Helping Retailers Navigate the Holiday Season

Consumers are looking for ways to stretch their dollars and still get everything they need for their holiday celebrations. With inflation creating obstacles for shoppers, Grocers can help meet high customer expectations by anticipating their needs and focusing on delivering quality products.


Strategies for a profitable holiday season

What if there was a way to increase profitability and maintain customer loyalty this holiday season despite the negative impacts of inflation? As grocery retailers are in the middle of back-to-back seasonal celebrations, shoppers are adjusting and planning their budgets around the increased cost of groceries. 73% of consumers have switched to lower-priced brands due to rising prices. If grocery retailers want to receive the gift of profitability this holiday season, they must focus on the current budgets of shoppers and invest extra effort in their customer service.

The cautious consumer is a result of widespread concerns regarding inflation. The Food Industry Association reported that 45% of surveyed shoppers are more concerned about affording holiday meals versus other expenses like traveling. As the new year approaches, customers are actively searching for ways to stretch their dollars and grocers can address these conservative shopping behaviors by promoting their private labels. With 17.4% of grocery sales belonging to private labels, consumers are turning to cost-effective brands as higher grocery prices continue to impact the wallet. Promoting private brands front and center will enhance the visibility of available substitutes and increase the overall convenience within the shopping experience in-store and online. Having an e-commerce solution that allows grocers to personalize what products are given top-of-list visibility will make consumers feel that their needs are being met.

The ability for a customer to easily find and search for their desired products online increases overall profitability. Intuitive recommendation engines can deliver this value. Research gathered by Halla, a tech company specializing in AI, found that recommendation engines that effectively work with real-time data can increase the average order value (AOV) by 5% – 15%. For products not visible in the recommendation bar, an intellectual search bar can assist with locating items. Powerful search functionality includes; a type-ahead feature, subcategory recommendations, and the capability to search for multiple items simultaneously. 12% of shoppers will switch to a competitor if they feel that the search results are irrelevant. Additionally, 91% of shoppers are likely to make repeat purchases if they believe that their needs were accommodated. If you want your business to provide for shoppers’ holiday festivities, implementing a solution with premiere search capabilities is necessary.

In the current economic climate, consumers are buying fewer items but spending the same. One notable shift in digital grocery is the rate at which consumers utilize third-party delivery services. Third-party sales dropped by 1.8% heading into the 2022 holiday season, while digital grocery sales increased by 12.4% month-over-month. The convenience of online grocery shopping is still valuable among consumers. In an effort to adjust spending, shoppers are opting out of delivery services and choosing to pick up their orders. This upward trend of utilizing digital platforms for minor conveniences to save costs will only normalize more as price increases continue. As a result, grocery retailers would benefit from not only providing affordable product options but by creating positive online shopping experiences.

Consumers now expect more in terms of service and digital shopping experience from grocers. Grocery shoppers that went through negative e-commerce experiences are 3.4 times more likely to switch services/brands. The focus on elevating the shopping experience is crucial for maintaining brand loyalty, especially during the holidays when the influx of demand can cause retailers to overlook aspects of the shopper’s journey. So, how can grocers gracefully meet these high consumer expectations during this festive time of year? To name two focuses, addressing out-of-stock items and product quality can help improve the e-commerce shopping experience.

Consumers want to know that the products they intend to purchase are going to be available at the time they add to their cart. 5.9% of total grocery retail sales in North America are lost due to unavailable products. Investing in e-commerce solutions that provide visibility and insight into what is moving off the shelves can help grocers better understand what substitutes and items they will need during the holidays. Always having the specific item a consumer wants is not always feasible, but anticipating the best alternatives can be the difference between maintaining loyalty and breaking a connection.

If a grocery retailer is looking for a way to get the industry advantage this holiday season, catering to the consumers looking for high-quality products at affordable pricing is the solution. 49% of affluent shoppers claimed that their grocery stores offered enjoyable online experiences. Ensuring the smooth operation of your digital storefronts would help drive repeat business. Apart from digital platform operations, the physical products being picked during the fulfillment process or displayed on shelves must also meet consumer expectations. Only 57% of shoppers believe that their grocers offer quality products/brands. For the quality-driven consumer, it is crucial to fulfill their orders with high-quality items and fresh produce. A low 17% of shoppers said they receive quality products from their grocers when ordering online. Grocers who can deliver quality and fresh products at ideal pricing for online orders will win over quality-driven shoppers and cautious consumers.

The holiday season is hectic for consumers and retailers alike. Consumers want to conveniently find everything they need for their holiday meals at valued prices. Grocery retailers are hoping for the gifts of brand loyalty and profitability. With the negative impact of inflation on consumers’ holiday plans, grocery retailers have the opportunity this holiday season to deliver glad tidings at the checkout. By focusing on shopper trends, understanding what items their customers are looking for to avoid out-of-stock stress, and enhancing shopper experiences through digital storefront(s), grocers are able to strengthen their brand(s) and create a positive shopping experience for all.