With shelter-in-place orders rolling across the country and other “curve-flattening” measures becoming the norm, more consumers are choosing to stay away from the store and opt for curbside pickup or delivery from grocers and restaurants. Restaurants who didn’t offer delivery service just weeks ago have scrambled to initiate programs, some even selling booze or household essentials as part of their delivery offerings.
A shift to more convenient options like delivery and direct-to-consumer isn’t new. We actually highlighted this topic as a trend to watch in our Food Forecast 2020 report, as services raced to cut wait times and offer one-hour delivery services. In today’s COVID-19 world, however, wait times are up to a few weeks for some stores (Texas-based H-E-B has a 2-week lead time for delivery and curbside; Whole Foods Market’s next-day slots are being reserved in minutes) as grocers are overwhelmed by demand. Last week, shipments to grocery and discount stores were up more than 50% over the same period in 2019 [Hustle].
Expect to see some grocery chains take this conversion to the next step by permanently converting designated stores into warehouses where only curbside or delivery are offered.
What it means for brands:
- It’s easy for consumers to get stuck in a brand rut. We all tend to buy the things we know and trust. Inside stores, we could sample new ideas and even attend cooking classes. Those days are over for a while. In their place, new life is likely to breathe back into email marketing, with couponing to encourage trial of new offerings. Social media usage has spiked (22% on Instagram alone, according to PR Week), making way for brands to use their channels in authentic and empathetic ways.
- Walmart, HEB, Amazon, Dollar General and more are adding thousands of workers to take advantage of this trend now, and will be invested in that staff for long enough to capture the change in consumer behavior.
- Amazon’s hiring laid-off small biz workers
- Walmart to hire 150K hourly employees
- Nearly one-third of U.S. households shopped for groceries online in the past month
- Kroger converts store to pickup-only service
- Warehouse workers, truckers, postal staff: People who power our mail face major strain
- 3% of restaurants have already closed permanently, NRA survey finds
How long do viruses or bacteria live on package surfaces? Consumers don’t want to have to guess. While the buzzword around packaging last year was minimization, we’re seeing a sudden shift to consumer concern about food safety and a related perception that more packaging is better. [Mintel – COVID-19 in the US: what’s happening now? – March 2020]. Going forward, consumers will expect take-out/delivery services to replace bags and boxes with technologically advanced materials that are both germ resistant and environmentally friendly.
Also, distrust of food safety practices at restaurants may make consumers wary of returning. Surface sanitization will become a selling point for those restaurants trying to attract people back, but it could be an uphill climb. In the UK, the fast food industry has ground to a halt as even drive-thrus are deemed unsafe. At home, the 83% of Americans who call themselves basic or intermediary cooks [Mintel], will focus on food safety in their own kitchens.
What it means for brands:
- Transparency is valued even more than before so communications about food safety measures to reassure customers is going to become a differentiator.
- Restaurants will have to adjust to more stringent and self-imposed cleanliness requirements such as enhanced sanitation practices and safer-looking take-out packaging.
For years, grocery store pre-packaged meals have slowly but surely taken over coveted in-store real estate. In a post-Corona era, a new generation is likely to be more motivated than ever to learn to cook for themselves. Convenience will give way to staple-based meal prep at home, accelerated by a) food safety concerns and b) realization of how much money can be saved / how much was being spent at restaurants.
Sales of shelf-stable and frozen products have already spiked – Spam is having a major moment, for example – but it doesn’t mean consumers know how to cook with those foods. Meal kit brands, whose history has been full of highs and lows, will do well with consumers who want to cook but need extra help. Blue Apron, for example, was in serious financial trouble just weeks ago but has surged as one of the best-performing stocks last week.
Because consumers will feel they’re saving much more on food, they’ll reward themselves by spending on better beer, wine and booze – and weed.
What it means for brands:
- Consumers will be attracted to grocery brands that link a week of recipes to their shopping list and then to their pickup or delivery schedule. A well-executed food plan may be more valued than convenience and serendipitous shopping.
- Investing in online advisors in the form of chatbots to advise online shoppers about freezer-friendly meals, family friendly meals on 5 ingredients or less, and more is likely to be a very smart play.
- Social media and streaming video usage has soared with more workers home, so consider content and formats that meet them where they are, i.e. overhead-shot, Tasty-style cooking videos.