and find out moreby visiting us at www.pwc.com/us. LA-13-0064