Retail beyond the vaccine | Canadian Grocer

Source: Canadiangrocer.com

What it will take for grocery retailers to win the new (post-pandemic) consumer?

Hanif Mohamed, NielsenIQ | February 16, 2021

Hanif Mohamed

The conversation surrounding the COVID-19 vaccine has been dominated by logistics: drug administration approvals, the speed of production rates, countries vying to secure enough doses to vaccinate their populations and, most recently, concerns around scaling up and speeding up the rollout around the world. While the vaccine is being touted as the treatment, it comes down to personal choice.

Across Canada, as the government is now faced with the monumental task of rolling out COVID-19 vaccines, consumers are still deciding whether the vaccine is right for them. In fact, only 47% of Canadians plan to get a COVID-19 vaccine as soon as it becomes available, while 33% plan to wait for some time and 10% do not plan to be vaccinated (9% are undecided). So, what does this mean for retailers and manufacturers in Canada?

First, let’s look back to 2020 where we saw record-breaking sales across fast-moving consumer goods (FMCG) as consumers faced various stages of lockdown. Dollar sales surged to $117,400,632,512 (in the 52 week period ended Jan. 2, 2021), an increase of 11% from 2019, representing nearly $12 billion in added spending. With this substantial increase in sales, both national brand and private-label products benefited. National brands saw an 11% increase (representing $9.3 billion) in sales while private-label products recorded a 13% (nearly $2.4 billion) increase in sales and increased their dollar share by 0.3%. While private label saw a larger percentage growth, national brands still dominate and account for more than 82% of all FMCG sales.

In 2021, depending on where you are located, you are likely still facing various stages of lockdown. This is good news for the FMCG industry as sales are likely to continue trending higher than an average year, as consumers spend the majority of their time at home. However, retailers and manufacturers may be hard-pressed to see similar gains this year. As more and more Canadians receive the vaccine, and (hopefully) return to a more balanced lifestyle, consumer spending will start to shift back out of the home and into industries that have been negatively impacted during the pandemic.

In fact, once they receive the vaccine, 38% of Canadians feel confident they can start to dine out again, 41% are confident returning to the office, and 30% say they will feel confident enough to return to a movie theatre. All of these activities will see spending shift from FMCG outlets to other industries. In addition, 17% of Canadians report they plan to spend more on out-of-home dining and 9% plan to spend more on delivery and/or take-out meals.

So, what can retailers do to ensure consumers continue to spend their dollars in grocery stores in 2021? A strategic focus on omnichannel capabilities is essential to keep consumers engaged in the long term. COVID-19 accelerated e-commerce adoption in Canada, and we should expect some of these online shopping and purchasing behaviours will become ingrained among consumers who have learned the ease-of-use and convenience of online shopping. Other consumers, meanwhile, will relish the ability to leisurely stroll through grocery stores, discovering new products and interacting with staff.

It is also important to note that online channels serve a broader purpose than simply shopping. They are an essential way to research, compare prices and hunt for the right deals before deciding whether to leave home to make the purchase at a physical store or buy products online. Savvy retailers who see these types of activities and remove or minimize previous adoption hurdles will help ensure that any and all consumers stay online and make a purchase once they find it.

It is important for retailers to remember that what separates multichannel from omnichannel is the unified experiences across all of your platforms. Providing seamless customer experience, whether the client is shopping online from a mobile device, a laptop or in a brick-and-mortar store, is fundamental in the still-evolving omnichannel shopping experiences.

Hanif Mohamed is senior vice-president of retail services at NielsenIQ in Toronto.


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