volume 2
Locating the sources of value behind exceptional customer experiences
December 2012
Experience Radar 2013Lessons from the US Grocery industry
2 Experience Radar 2013 | US Grocery industry
Title of the pageSubtitle hereTitle of the pageSubtitle here Few experiences happen as often or grab
share of wallet and stimulate the senses more than grocery shopping. Expectations are set and reset at an unprecedented pace. Incredibly dynamic, Grocery is a testing ground and also a great learning place for other industries.
Grocery today is increasingly less infl uenced by supply chain and more by design prin-ciples. Think about how many experiential concepts have been borne from the Grocery environment—packaging evolution, impulse buying, immersive interactions and trial enticement, to name a few.
So much of what is important to a customer’s experience (e.g., convenience, presenta-tion and quality) can be found in Grocery. Grocery is the pinnacle of where products, services and environments intertwine. To-day’s shopper is equipped with mobile apps and virtual offers, depends on just the right blend of self-service and helpful staff, and is increasingly immersed in an environment that behaves more like a restaurant than the old corner market.
Given increasing competition, fi ckle custom-ers and slim margins, grocers feel an im-
Experience mattersCustomer expectations are set and reset everywhere today. Business leaders must learn wherever they can.
mense pressure to connect with and earn the loyalty of their customers every day. Having faced commoditization earlier than most industries, Grocery has turned to experience to grow the top line and maintain margins. Other industries would do well to heed the hard lessons learned in Grocery.
Experience Radar helps companies locate two elements critical to pleasing their cus-tomers and growing their business: experi-ence segments and experience enhancers.
• Experience segments are those natu-ral groupings of customers that appear once survey respondents are categorized by the features they value, their demo-graphics and behavioral profi les. They’re who you can build a business around.
• Experience enhancers are those market insights that, when translated into practical actions, can create value for your customers. They’re what you might do to grow your revenue.
Experience Radar points the way to value and profi ts by identifying ways to serve your customers—particularly those seeking an experience that’s second to none.
Best,
Lisa Feigen Dugal PwC US Retail & Consumer Advisory Leader
Paul D’AlessandroPwC US Customer Impact Leader
3 Experience Radar 2013 | US Grocery industry
04 Grocery challenges and opportunities
05 The 5 core attributes of the Grocery customer experience
07 Putting the Grocery customer fi rst—the experience segments
12 Building experiences that customers value—the experience
enhancers
30 About moments of truth
31 More about our methodology
32 Appendix—more on the experience segments
Table of contentsCustomer insights for the US Grocery industry
volume 2
PwC’s Experience Radar helps businesses find the often hidden sources of value that drive exceptional, differentiated 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.
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 experience attributes broken down into industry-specific elements and then ranked by what target segments value most.
Our methodology employs a conjoint survey technique to 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.
While the results outlined in this report are at the industry level, PwC can use this same methodology to develop an Experience Radar that is customized to your business.
1 Retail Banking, B2B Software, Media & Communications, Grocery, Airlines, Pharmaceuticals and Home Services.
4 Experience Radar 2013 | US Grocery industry
Grocery challenges and opportunities
Like all retailers, grocers are focused on their brick-and-mortar footprint, store remodels/renovations and how best to operate in an omnichannel world. And, because everyone
To delight customers through experiences they value, grocers must call on everything —from the newest technologies such as geo-tagged mobile coupons to the cashier’s smile
shops for groceries, these retailers must be ready to cater to a wide range of consumer preferences and demands, all the while balancing the threats identifi ed here.
as he checks out a particularly demanding customer. They should not only accept but relish their role as the retail testing ground for best-in-class customer experiences.
Threats
• Fierce competition from supercenters, dol-lar stores, traditional grocers, local stores, primarily competing on price
• Fluctuation in commodity prices and margin pressure
• Meeting the changing expectations of customers, particularly given rapidly changing demographics
• Determining how to achieve an omnichan-nel customer experience (e.g., how much investment, if any, to make in going online)
Opportunities
• Satisfying customers through value-added service, amenities and offerings
• Broadening acceptance of private label products
• Expansion of loyalty programs to offer special discounts targeted at individual consumers as well as rewards for loyalty
• Being in the right location with the right product mix at the right time
5 Experience Radar 2013 | US Grocery industry
Experience Radar measures the experiences of thousands of consumers
We use our primary conjoint survey technique1 to assign values to these attributes at an industry level
The 5 core attributes of the Grocerycustomer experience
Community 5Customer’s personal brand and connections with others
Friendliness and ease of obtaining help
Anytime, anywhere access
Convenience 3Performance and value received
Presentation 4Aesthetics, arrangement of offer
1 Adaptive Choice-Based Conjoint.
Quality 1 Support 2
6 Experience Radar 2013 | US Grocery industry
Title of the pageSubtitle herePutting the Grocery customer fi rst
Customer experience is an essential differentiator for grocers—and given how often people shop for groceries, grocers have many opportunities to experiment and fi ne tune.
Peel back the onion. Get to the core of what your customer is and values.
Experience Radar can help you: • Build experiences that matter to your customers using
a variety of levers such as presentation, community and human service
• Figure out whom to target and how to market experience-based offerings
• Set yourself apart in an increasingly commoditized industry of low margins
• Connect the dots between consumer experience, customer value and sustainable fi nancial 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.
7 Experience Radar 2013 | US Grocery industry
What is it?This schema uncovers which customers value grocery experiences and what they want.
How’s it different?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 profi les.
2013 experience segmentsExperience Radar’s Grocery customer segmentation
What is its value?This segmentation provides direction on whom to target and how to market experience-based offerings. Use it to complement the work you are already doing with customer segmentation and voice of the customer.
The 4 experience
segmentsExperientialErica
TraditionalTerri
MindfulMaria
FrugalFred1 2 3 4
8 Experience Radar 2013 | US Grocery industry
ExperientialErica
TraditionalTerri
MindfulMaria
FrugalFred
Who is this segment?Most affl uent and educated segment, nearing or in retirement
Oldest segment with many retired and living with their spouses in small suburbs
Youngest segment with many single urbanites
Middle-aged and middle-income segment, many living with a family in the suburbs
What does this segment value?She wants a premium experience across the spectrum—from knowledgeable employees to wide product selections. She is happy to switch to grocers that go the extra mile.
A traditionalist, he doesn’t care for digital or specialty frills. He enjoys simple, conventional ways of shopping as well as conventional brands.
On the go, she wants grocery shopping to fi t easily into her busy schedule. She is eager to save time—she values ordering online, preplanned meals and mobile applications for checkout and coupons.
Juggling a family and demands on his time, he typically shops once a week. He views grocery shopping as a chore, and he lets price trump everything else.
How important for this segment is sharing feedback on experiences?• Most likely to spread
the word among family and friends when she fi nds a great grocer
• Most likely to share good experiences for years to come
• 4 out of 5 share good experiences with friends and family
• Close to 70% stop sharing memorable experiences after a month
• Most likely to broadcast bad experience across her networks
• Uses both online and offl ine channels
• Vocal about his good experiences
• Even more vocal about bad experiences and most likely to share for years to come
Snapshot of Grocery segments
ExperientialErica
TraditionalTerri
MindfulMaria
FrugalFred
1 2 3 4
9 Experience Radar 2013 | US Grocery industry
Comparing the experience segments
FrugalFred4Traditional
Terri2 MindfulMaria3Experiential
Erica1
Which segment has the greatest lifetime value?
How to serve them • Offer a wide range of specialty products.
• Train staff to be extra courteous and leverage her good word-of-mouth to attract new customers with similar preferences and behaviors.
• Invest in staff to help him while he checks out.
• Retain traditional products or switch out gradually when new options are introduced.
• Help him feel that his store time is effi ciently spent.
• Clearly mark sale items and direct him to them.
• Keep checkout kiosks open and quickly moving.
• Provide conve-niences to make her life easier and healthier.
• Ensure your range of products includes organic produce as well as meal planning and delivery services.
Most
Least
10 Experience Radar 2013 | US Grocery industry
Overall, what do customers value in grocery shopping?
High-quality customer experience is a defi ning feature for shoppers at grocery stores. When they can afford it, customers are willing to pay a premium for well-trained and attentive staff who know the store well. Great staff can make shopping trips far more effi cient.
In addition to good service, customers seek a strong emotional reward from their shopping experience. Buying organic food and products with environmentally friendly packaging makes shoppers feel more positive about their choices.
Customer value for top features
This chart ranks features1 based on customer demand and willingness to pay for each feature. The percentages indicate the premium size customers are willing to pay for each feature.
Lower Willingness to pay
Dem
and
Low
er
Higher
Hig
her
2%Shopping options
In-store and online markets
4%
Farm-sourced productsOrganic and locally sourced
10%Loyalty points
Storewide discounts
11% Staff knowledgeStocking personnel throughout the store
14%
CheckoutAttendant checkout
9%Eco-friendly packaging
Recyclable materials
1 Features tested, however not included above, include store type, weekly coupons, product labels, and meal planning.
11 Experience Radar 2013 | US Grocery industry
Comparatively, how do segments value features?
Identify a segment’s demand and willingness to pay for a feature com-pared to the overall population.
Comparative willingness to pay a premium for the feature
This chart compares segments’ demand for individual features1 as well as their willingness to pay for the feature. The percentages indicate the size of the premium that the segment is willing to pay for an enhanced experience with that feature. The size of the bubble indicates the demand for the feature.
Overall populationLess willing More willing
CheckoutAttendant checkout
Loyalty pointsStorewide discounts
Farm-sourced productsOrganic and locally sourced
Shopping optionsIn-store and online markets
Ecofriendly packagingRecyclable materials
Experiential Erica Circle size proportionate to feature demandFrugal FredTraditional Terri
3%
4%
3%
9%
9%
11%
Staff knowledgeStocking personnel throughout store 9% 14%13%
27%24%
20% 28%
23% 30%
Mindful Maria
Compared to the other segments, Experiential Erica1 and Mindful Maria1 are the most willing to pay across key features. Both segments are willing to pay a premium for better-quality farm-sourced products and environmental packaging. And both segments see staff knowledge and support as critical to a good grocery experience.
Traditional Terri1 values customer support along with Experiential Erica and Mindful Maria. As an older customer, however, he wants a more conventional shopping experience from products to packaging.
1 Links to 2013 Grocery Experience Radar segments of Experiential Erica (high-income and health-conscious parent), Mindful Maria (young, urban, eco-conscious conve-nience seeker), Traditional Terri (retiree, conservative and consistent shopper) and Frugal Fred (middle-aged, low to mid income, and deal seeker).
1 Features tested, however not included above, include store type, weekly coupons, product labels, and meal planning.
12 Experience Radar 2013 | US Grocery industry
Title of the pageSubtitle here
5Empower customers to makesatisfying choices
2Emotionalize shopping
1Make it fast
Balance high-techwith high-touch
4Avoid spoil
2013 experience enhancersBuilding (and growing) your business by designing and delivering exceptional customer service
3
The fi ve behaviors that grocers can adopt to enhance customer experience and create value are:
13 Experience Radar 2013 | US Grocery industry
Top infl uencers of purchase
ExperienceEnhancer1
Convenience matters in grocery. And convenience
in grocery means—fi rst and foremost—short
checkout lines. Be sure to remember other factors,
too, such as good location and mobile applications.
Make it fast
We live by the clock. We want to get in and out of grocery stores as quickly as possible so we can get on with our day. This impatience makes convenience
a top infl uencer of purchase when customers are deciding where to shop—and also a top driver of great experiences.
Page one
37% 28% 20% 5% 4%
Price Convenience Product breadth Reward card Reputation
Fast lines matter more than other aspects of convenience
such as location and self-checkouts. Fast checkouts
account for 30% of memorable great experiences.
of customers purchase based on convenience
of customers purchase basedon convenience
28%
ExperienceEnhancer1
14 Experience Radar 2013 | US Grocery industry
1 Stone, Alex. "Why Waiting is Torture," The New York Times. August 2012.
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).
1 in 5 shoppers do not repurchase after a bad experience. And 2 in 5 smartphone users do not return.
Post-visit
Customers want service on-demand and will walk out if they do not get it.
Waiting at a grocer is more frustrating than waiting at doctors’ offi ces and the Department of Motor Vehicles combined.1 Our internal clocks exaggerate how long we wait for service—a 4-minute wait may feel like 20 minutes. And with every tick of our internal clock, the experience degrades.
7x
Convenience matters in grocery. And convenience
in grocery means—fi rst and foremost—short
checkout lines. Be sure to remember other factors,
too, such as good location and mobile applications.
Make it fastPage two
Mindful Maria,2 a member of the digitally plugged-in generation, relies on mobile convenience not only to check out but also to plan what to purchase and eat. Mobile curates her experience.
Pre-visit During
digital meal planningand delivery
7xmobile
couponssmartphone
checkout
1.8x 1.6xmore than others
Mindful Maria wants delivery and meal planning services more than others
7xMindful Maria seeks:
KIOSK KIOSK“Not enough cashiers...I just wanted to be done and go home.”
“Only 2 cashiers open and lines so long that I never went back again to that store.”
1
15 Experience Radar 2013 | US Grocery industry
ExperienceEnhancer
Recommendations
You need to:
Convenience matters in grocery. And convenience
in grocery means—fi rst and foremost—short
checkout lines. Be sure to remember other factors,
too, such as good location and mobile applications.
Make it fast
Be transparent with waiting
Empower customers with information about checkout lines and wait times. Use segment-specifi c channels to inform customers about wait times and best times to shop. Once their
expectations are set, customers are less likely to become irritated or leave with a negative impression of the entire shopping trip.
In a wired-in world, customers value technology-savvy solutions for store checkout. Prioritize and pilot mobile and tablet options—consider, for example,
mobile checkouts and coupons that let shoppers check out on their own via smartphone apps or staff handheld devices.
Boost digital convenience
Make meal planning easyCustomers want options that are kind to their waistlines and to their wallets. Figure out alternatives to restaurant fare that will lure in customers seeking convenience, variety and well-being. One option is to
expand your culinary horizon and invest in a “grocerant”—a mix of grocery and restau-rant ready-to-eat options far more inviting than the traditional deli counter.
Page three
16 Experience Radar 2013 | US Grocery industry
Some hidden truths surfaced in this year’s Experience Radar
The big question: What might this mean for the future of your business?
In-store
Local and organic
Rude
98% of shoppers shop in a physical store.
46% want organic products and will pay a 4% premium for them.
28% of bad memorable experiences resulted from discourteous staff.
is still the preferred way to shop for groceries.
products are valued by 1 in 2 customers.
employees account for almost a third ofbad experiences.
17 Experience Radar 2013 | US Grocery industry
Price is important. But sensory experiences—the thrill of fi nding a good deal and the drama of the presentation—are also key.
Customers often choose what to buy based on how they feel as they shop. Evoking emotions that customers value will keep them coming back.
ExperienceEnhancer2
Emotions are generated by products, services,
and the spaces in which they exist. Create
relationships with customers by evoking positive
emotions based on what they care about.
Emotionalize shoppingPage one
For 2 in 5 customers, price is the top factor in determining where to shop.
Validate these customers’ choice of store. Help them feel good about saving money.
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).
Lives for the bargain rush.Price sways his purchase decisions more than those of any other segment.
10% Premium customers are willing to pay fora storewide discount loyalty program.
“Helped me stay on budget by pointing out coupons and planning my meals.”
Importance of price
20%OFF
IN-STORESAVINGS!
Mindful Maria1
Experiential Erica1
Traditional Terri1
FrugalFred1
11%0%-3%-6%
“They honor other stores’ prices.”
“Saving a ton of money with coupons for things I love.”10%
premium customers are willing to pay for a storewide discount loyalty program
18 Experience Radar 2013 | US Grocery industry
Brands that refl ect customers’ natural and sustainable values reinforce their sense of self.
30% premium Mindful Maria1 will pay for recyclable packaging
“I want the gold standard of food; health is my focus.”
Emotions are generated by products, services,
and the spaces in which they exist. Create
relationships with customers by evoking positive
emotions based on what they care about.
Emotionalize shopping
Experiential Erica1 and Mindful Maria1 receive a strong emotional reward from buying good-for-you products untarnished by artifi cial additives, sweeteners, colorings and preservatives. It is even better when the packaging or sourcing of products support these customers’ values of sustainability and reuse.
The 150% growth rate of farmers’ markets in the past decade2
means that sustainable and healthy practices are here to stay.
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.
Mindful Maria
16% for organic and local
30% for recyclable packaging
Experiential Erica
19% for organic and local
23% for recyclable packaging
Rec
ycla
ble
pac
kag
ing
Organic and local products
Value for natural
Traditional Terri1
Frugal Fred1
ExperienceEnhancer2Page two
19 Experience Radar 2013 | US Grocery industry
Go the extra mile 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 PwC, Retailing 2020: Winning in a Polarized World. PwC Report, 2012.
Emotions are generated by products, services,
and the spaces in which they exist. Create
relationships with customers by evoking positive
emotions based on what they care about.
Emotionalize shopping
Recommendations
You need to:
Personalize loyalty programs
Shoppers will return to stores that offer them consistent deals on products they love. Invest in robust loyalty programs that reward regular customers with discounts and special deals. Analyze customer behavior
and use predictive business intelligence to offer targeted and personalized deals. These programs not only excite customers but also help them develop an emotional attachment to your store.
Organic lifestyles are not a passing trend. Expect this trend to grow exponentially in the coming years. Expand your organic and local offerings to lure the fast-growing number of grocery shoppers who care about where
their groceries come from and how they are transported. Customers like Experiential Erica1 and Mindful Maria1 are willing to pay a premium for the peace of mind that comes from buying organic and local.
Offer organic and local
Go greenCustomers embrace brands that reinforce their lifestyles. With growing awareness of global warming and recycling, customers like Mindful Maria are willing to pay a premium for reusable and sustainable packaging. Invest in sustainable solutions
to bring customers in the door—also keep your bottom line in check. Sustainability reporting and practices have skyrocketed 150% in the last two years and are expected to continue to rise.2
ExperienceEnhancer2Page three
20 Experience Radar 2013 | US Grocery industry
Staff can make or break a shopping experience.
Customers still mostly shop for groceries in person.
They value help from staff—and not just behind the
register anymore.
Balance high-tech with high-touch
1/3 of memorable bad experiences due to staff attitude
Promotions and high-tech gadgets draw customers in, but…
“There was a very long line and only one rude cashier.”
“I hate it when cashier ignores the customer to gossip with friends.”
“I hate having to wander forever to fi nd someone.”
Good experience drivers Bad experience drivers
21% of customers do not repurchase after a bad experience. Rude employees have a permanent impact on business.
48% 32%
Despite the rise of e-commerce, 98% of grocery shopping is done in
store. As the #1 infl uencer, staff quality impacts where
customers shop one-third of the time.
Staff
KIOSK
KIOSK…good experiences with staff all over the store are what keep customers coming back.
ExperienceEnhancer3Page one
21 Experience Radar 2013 | US Grocery industry
Staff can make or break a shopping experience.
Customers still mostly shop for groceries in person.
They value help from staff—and not just behind the
register anymore.
Balance high-tech with high-touch
28% premium Traditional Terri1 is willing to pay for attendant checkout
Different customers value different staff services in the store.
Checkout via phone
At checkout
Checkout via kiosk
Acrossstore
Checkout via attendant
Very specializedknowledge
Feature enhancement
Feature enhancement
Cu
sto
mer
val
ue
Cu
sto
mer
val
ue
Intimidated by new technology, he wants employee help when he checks out.
She wants a boutique experience. She expects staff throughout the store to offer personalized recom-mendations at a moment’s notice.
Want staff help at checkout and are willing to pay a
28% premium
Want staff across store to help select products and are willing to pay a
13% premium
3 out of 4
3 out of 5Experiential Erica1
Traditional Terri1
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).
ExperienceEnhancer3Page two
22 Experience Radar 2013 | US Grocery industry
Staff can make or break a shopping experience.
Customers still mostly shop for groceries in person.
They value help from staff—and not just behind the
register anymore.
Balance high-tech with high-touch
As the number one driver of good and bad experiences, employees must be hired and managed with care. Poorly trained and motivated staff leave customers feeling frustrated and exasperated. Reevaluate your
Although high-tech self-checkouts are essential, ensure they’re not the only option. Customers like Traditional Terri1 feel more at ease with conventional methods and will pay a premium for
Have a clear understanding of your shoppers’ preferences. Customers like Experiential Erica1 want a boutique experience tailored to her needs. Invest in a few on-call specialists who have deep
Invest in employees
Balance automation
Know your customers’ preferences
Recommendations
You need to:
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).
training and benefi ts program to create a front-line staff who create engaging experiences that motivate shoppers to return and employees to stay.
attendant checkout to avoid the technology diffi culties. Many customers also enjoy the friendly banter with and sense of community from engaging attendees on their way out.
product knowledge and can assist these shoppers. Others—like Traditional Terri1—are looking for a neighborhood feel, and would rather have a friendly checkout agent than one with specialized knowledge.
ExperienceEnhancer3Page three
23 Experience Radar 2013 | US Grocery industry
Shoppers are easily frustrated and quick to
switch grocers. But instead of telling their
grocers about bad experiences, they warn their
networks instead.
Avoid spoil
Customer relationships spoil as easily as produce.
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-ences at grocers are all too common.
2/3rds of customers have had bad experiences at a grocer
1 “Grocery Industry Falls Short in Building Customer Loyalty.” MarketingCharts. IBM, 07 Nov. 2011.
“Lines were absurd...never went back.”
“My apples were rotten, didn’t shop there again.”
“They refused to let me return anything.”
“It was so dirty, I left immediately.”
Of those who had a bad experience, half look for better options.
Reported a bad experience
more than
2/3rds 2 in 5 customers looking for better options never return after a bad experience.
ExperienceEnhancer4Page one
24 Experience Radar 2013 | US Grocery industry
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.
2.1x grocery shoppers more likely to never report issues
92%
82%
1 in 3
Percentage who do not report issues
Shoppers are easily frustrated and quick to
switch grocers. But instead of telling their
grocers about bad experiences, they warn their
networks instead.
Avoid spoil
46% of customers do not report issues to their grocer
Grocery
willing to share bad experiences with others
of the online population use social media
share their bad experiences six months or longer
Retail Banking
Media & Communications
46%
24%
21%
With their grocers, customers are quiet. They share less than in any other industry.
With their friends, customers are very talkative.
ExperienceEnhancer4Page two
25 Experience Radar 2013 | US Grocery industry
Shoppers are easily frustrated and quick to
switch grocers. But instead of telling their
grocers about bad experiences, they warn their
networks instead.
Avoid spoil
Recommendations
You need to:
Seek feedback
Make returns easy
Customers often do not provide feedback to grocers because they do not know how to do so and they do not know if they will be heard. Create a vigorous social media strategy and listen hard to what customers
are saying. Apply what you learn to fi x issues in the store. In addition, create incentives for customers to provide feedback—you will get more information and the interaction boosts customer stickiness and brand loyalty.
Customers who have had a service failure resolved quickly and properly are more loyal to a company than customers who have never had a service failure. Develop a comprehensive, well-advertised service
recovery strategy that includes a catch-all return policy and an open culture. By fostering an ongoing relationship with your customers, you will create many customer advocates.
ExperienceEnhancer4Page three
26 Experience Radar 2013 | US Grocery industry
Mapping attributes to segmentsWhat does this mean for how you build customer experiences? Experiential Erica Traditional Terri
Mindful Maria Frugal Fred
People value different attributes of the consumer experience. One striking similarity we 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-friendly and local products.
Community 5Customer’s personal brand and connections with others
Support 2Friendliness and ease of obtaining help
Convenience 3Anytime, anywhere access
Quality 1Performance and value received
Presentation 4Aesthetics, arrangement of offer
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).
Community14
Support13
Quality13
Presentation11
Convenience/Accessibility
22
Community10
Support8
Convenience/Accessibility
12
Quality21
Presentation17
Community16
Support13
Quality15
Convenience/Accessibility
19
Presentation11
Presentation9
Community9
Support10
Quality9
Convenience/Accessibility
15
27 Experience Radar 2013 | US Grocery industry
Customers are inundated with product information
and ways to learn about the best products for them.
They are looking for ways to make their shopping
decisions easier.
Empower customers to make satisfying choices
20% rank product selection as a top purchase driver
Knowledge may be power, but it can also paralyze.
Customers have innumerable ways to learn about new products.
Customers want a lot of choices, but choice can also immobilize.
70%
• labels
• online posts
• websites
• blogs
Research grocery products on own instead of asking employees or other customers
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 fl oundering in a fl ood of data about products that may be right for them.
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
Conduct product research
1 CNET News. Uprise of Blogging. 2010.
ExperienceEnhancer5Page one
28 Experience Radar 2013 | US Grocery industry
Product claims, such as gluten free or 100% natural, can alleviate choice paralysis.
Overall, 1 in 3 customers want labels that clearly call out healthy products. Specifi c segments crave healthy product labels even more:
Customers are inundated with product information
and ways to learn about the best products for them.
They are looking for ways to make their shopping
decisions easier.
Empower customers to make satisfying choices
1 in 3 customers want product labels
1 in 2
2 in 5
Want healthy product labels
Mindful Maria1
Experiential Erica1
The unfamiliar feels risky—so shoppers tend to stick with the products they know. In-store food tastings encourage customers to try new products and add emotional interest to grocery trips.
Free in-store food tastings drive 44% of impulse purchases.
“Let me open any product in the store to sample.”
“I tried a free sample and had to buy for my family.”
“Offers free samples of new products that infl uence my
purchases.”
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).
Emotional interest
Trial of new products
eartealthy
ExperienceEnhancer5Page two
29 Experience Radar 2013 | US Grocery industry
Customers are inundated with product information
and ways to learn about the best products for them.
They are looking for ways to make their shopping
decisions easier.
Empower customers to make satisfying choices
Limitless options overwhelm customers, causing purchase paralysis. Invest in a labeling strategy to help customers cut through the clutter of product information to make informed decisions about food
quickly, easily and with confi dence. Labels that clearly identify the best selections for a customer speed up decision making and make shopping more enjoyable.
Shoppers turn to third parties—like blogs, magazines and articles—to learn about new products rather than to their grocer. Establish yourself as a trusted advisor by offering recipes, nutrition tips, new product
samples and general advice. Create both physical and digital “hubs” of information. By giving needed information, you will create stronger relationships with your customers.
Customers are risk averse, and they are weary of trying new things. Mitigate the risk by offering free samples to encourage experimentation. You will fi nd that customers are more likely to purchase
after sampling. Just as important, enjoying free samples adds to the positive emotions customers feel in the store. Let customers try out new products and return them if they aren’t satisfi ed.
Direct, not overwhelm
Become the go-to source
Offer a little, gain a lot.
Recommendations
You need to:
ExperienceEnhancer5Page three
30 Experience Radar 2013 | US Grocery industry
Percentage of respondents who attribute positive
MOTs to friendly, helpful staff
32%
Create a positive moment of truth and you will have loyal customers.
On the fl ip slide, create a negative moment of truth and you have a brand detractor.
The words used most often by those describing a positive moment of truth
The words used most often by those describing a negative moment of truth
Percentage of respondents who attribute negative MOTs to unhelpful staff1
38%
1 Word clouds derived from 2013 Grocery Experience Radar survey data.
Moments of truthPowerful events in the lives of consumers that often defi ne their opinion of a grocer
31 Experience Radar 2013 | US Grocery industry
This year’s Experience Radar study measures the experiences of about 6,000 US consumers across multiple industries.1 PwC conducted on-line fi eld work from May through July 2012. The study was designed to uncover experience “recipes,” pricing options and linkages to customer loyalty.
We probe into the consumer responses through the lens of “experience attributes.” These attributes include:
• Quality—Performance and value received
• Support—Friendliness and ease of obtaining help
• Convenience—Anytime, anywhere access
• Presentation—Aesthetics, arrangement of offer
• Community—Customers’ personal brand and connection with others.
By using adaptive choice-based conjoint analysis, Experience Radar reveals customer trade-offs between different sets
More about our methodology
of experiential features and the value and willingness to pay consumers place on each feature. It also probes into other areas such as purchase behavior, moments of truth (MOT), and word-of-mouth marketing within each industry. The study combines and assesses these data elements to create a set of experience-based insights and a segmentation schema for each industry.
Our methodology employs a conjoint survey technique to pinpoint insights. Other, more traditional customer experience studies typically do not tie to “hard economics” like value measures, price elasticity and churn metrics. Experience Radar does.
While the results outlined in this report are at the industry level, PwC can use the same methodology to develop an Experience Radar study that is customized to your business and identifi es business accelerators.
1 Retail Banking, B2B Software, Media & Communications, Grocery, Airlines, Pharmaceuticals and Home Services.
32 Experience Radar 2013 | US Grocery industry
AppendixThe different segments
33 Experience Radar 2013 | US Grocery industry
Seeker name here ExperienceEnhancer1
33
Seeker name hereExperiential Erica
How does this segment grocery shop?
• Wants a premium experience across the spectrum—from knowledgeable employ-ees to wide product selections
• Happy to switch to grocers that go the extra mile
• Enjoys interacting with staff as she moves around the store
• Selects specialized products 2x more than other segments
• Considers product depth when deciding where to shop
How much do they share feedback on experiences?
• Most likely to spread the word among family and friends when she fi nds a great grocer
• Most likely to share good experiences for years to come
How to serve them?• Offer a wide range of specialty products
• Train staff to be extra courteous and le-verage her good word-of-mouth to attract new customers with similar preferences and behaviors
Who is this segment?
• Most affl uent and educated segment
• Nearing or in retirement
• Places a high value on experience
34 Experience Radar 2013 | US Grocery industry
ExperienceEnhancer1
1 Color coding based on index percent of specifi c segment compared to other segments.
Demographics
Grocery usage
Top grocery preference
Top grocery experiencethemes
Channel usage
Age 45-64 yrs
Annual household income
$150K+
Employment status
Not employed
Residence Owns house
Urbanicity Small town or rural area
Marital status Married
Minority presence
19%
Attendant checkout 64%
Organic and locally sourced products
71%
Recyclable materials packaging
76%
Helpful and courte-ous staff
32%
Staff product knowl-edge
12%
Attractive pricing 11%
Average spend $5oo+ Interaction with grocer Every day
Learn about products
Do it myself 69%
Help from company 13%
Buy products
Do it myself 34%
Help from company 59%
Resolve issues
Do it myself 9%
Help from company 65%
Experiential Erica
Key1: Very high High Moderate Low Very low
35 Experience Radar 2013 | US Grocery industry
Traditional Terri
How does this segment grocery shop?
• Enjoys simple, convenient ways of shopping as well as traditional brands
• Is twice as likely as other segments to want traditional products over local and organic and regular packaging over compostable and recyclable
• Is in no rush for self-checkouts and prefers attendants
How much do they share feedback on experiences?
• 4 out of 5 share good experiences with friends and family
• Close to 70% stop sharing memorable experiences after a month
How to serve them?• Invest in staff to help him while he
checks out
• Retain traditional products or switch out gradually when new options are introduced
Who is this segment?
• Oldest segment, with many retired and living with their spouses in the suburbs
• A traditionalist who does not care for digital or specialty frills
ExperienceEnhancer2
36 Experience Radar 2013 | US Grocery industry
Traditional Terri
Demographics
Grocery usage
Top grocery preferences
Top grocery experiencethemes
Channel usage
Age 65+ yrs
Annual household income
$75-100K
Employment status
Retired
Residence Owns house
Urbanicity Small town or rural area
Marital status Separated
Minority presence
23%
Attendant checkout 72%
Conventional products
95%
Standard materials packaging
78%
Helpful and courte-ous staff
30%
Attractive pricing 22%
Staff product knowl-edge
13%
Average spend $500+ Interaction with grocer At least every week
Learn about products
Do it myself 63%
Help from company 16%
Buy products
Do it myself 29%
Help from company 67%
Resolve issues
Do it myself 10%
Help from company 63%
Key1: Very high High Moderate Low Very low
1 Color coding based on index percent of specifi c segment compared to other segments.
ExperienceEnhancer2
37 Experience Radar 2013 | US Grocery industry
Mindful Maria
How does this segment grocery shop?
• Values ordering online, preplanned meals and mobile applications for checkout and coupons
• Prefers self-checkout
• Values recyclable packaging
• Wants locally sourced, organic products that are clearly labeled
How much do they share feedback on experiences?
• Most likely to broadcast bad experience across her networks
• Uses both online and offl ine channels
How to serve them?• Provide conveniences to make her life
easier and healthier
• Ensure your range of products includes organic produce as well as meal planning and delivery services
Who is this segment?
• Youngest segment with many single urbanites
• On the go
• Wants grocery shopping to fi t easily into her busy schedule
• Values friendliness
ExperienceEnhancer3
38 Experience Radar 2013 | US Grocery industry
3 ExperienceEnhancerMindful Maria
Demographics
Grocery usage
Top grocery preferences
Top grocery preferencethemes
Channel usage
Age 18-24 yrs
Annual household income
≤$25K
Employment status
Student full-time
Residence Rents apartment or condo
Urbanicity Major metropolitan area
Marital status Engaged
Minority presence
44%
Self checkout via kiosk
53%
Organic and locally sourced products
66%
Recyclable materials packaging
81%
Helpful and courte-ous staff
37%
Staff product knowl-edge
16%
Attractive pricing 13%
Average spend $100-150 Interaction with grocer
1 to 3 times a month
Learn about products
Do it myself 70%
Help from company 13%
Buy products
Do it myself 41%
Help from company 55%
Resolve issues
Do it myself 9%
Help from company 66%
1 Color coding based on index percent of specifi c segment compared to other segments.
Key1: Very high High Moderate Low Very low
39 Experience Radar 2013 | US Grocery industry
Frugal Fred
How does this segment grocery shop?
• 40% more likely than other segments to trade down to store brands
• 3 out of 5 value rewards programs that offer storewide discounts
• Frequents big-box grocers that offer bulk at a discount
• 40% use self-checkouts
• Lets price trump everything else
How much do they share feedback on experiences?
• Vocal about his good experiences
• Even more vocal about bad experiences and most likely to share for years to come
How to serve them?• Help him feel that his store time is
effi ciently spent
• Clearly mark sale items and direct him to them
• Keep checkout kiosks open and quickly moving
Who is this segment?
• Middle-aged and middle-income
• Many living with a family in the suburbs
• Juggles demands of a full house
• Perceives grocery shopping as a chore
ExperienceEnhancer4
40 Experience Radar 2013 | US Grocery industry
4 ExperienceEnhancerFrugal Fred
Demographics
Grocery usage
Top grocery preferences
Top grocery preferencethemes
Channel usage
Age 45-64 yrs
Annual household income
$25-35K
Employment status
Employed full-time
Residence Owns house
Urbanicity Small city
Marital status Divorced
Minority presence
25%
Attendant checkout 75%
No meal planning 92%
Conventionally-sourced products
54%
Helpful and courte-ous staff
32%
Attractive pricing 15%
Staff product knowl-edge
13%
Average spend $100-150 Interaction with grocer
6 to 11 times a year
Learn about products
Do it myself 73%
Help from company 10%
Buy products
Do it myself 48%
Help from company 47%
Resolve issues
Do it myself 10%
Help from company 66%
1 Color coding based on index percent of specifi c segment compared to other segments.
Key1: Very high High Moderate Low Very low
41 Experience Radar 2013 | US Grocery industry
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 fi ndings or how PwC can help you apply them to your business, contact:
Paul D’Alessandro312 298 [email protected]
Lisa Feigen Dugal646 471 [email protected]
We hope these insights prove useful to your business
© 2012 PricewaterhouseCoopers LLP, a Delaware limited liability partnership. All rights reserved. PwC refers to the US member fi rm, and may sometimes refer to the PwC network. Each member fi rm 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 fi rms 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 fi nd out more by visiting us at www.pwc.com/us. LA-13-0064