Online retail has transformed the world into a global mall. Across the globe, the number of tons shipped by ocean containers multiplied almost 17 times from 102 million in 1980, to 1,720 million last year. Singles Day in China is one of the largest ecommerce holidays worldwide; in 2017, Alibaba sold products from 192 countries. Consumers in Europe and beyond are unquestionably shopping across borders more and more frequently.
Meanwhile, there’s a simultaneous consumer trend for clean eating, ethical sourcing, and supporting local manufacturers, producers and farmers. This trend driven by the idea that goods travelling fewer miles will taste better and retain more nutrients.
Add to the mix growing consumer disloyalty; shoppers will gladly switch from one store to the next depending on where their preferred products are more widely available, more ethically sourced, or more conveniently located — whether in their own country or elsewhere.
So, what do grocery shoppers want, the wide variety and novelty of global produce, or to support local grown groceries with lower food miles?
Protecting the environment
Supporting local is fast becoming a necessity for attracting and maintaining customers. A growing number of shoppers, seeking more sustainable foods and hoping to help the local economy and the environment, report that local food availability is an important factor in deciding what they buy, and where they buy it.
Meanwhile, a survey by cross-border logistics firm B2C Europe in the UK, Netherlands, and France, 85% of respondents reported a preference for 'green deliveries' of six to eight days, or a standard delivery where goods arrive within three to five days.
Only 10% of people would choose express delivery after they learnt that a shorter delivery window resulted in worse traffic and air pollution.
Global or local?
So, when it comes to choosing grocery products specifically, do consumers prefer global brands or local producers? The answer depends primarily on the category.
When it comes to fresh produce, it’s perhaps no surprise that local is the consumer favorite. Nielsen conducted of global survey to ascertain global consumer preferences. The majority of respondents report a preference for local brands to global ones for vegetables (68% vs. 11%), meat (66% vs. 13%), and fruit (64% vs. 12%).
According to a similar survey by ATKearney, shoppers think more highly of retailers that carry local goods. What’s more, half of consumers admitted they are willing to pay up to 10% more for locally grown or produced foods, and one in three said they are willing to pay up to 25% more.
Convenience, meanwhile, ranks higher than origin for frozen and canned foods. The largest percentage of respondents in Europe say brand origin is not important for sweets, crackers and instant food.
“Winning in packaged-food and snack categories is all about understanding and innovating around local tastes and eating habits. Local companies often have a deeper understanding of consumer tastes in their market and can respond more quickly to changing needs.”
Patrick Dodd, group president, Nielsen Growth Markets
Freshness is key
For consumers, freshness is by far the most important criteria when deciding where to buy their groceries, followed by price, according the the global survey by ATKearney.
Many consumers want both fresh and local in categories such as fruit and veg, prepared and processed foods, meat, fish and seafood, dairy and eggs, and bread. Local sourcing, therefore, is a powerful way for retailers to demonstrate products freshness and to differentiate in the competitive grocery market.
Automation and Artificial Intelligence can help
The grocery market is increasingly complex. Retailers are expected to offer both a wide variety of stock to answer the need for variety and convenience, while also holding local products with lower food miles and more limited supply.
Competition is increasingly fierce as lower-cost supermarkets offering lower cost, local fresh produce are exploding in popularity. Traditional grocery retailers will need to find their unique positioning, whether that is lower cost and high value, wide range and convenience, or specialized offerings.
Sufficiently optimized stock, then, is essential in the modern grocery retail industry. Businesses will almost certainly lose sales to competitors if they are unable to guarantee the right products on their shelves, the origin of their goods, and the freshness of their food.
AI technology can significantly help to optimize grocery retailers’ increasingly complex supply chains, particularly in a low-margin, high-demand area like grocery. Grocery retailers can advance their stock decisions by analyzing local demographics, buying patterns, and other circumstantial data. Automated decisions like those offered by Blue Yonder can help retailers optimize their supply chains and gain a competitive edge.