Experience Radar 2013: Lessons from the US grocery industry

Experience
Radar 2013
Lessons from the US Grocery industry

Locating the sources
of value behind
exceptional customer
experiences

December 2012

volume 2

Experience matters
Title of the page
Subtitle here
Customer 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. Having
and 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 experience
Business 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 the
wherever 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 2
for the US Grocery
industry
PwC’s Experience Radar helps businesses find the often 04 Grocery challenges and opportunities
hidden sources of value that drive exceptional, differentiated
customer experience.
05 The 5 core attributes of the Grocery customer experience
By helping grocers rank their product and service features,
Experience Radar locates opportunities to create value and
thereby bolster top-line growth and bottom-line results.
07 Putting the Grocery customer ﬁrst—the experience segments
This year’s series of studies measures the experiences of
about 6,000 US consumers across multiple industries.1 The
Experience Radar assigns value to a broad set of customer
12 Building experiences that customers value—the experience
experience attributes broken down into industry-specific enhancers
elements and then ranked by what target segments value most.

Our methodology employs a conjoint survey technique to
30 About moments of truth
reveal insights that can be honed to improve precision. Other,
more traditional customer experience studies typically do not
tie to “hard economics” like value measures, price elasticity
and churn metrics. Experience Radar does.
31 More about our methodology

While the results outlined in this report are at the industry
level, PwC can use this same methodology to develop an 32 Appendix—more on the experience segments
Experience Radar that is customized to your business.

1 Retail Banking, B2B Software, Media & Communications, Grocery, Airlines,
Pharmaceuticals and Home Services.


Grocery challenges and
opportunities

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
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
others

1 Adaptive Choice-Based Conjoint.


Title of the page
Putting the Grocery
Subtitle here rst
customer fi
Customer 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 and
groceries, grocers have many opportunities to
human service
experiment 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 offerings

customer 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.


2013 experience segments
Experience Radar’s What is it?
This schema uncovers which customers
What is its value?
This segmentation provides direction on
Grocery customer value grocery experiences and what
they want.
whom to target and how to market
experience-based offerings. Use it to
segmentation 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 Fred
segments


Snapshot of Grocery
segments
Experiential Traditional Mindful Frugal

Who is this segment?
Experiential Traditional Most affluent and Oldest segment with Youngest segment with Middle-aged and
Erica 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 for
Mindful 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


Comparing the
experience segments Most

Which segment has the
greatest lifetime value?

Least

Experiential Traditional Mindful Frugal

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.


Overall, what do
customers value in
grocery shopping?
Customer value for top features

Higher
14%
Checkout
Attendant checkout

4%

Demand
High-quality customer experience is a deﬁning Farm-sourced products
feature for shoppers at grocery stores. When Organic and locally sourced 9%
Staff knowledge
2% 11% Stocking personnel
they can afford it, customers are willing to pay Eco-friendly packaging
Recyclable materials throughout the store
a premium for well-trained and attentive staff Shopping options
In-store and 10%
online markets
who know the store well. Great staff can make Loyalty points
Storewide discounts
shopping trips far more efﬁcient.

In addition to good service, customers seek a Lower
Lower Willingness to pay Higher
strong emotional reward from their shopping
experience. Buying organic food and products
This chart ranks features1 based on customer demand and willingness to pay
with environmentally friendly packaging makes for each feature. The percentages indicate the premium size customers are willing
shoppers 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.


Comparatively, how do
segments 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 feature
Erica1 and Mindful Maria1 are the most willing to Less willing Overall population More willing

pay across key features. Both segments are willing Ecofriendly packaging
Recyclable materials
to pay a premium for better-quality farm-sourced 23% 30%
products and environmental packaging. And both Shopping options
In-store and online markets
segments 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 sourced
an older customer, however, he wants a more 24% 27%
9%
conventional shopping experience from products Loyalty points
Storewide discounts
to 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 their
1 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.


Title of the page
2013 experience
enhancers
Subtitle here
Building (and growing)
The ﬁve behaviors that grocers can adopt to enhance customer
your business by designing experience and create value are:

and delivering exceptional
customer 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


Make it fast 1 Experience
Enhancer
Page one

Convenience 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 customers
in grocery means—first and foremost—short
as quickly as possible so we can get on with are deciding where to shop—and also a top
checkout 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 Reputation

28%
of customers purchase based
37% 28% 20% 5% 4%

of customers purchase based on convenience
Fast lines matter more than other aspects of convenience

on convenience such as location and self-checkouts. Fast checkouts
account for 30% of memorable great experiences.


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 7x
1 Stone, Alex. "Why Waiting is Torture," The New York Times. August 2012.
more than others
2 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

Enhancer
Page three

Convenience matters in grocery. And convenience Recommendations
in 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


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 by
The big question: organic 1 in 2 customers.
46% want organic products and will
pay a 4% premium for them.

What might this mean
for the future of your Rude employees account for
business? almost a third of
bad experiences.
28% of bad memorable experiences
resulted from discourteous staff.


Emotionalize shopping 2 Experience
Enhancer
Page one

Emotions 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. Evoking
relationships with customers by evoking positive emotions that customers value will keep them coming back.

2 5
emotions 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 willing
to 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).


Enhancer
Page two

Emotions 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 gold
relationships with customers by evoking positive standard of food;
of farmers’ markets in the past decade2
emotions 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 local
premium Mindful Maria1 will 30% for recyclable
Recyclable packaging packaging
pay for recyclable packaging Experiential Erica
19% for organic and local
Traditional Terri1 23% for recyclable
Frugal Fred1 packaging

Organic and local products

2 US Department of Agriculture, August 2012.


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 also

Go the
reward regular customers with discounts and help them develop an emotional attachment
special deals. Analyze customer behavior to your store.

organic local
extra
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 Experiential

mile
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 skyrocketed
1 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 solutions
2 PwC, Retailing 2020: Winning in a Polarized World. PwC Report, 2012.

Balance high-tech with 3 Experience
Enhancer

high-touch Page one

Staff 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 over
register 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 drivers

of memorable bad
48% 32%
experiences due to
staff 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.”


Enhancer

high-touch Page two

Staff 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 4
register anymore. Traditional Terri1
Checkout
via attendant out of
Want staff help at

Customer value
28%
Checkout checkout and are
via kiosk
willing to pay a

28% premium
Checkout
via phone
Feature enhancement

premium 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



Enhancer

high-touch Page three

Staff can make or break a shopping experience. Recommendations
Customers still mostly shop for groceries in person. You need to:

They value help from staff—and not just behind the
register 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.



Avoid spoil 4 Experience
Enhancer
Page one

Shoppers 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 bad
experiences 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.


Enhancer
Page two

Shoppers 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 their
grocers about bad experiences, they warn their With their grocers, customers are quiet. They share less than
networks instead. in any other industry.

Percentage who do not report issues

2.1x

46%
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 others
issues to their grocer

82% of the online population
use social media

1 3 in
share their bad experiences
six months or longer


Enhancer
Page three

Shoppers are easily frustrated and quick to Recommendations
switch grocers. But instead of telling their You need to:

grocers about bad experiences, they warn their
networks 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.


Mapping attributes
to segments
People value different attributes of the consumer experience. One striking similarity we
What 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


Empower customers to 5 Experience
Enhancer

make satisfying choices Page one

Customers 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 research
decisions easier.
Research grocery • labels
products on own • online posts

20%
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.


Enhancer

make satisfying choices Page two

Customers 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 2

1 in 3
Mindful Maria1 Want healthy
product labels
eart
Experiential Erica1 ealthy

2 in 5
Emotional Trial of new
interest products

customers 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.”



Enhancer

make satisfying choices Page three

Customers are inundated with product information Recommendations
and ways to learn about the best products for them. You need to:

They are looking for ways to make their shopping
decisions 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.


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 truth
lives of consumers that
often deﬁne their opinion Percentage of respondents
of 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.


More about
our 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.


Appendix
The different segments


Experiential here
Seeker name Erica 1 Experience
Enhancer

Who 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


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.


Traditional Terri 2 Experience
Enhancer

• 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


Traditional Terri 2 Experience
Enhancer


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%
Urbanicity Small town or
rural area
Marital status Separated
Minority 23% Top grocery experience
presence themes

Helpful and courte- 30%
ous staff
edge

Grocery usage

Average spend $500+ Interaction with grocer At least
every
week



Mindful Maria 3 Experience
Enhancer

• 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


Mindful Maria 3 Experience
Enhancer



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
apartment or
condo
Urbanicity Major
metropolitan
area Top grocery preference
themes
Marital status Engaged
Minority 44% Helpful and courte- 37%
presence ous staff
edge

Grocery usage

Average spend $100-150 Interaction with 1 to 3
grocer times a
month



Frugal Fred 4 Experience
Enhancer

• 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


Frugal Fred 4 Experience
Enhancer



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%
Urbanicity Small city
Marital status Divorced
Minority 25% Top grocery preference
presence themes

Helpful and courte- 32%
ous staff
edge

Grocery usage

Average spend $100-150 Interaction with 6 to 11
grocer times a
year



We hope these insights
prove useful to your
business
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


© 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 separate
legal 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 more
by visiting us at www.pwc.com/us. LA-13-0064

Experience Radar 2013: Lessons from the US grocery industry

More Related Content

What's hot

Viewers also liked

Similar to Experience Radar 2013: Lessons from the US grocery industry

More from Sertus, LLC

Recently uploaded

Experience Radar 2013: Lessons from the US grocery industry