Below are two monumental pieces of information for those of us in the grocery business to consider in 2025 and beyond.
U.S. grocery stores ad spend 2022-2023
In 2023, the grocery store industry in the United States spent 2.04 billion U.S. dollars on advertising, up from 1.94 million dollars a year earlier. That represents an annual increase of roughly five percent.
Grocery stores and advertising in the U.S.
Grocery shopping in a physical store is still important although the popularity of online groceries continues to grow. The primary convenience store shoppers in U.S. households made an average of 1.6 shopping trips per week in 2023. Since these consumers spend time in grocery store aisles, that creates a potential point-of-sale advertising viewing time. When asked about their grocery shopping preferences in an online survey conducted in April 2023, two out of 10 U.S. Gen Zers reported thinking that a product’s logo was a major consideration. Among Baby Boomers, only five percent felt the same. *
“Advertising is the tax you pay for being unremarkable”
A quote that is commonly attributed to Robert Stephens, the founder of Geek Squad. He used it to emphasize the importance of creating products and experiences that are so remarkable they generate word-of-mouth on their own, reducing the need for traditional advertising.
We (the grocery industry) spend a tremendous amount of money annually in advertising and marketing, only to have customers come in our stores to be disappointed.
So, what’s the solution?
After spending almost 50 years in the grocery business – I believe it boils down to one simple truth:
“Take care of the customers you have, and you won’t have to worry about sales comps, hitting margin targets or high advertising expenses.”
How many of you know of retail stores or restaurants that have this figured out? I’m always on the hunt for stores that just get it. They see and engage with you when you walk in the door, they listen to you and truly want to know how they can help you, and they LOVE to tell me about the products or delicious food they sell!!
One thing is for sure; They don’t ignore you!
As many of you know – I spent over 27 years at United Supermarkets in Oklahoma – where our motto was, “Home of the Personal Touch”. We were trained from the beginning that our customers’ names were the sweetest sound to their ears. And we were challenged to learn their names and call them by their names with every visit, even learn their family members’ names and what hobbies they had in our communities and to make sure they knew how much we appreciated their business. We also had a generational mantra, “Do whatever it takes” to make our customers happy. (Obviously within ethical boundaries).
With all the changes over the decades to the grocery business and everyone in the world becoming a competitor – online and brick-n-mortar stores all now selling groceries; How do we compete?
We go back to the original formula for success –
TAKE CARE OF YOUR CUSTOMERS like nobody else does.
On a recent shopping trip, I made here in Colorado – I wish I had recorded my experience because it goes perfect with this leadership lesson. As I entered the store with my shopping cart, (or buggy as we call it in the south…) I entered the produce department and one of the clerks stocking the salad section pulled their giant stock cart in front of me, blocking me from shopping and I had to back up and go around a large island to get what I wanted. No “excuse me”, no “can I help you”, no “I’m sorry – what can I get for you” – he just blocked me. Then when I got over to the service deli department, there was a customer standing at the counter and he actually cupped his hands over his mouth and yelled in the direction of the back room, “HELLOOOOOOOO – anyone back there?”, trying to get someone to come out and help him. My daughter walked down to the end of the counter and saw someone in the back and asked them to come out and help this customer. WHAT? And then, when down one of the grocery aisles – I couldn’t find something on my list and asked a clerk working in the aisle where it might be, and they said – “just check the app, it will tell you what aisle it’s on”. And the final event was the self-checkouts. They were packed and had at least 5 people in each line and of the 15 other live cashier checkouts they had – only 2 were open – and this was the Saturday before Mother’s Day.
Needless to say – this was a horrible experience – but not the first time I’ve left the store and just wished there were other options within driving distance to our home in the mountains. Because if there were, I’d never go back into this store. NEVER.
As I travel the country now – teaching leadership and business strategies in the grocery channel – sadly, my comment these days are that “IF you leave a retail store today and aren’t mad (for all the similar reasons mentioned above) – well, then that was a good shopping experience.” What a travesty.
And, as is my leadership style – I don’t want to present a problem without a solution. Here is the solution and it’s like all other life lessons – it must be modeled from the top of the organization as a #1 priority. Everyone in a leadership role must live out the model as well:
By living this mantra, we create a service culture where every customer feels seen, heard, and helped. When we do this, we get a customer for life and as they share with friends and family – free marketing!
Another visual of how this work is one of my leadership lessons called,
“Are the lights on?”
When a customer enters a department with no engagement with the clerks, the lights are off. The moment someone engages with them – suddenly – the lights come on in the department and the customer can “see” more and will most likely “BUY” more! You can see in the illustrations below how much more inviting a department looks with the lights on:
When we have engaged team members – that truly care about our customers – here is what that looks like:
I truly believe that this next decade will shake out a lot of retailers that just don’t get it and that means there will be winners over these same years that do get it.
I hope that you will take this lesson to heart and be one of the winners in these next few years.
One thing about this world we live in – people will always have to eat. And they want to spend their hard-earned money in an operation that values them and what they need.
After teaching this lesson at one of my previous companies, I always loved going on store tours and having people flag me down and say, “Our lights are on here in my department”!!!
Here is my compelling math on the CLTV (Customer LifeTime Value) to build a business case to help us teach our teams the “why” behind and “reason” we don’t ignore our customers and this math is just ONE customer value over a lifetime!
*-According to https://www.statista.com/
