This was quite a year for grocery shopping. Think about how your own family’s food needs and habits have changed since March. We’re all in that same boat. In 2020, we conducted two rounds of U.S. grocery shopping research – one in April at the height of COVID-19’s first major wave, and the other in October before the widespread onset of the year-end Coronavirus spike. Throughout the year, we also heard from hundreds of thousands of customers on behalf of our supermarket clients. From all this shopper input, here are five findings for the future.

Safety Concerns Here for a While

Remember Psych 101? Famed psychologist Abraham Maslow identified physical safety as a basic need that all humans seek before considering higher-order needs. It’s hard to fathom safety as a primary basis for deciding which supermarket to visit (over say, produce quality or customer service), but welcome to post-pandemic USA. Back in April, our research showed only 33% of U.S. grocery shoppers were highly confident in supermarket safety relative to the risk posed by COVID-19. Grocers were amazingly quick to respond with store modifications and with safety protocols like social distancing and mask policies, to protect employees and customers alike. Retailers communicated these measures on store signage, in customer emails, and on social media. By the Fall, all these safety practices seemed almost second-nature to grocers. However, when we re-surveyed U.S. shoppers in October (even before the holiday spike in infections), still only 32% were highly confident in supermarket safety.

Shopper comments throughout the summer bore out the basic importance of supermarket safety measures. Grateful customers expressed new loyalty to a store because its cashiers were so diligently cleaning their checkout area. Others announced they had to shop elsewhere because the carts and baskets were no longer being visibly sanitized. It’s clear that perceived safety now impacts store choice and customer loyalty, and it will for the foreseeable future.

Grocers need to establish and maintain their safety image as a competitive attribute, just like their price competitiveness or perceived grocery variety. Consumer images are challenging to change, especially in the short term. The first step is for grocers to keep communicating about their safety efforts. When the pandemic first struck this year, I received detailed, compassionate emails from a top executive or the owner, at every retailer with whom I did business. After a few short months, these emails stopped coming. Just because safety protocols become well established at any store or company, doesn’t mean customers should stop hearing about them.

Stock-ups and Stock-outs: New Habits and Attitudes

The COVID-19 pandemic introduced the concept of supply scarcity to all but the very oldest of U.S. grocery shoppers. Haven’t we all recently wondered — as we purchased paper towels or baking flour — if we should grab an extra one, just in case it won’t be available next time we run out? Our latest surveys underscore a shift in how much product consumers prefer to keep on hand. For example, two-thirds (67%) of shoppers now keep more than a week’s supply of meat in their refrigerator or freezer. Prior to the pandemic, only half (50%) kept more than one week of meat on hand. Turning to shelf-stable and household products, the majority of shoppers are now stocking “a few months or more.” Pre-pandemic, most shoppers were comfortable storing a shorter-term supply of these items at home.

After the first COVID-19 spike, one of our grocery clients asked its customers how their store could be better prepared to handle a second wave or future pandemic crisis. The most common piece of advice didn’t relate to safety; rather, it was to anticipate product shortages and impose key-item quantity limits early on.

Yet even as shoppers remain concerned about not being able to find products on store shelves or available online, many appear to have developed a higher tolerance for out-of-stocks. In our 2018 in-store grocery experience research, we found that even one out-of-stock item was a killer of the shopper’s OSAT (overall visit satisfaction) rating (3.70, on a 5-point scale). In our October 2020 study, the average OSAT for in-store shoppers who encountered a stock-out had grown to 3.91. This movement indicates shoppers now weigh other visit factors, such as value or service, more heavily than in the past.

Our online grocery research suggests a similar dynamic. In 2019, nearly all (92%) of online supermarket shoppers received every item they ordered (or an acceptable substitute). This figure has plummeted in 2020, to 48% in March and still only registers 53% in October. However, OSAT ratings of the online grocery experience have all but recovered to their pre-pandemic level (4.48 in 2019 and 4.44 in October 2020). So basically, a lower standard of in-stock condition appears now baked in to shoppers’ perceived satisfaction equation.

Online Shopping: Integration is the New Normal

The explosion of online grocery shopping in 2020 has been well documented. The Coronavirus pandemic boosted online sales to a portion of total grocery spending that wasn’t forecasted for years down the road. Our recent research points to continued growth of the U.S. online grocery channel. By a 4-to-1 ratio, shoppers indicated they intend to shop online for groceries more often in the foreseeable future. Our studies this year have further shown that U.S. shoppers are comfortable using both in-store and online channels to meet their grocery needs. In April and again in October, roughly two-thirds of younger in-store shoppers (Gen Z, Millennial) and half of all in-store shoppers also shopped online recently.

We continue to advise grocers to integrate their digital and physical experiences because those customer groups are increasingly blending. Any grocer with a loyalty card should be able to offer promotions based on online and in-store purchase history, and a few retailers have moved beyond that basic convergence. For instance, when shopping online at Whole Foods (via Amazon), the items I have purchased in the store, merged with prior online purchases, all on one page, which is a true convenience for me.

In the early stages of the pandemic, grocers rushed to meet the surging demand for online ordering and fulfillment via pick-up or delivery. Most food retailers had seen relatively low usage of their online offering, (some had no capability at all) but certainly their digital ordering platforms and picking/fulfillment operations were being stretched to unprecedented levels in the ensuing days and weeks. These rough edges did not go unnoticed by online shoppers, whose survey comments mostly conveyed appreciation and gratitude but whose overall satisfaction rating and Net Promoter Score (NPS) dipped sharply in April 2020 compared to 2019 levels.

Supermarkets’ online NPS rebounded by October 2020, as did experience scores for item availability, value for the money, and pickup/delivery time slot availability. However, these higher ratings were due at least partly to shoppers’ growing familiarity with their store’s online offering. It is noteworthy that those who have used an online grocery service five or fewer times rated their most recent experience below 4.25 (1-5 scale), yet experienced users (more than 20 times) gave an extremely high average rating of 4.72 to their last experience. Retailers would therefore be wise to invest disproportionately in encouraging repeat visits from newer online shoppers.

Resilience Rescues the In-Store Experience

The efforts and dedication of supermarket employees across the country were truly heroic. Putting their own safety at risk, frontline grocery workers adapted to new rules and roles with grit and grace. We saw countless grateful survey comments from customers praising employees for their diligence to safety, their compassion even from behind a mask, and their positive attitude amidst all the uncertainty. Headquarters support staff and management teams in every function — from marketing/merchandising, to HR, to IT/administration and asset protection — pitched in with long hours and a spirit of innovation needed to support their stores and serve their customers in new ways.

With all of this hard work noticed and appreciated, in-store customer satisfaction scores recovered between April and October 2020. All experience ratings were higher, with the most significant gains in variety/section, quality/freshness, staff friendliness and helpfulness, checkout speed, and value for the money. Overall satisfaction rose from 4.08 to 4.23 (5-point scale). OSAT and most other attribute ratings did not quite recover to their pre-pandemic levels (OSAT was 4.31 in 2018) but they were a positive reflection on the grocery industry in a year of enormous uncertainty and change.

The Next Level: Hard Work Ahead

Despite this improvement in core experience ratings since the first wave of COVID-19, supermarkets are in a precarious position as 2021 begins. When the pandemic fades away, the industry landscape will have evolved in ways that force grocers to differentiate themselves more than ever. Walmart and Amazon will continue to invest in their physical and digital channels and become even more formidable. A soft post-pandemic economy will only strengthen the position of Aldi and value-focused retail formats. Restaurant spending will recover and take some of those dollars back from the grocery channel. So, to maintain their momentum from 2020, supermarkets must stake out a sustainable competitive position in their markets. They will once again need to demonstrate expertise in food itself. They will need to provide an appreciably higher level of service and community focus than other stores. And they will need to present a value proposition that resonates with their own customers and with younger shoppers of the future.

When it comes to these differentiating factors, the supermarket channel did not receive high marks on our recent survey. Shoppers rated their own primary supermarket quite low (below 3.50 on a 1-5 scale) on three key food-related attributes: being passionate about food, offering a unique selection of local products, and offering “signature” items that can’t be found elsewhere. Employees received low marks for being friendly (3.62), for demonstrating food expertise (3.51), and for seeming to enjoy working at the store (3.53). On the value front, shoppers rated their primary store poorly on “providing good value for the money I spend there” (3.63) and “showing it values me as a customer” (3.58). And finally, shoppers only modestly agreed (3.49) that their primary store helps take care of the local community.

These results are industry averages. There are many food retailers who shine in these differentiating factors, and they are well-positioned for a bright future. And to be fair, most supermarkets have been focusing this past year on the immediate job of keeping their stores safe, stocked, and staffed (see Maslow’s hierarchy, above). But in 2021, all grocers will need to expand their focus to the higher-order needs and new expectations of their customers. It’s an opportunity for the industry to rise to the next level, and we look forward to chronicling the elevated shopper experience.

Written by Doug Madenberg, Principal, The Feedback Group