Leadership Strategy

Big Box Retailers Find New Ways To Battle Amazon During The Pandemic

The pandemic has put a huge strain on retail, as we’ve seen from numerous furloughs and bankruptcy filings over the past few months. While big box retailers are able to withstand this kind of economic upheaval, brands like Walmart and Target are seeing consumer shifts across brick and mortar, online and various delivery options. To help discuss how these brands are meeting new customer needs, I connected with Randy Mercer, Vice President of Global Project Management at 1WorldSync, the leading product content provider for companies like Kroger, Target, Walmart and Amazon.

In our conversation, we discussed emerging trends including curbside pickup, grocery delivery and the reliance of online shopping for months to come. We also dive into Prosper Insights & Analytics July findings that reveal some interesting behavior changes since June.

Gary Drenik: For people who haven’t heard of 1WorldSync, can you tell us a little bit about what you do?

Randy Mercer: As you mentioned earlier, 1WorldSync is a leading product content provider, which means that our solution automates and accelerates the sourcing, management and overall distribution of product content for both B2B and B2C commerce. To explain the importance of this, consider the process of a consumer opening their computer to shop at Alibaba, Walmart, or another global retail platform. Consumers like to be well informed about their purchases, so they are not just expecting a lot of product information – they’re demanding it. This can include the size of a CPG product, 360 visuals, or important dietary facts and ingredients of food items. 

However, with large-scale consumerism requiring product suppliers to partner with dozens of retailers, this product content can get lost without some degree of standardization. 1WorldSync irons out these potential mistakes by syncing through the GDSN, the world’s largest product data network. Together, 1WorldSync is able to help retailers have the most useful product information that shoppers want to see both in-store and online, increasing the likelihood of them making a purchase – an important component as choosy consumers are being more critical during this time.

Drenik: Yes, it’s definitely obvious that shopping norms have completely changed these past few months. Our July survey of 7,861 consumers found 45% of consumers are now shopping more online up from 43.4% in June. Additionally, 22.9% now say they are shopping more online than in stores up from 20.8% in June. Do you think this is because retailers have been able to improve their ecommerce experiences? How does product content make the difference in the grand scheme of things?

Mercer: For many competing retailers (especially smaller ones), the consumer experience had been prioritized in the brick and mortar setting. But once the pandemic set in, many scrambled to get products online just to stay competitive. As stores wait clearance to reopen across the country, these retailers have seen the value of having a fully functional e-commerce presence that they leverage as part of their overall strategy. And as nervous shoppers continue to prefer online over in-store shopping, retailers are taking the time to finesse product content, adding more descriptions, photos and reviews of each product to beef up accessible information. Not only does this better mimic the in-store experience, but it also allows retailers to stay competitive, offering more details for shoppers to consider than just price and shipping rates. In short, product content is a huge differentiator that makes these products more tangible and inherently more valuable.

Drenik: Our data did see a decrease in adults having trouble buying items online for shipment (from 8.6% to 6.7% in July). But aside from providing accurate product data that fulfills a customers’ needs, how can brands better compete with one another during this shift from brick and mortar to more ecommerce traffic? Is there a way to convince shoppers to try something new?

Mercer: When shoppers walk the aisles of the grocery store, they know their choices are limited to what’s available that day. However, the internet brings the challenge of the “endless aisle,” providing an overwhelming amount of choices that never really have to end. This can be overwhelming for shoppers, especially older generations that are trying out grocery delivery for possibly the first time in their lives. 

Shoppers are going to purchase what they feel comfortable with, and brand recognition is half the battle. For example, PepsiCo staples like Doritos and Quaker Oats have seen a rise in sales these past two months, thanks to decades of prior brand recognition. The majority of consumers already know the taste, appearance and typical price point of these products, taking the guesswork out of shopping. If other brands want to stand a chance against them, their product content needs to be comparable to other food category leaders, with enticing images, standout flavors or superior nutrition. If other products can show their value in tandem with a better price point, traditional shoppers will be more persuaded to try something different.

Drenik: And how does buy-online-pick-up-in store offerings make a difference? Our data saw the amount of people trying BOPIS almost doubled this past April (20%), in contrast with August 2019 (only 11.3%). Additionally, how can one brand do this better than another? Our respondents vastly preferred Walmart over Kroger, with 20.6% saying they would recommend Walmart’s service to friends while Kroger only had a 3.8% approval.

Mercer: Especially during times of stress or uncertainty like we’re living through right now, people crave normalcy. For those who did the entirety of their shopping in-store, changing habits to now shop fully online can be a big adjustment. BOPIS gives some of the control back into the hands of the consumer, freeing them from reliance on a third-party delivery service that often comes with additional costs and unexpected challenges. 

That same longing for the status quo comes into play when we’re discussing consumer choices as well. According to Walmart, 90% of Americans live within 10 miles of a Walmart, making it a steady constant for American consumers. While Kroger is still a leading retailer, it doesn’t have quite as large of a geographic footprint as Walmart, which can intentionally lead to a smaller selection of products. With the recent announcement of Walmart+ it’s clear that the brand is fully investing in the online experience, which will increase brand loyalty especially during this time where grocery delivery is crucial.

Drenik: Walmart is definitely a reigning retailer when it comes to brick and mortar selection, as it beat Target, Costco and Kroger by a landslide in product selection (25.5% as opposed to single digits from the rest). However, when it comes to online shopping, Amazon takes a giant lead at 54.4% for best product selection, with Walmart in second at only 8% this July. What’s it going to take for shoppers to consider checking out a big box retailer over Amazon first?

Mercer: When it comes to taking on the Goliath that is Amazon’s e-commerce platform, there’s an obvious disparity between the two. However, this is a missed opportunity for retailers like Target and Walmart to improve their digital presence. Even simple enhancements to improve product details and information can drastically improve the online shopping experience, especially when it comes to necessities like groceries. When the stay-at-home orders were starting to take effect, we saw a lot of shortages which caused consumers to temporarily adopt a “take what you can get” mentality. Now that supply chain challenges have been leveled out, consumers are once again becoming more conscious about their shopping choices. Consumers want to know exactly what they’re buying – now more than ever as the economy tightens – so providing consumers with the details needed to make more informed purchase decisions will go a long way when it comes to customer loyalty.

Drenik: Thank you Randy for your insightful analysis regarding the shopping behavioral changes accelerating in the grocery world as a result of the Covid-19 crisis. These changes will have long term impact across the Grocery and CPG sectors as consumers are becoming more comfortable using non store services when shopping.

Complimentary Coronavirus/Covid-19 findings are available at AWS Data Exchange. To learn more, click here: Strategic Insights: Coronavirus Covid-19 Consumer

To read my previous Forbes articles on changing consumer behavior, predictive analytics, machine learning, data privacy and more, please click here.

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