Placer.ai Webinar Gauges Pandemic’s Long-Term Impact on Grocery Channels

During the height of the pandemic, supermarkets were among the best positioned of the so-called “essential” retail categories, and didn’t suffer the kind of traffic declines seen in other brick-and-mortar channels. That’s not to say, though, that the pandemic left the grocery sector unaffected in terms of operations and product offerings. Placer.ai, which measures consumer foot traffic, recently hosted a webcast focusing on how supermarkets—and the brands they carry—fared over the past year and a half, as well as which changes were temporary and which are likely to be permanent. 

At present, said Morningstar’s Erin Lash, grocery traffic is trending in line with company’s forecast. “We had anticipated that as vaccine dissemination became more widespread, consumers would start venturing outside their homes—not only to visit brick and mortar retail outlets, but also for food consumption,” said Lash, director of consumer equity research at Morningstar.

She added, though, that there is still “lasting impact” from the pandemic. “Consumers trialed e-commerce options to a much greater extent, and aren’t willing to give that up entirely,” Lashsaid.

Eric Karlson, director of strategy and insights at Dunnhumby, noted that consumer needs are starting to transition back into “something that isn’t going to be quite 2019 but isn’t going to be quite 2020.”

Prior to the onset of COVID-19 and the resulting stay-at-home orders, price and quality drove traffic. “Once COVID landed, it was all about speed and safety and digital,” said Karlson. “That was because people did not want to be in public. People did not want to interact with a lot of customers.”

Going forward, although speed and safety drove a lot of success for regional grocers, Karlson said it “probably is not going to be a tailwind for them as we start to transition.”

Moderator Ethan Chernofsky, VP marketing at Placer.ai, said that based on first-quarter traffic patterns, the “mission-driven” effect of grocery shopping trips in the pandemic is starting to wane. “The new normal is actually kind of similar to the old normal, the pre-pandemic normal,” Chernofsky said.

Addressing the question of whether certain retailers were successful during the pandemic because they shifted or already established their value proposition pre-pandemic, Karlson noted that Dunnhumby research found that “customer perceptions of retailers changed very little during the pandemic.” 

Instead, Karlson said, “The change happened in the customers’ needs. The customer wanted something that was fundamentally very different,” namely speed and safety and digital. Those who were strong in those areas in 2019 benefited in 2020.

Lash said that one effect of the pandemic—the simplification of grocery brands’ product lines and selection—won’t be a long-term trend. Clorox, for example, manufactured just 45 of its 450 SKUs during the pandemic, she said. Consumers will begin demanding variety in terms of flavors and sizes again. 

From a technological standpoint, trends that were already underway were accelerated by the pandemic, said Lash, adding that those are here to stay. “We anticipate that grocers are going to need to invest in e-commerce, delivery and omnichannel to differentiate themselves in a highly competitive space.”

Click here for an on-demand replay of the June 22 webinar.