Image Credit: 1Flatworld
So let’s face it, when the pandemic struck and everyone got locked into their homes, there simply was not a lot to do. What everyone ended up doing was watching a lot of Netflix and eating. Cooking at home which had been dropping off for the past few years experienced a resurgence as people sought ways to both fill their time and their bellies. As vaccines become available and the fear that kept everyone at home starts to ebb, people are now once again starting to venture outside of their homes. What is this going to mean for grocery store product managers and their product development definition?
The Downside To The End Of A Pandemic
Product managers at grocery stores were among the biggest winners last year. Now, some product managers worry that their business looks poised to slip this year. Pandemic lockdowns forced restaurants to close and then limit service, but the good news for grocery product managers was that supermarkets and grocery stores were spared because they were deemed essential. Business boomed because customers stocked up on food and other goods. Those dynamics helped boost U.S. grocery sales by 11% which was more than triple the growth of the previous two years. This would look good on anyone’s product maager resume.
However, as more Americans get vaccinated, they are showing a desire to eat out again and may end up spending less money filling up their cupboards and refrigerators. Grocery product manager are competing against each other to grow their e-commerce business while delivery companies like Instacart are expand aggressively. Just to make things even more complex, Amazon.com is entering neighborhoods with its new grocery chain, taking on some stores that had faced little bricks-and-mortar competition.
Some of the hardest-hit property types, like hotels and retail centers, have rallied in anticipation of pent-up demand for travel and other experiences outside the home. Now, it’s grocery store product manager’s turn to face fresh headwinds and new competition. Some analysts have noted that unless grocers expand in high population growth areas, their pie doesn’t get bigger. Instead, it can get split up between more players. The Instacart service added more than 200 new retailers whose food it started delivering last year, and it also started pickups from about 2,000 new locations. The company said its transaction volume remains higher than before Covid-19, and it says consumers like its services because it saves them time.
How Groceries Can Remain Relevant
One problem that grocery product managers are facing is that many customers are already accustomed to buying their produce online. Yet the number of grocery stores still continues to grow, clogging the market. In just the past two years, the number of these stores with at least 5,000 square feet rose by 1,253 to 23,603. In the prior two years, the number of stores had been basically unchanged. For landlords, grocery stores are considered a better bet than other kinds of retailers even more vulnerable to e-commerce. Some grocers have also been experimenting with smaller-format stores of less than 10,000 square feet.
Product managers with physical stores still have a competitive advantage and that some grocers have used the increased revenue from last year to refit their stores. Supermarket product managers are making more room to handle in-store pickup of online orders such as adding temperature-controlled lockers. It’s the most cost-effective to have the customer pick their own goods. The pandemic accelerated plans to streamline and upgrade the shopping experience. As a customer, it’s going to be easier to shop and much easier to navigate.
Not all grocery product managers are anticipating dips this year. Some chains are recording higher sales and grabbing a bigger share of U.S. food spending. Though online sales growth has plateaued as lockdowns lifted across the country. Some grocery product managers have undertaken a major initiative to improve profitability on digital sales, including building automated warehouses. Product managers are spending hundreds of millions in increased automation and robotics that includes the option of delivering goods directly from warehouses.
What All Of This Means For You
Grocery product managers received an unexpected windfall that was never on their product manager job description when the pandemic struck. All of a sudden people stopped going out to eat. Instead, they went to the grocery store and purchased products to make meals at home. This was a boon to grocery product managers. However, as the vaccines become available and people start to once again venture out to eat at restaurants, will grocery product managers be able to keep their success going?
During the pandemic, restaurants closed. This created a boom for grocery store product managers. However, as people start to get vaccinated and return to visiting restaurants, they probably won’t be shopping at grocery stores as much anymore. Grocery store product managers are going to have to expand in high population areas and be aware of competitors such as Instacart. During the pandemic, customers have become used to shopping online. This has led to the creation of smaller grocery stores. Product managers have used the increase in grocery shopping as an excuse to upgrade their stores. Some product managers believe that their sales will continue to increase and they are building out their stores.
The pandemic was an upheaval that nobody could have foreseen. Grocery store product managers have been benefiting from it as more and more people prepared food at home. However, with the end of the pandemic, grocery store product managers are going to have to get creative in order to keep their sales up. They need to make sure that their stores are attractive destinations for their customers and they need to ensure that they make it easy to shop with them. If they can do both of these things, then sales should continue to be strong.
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™
Question For You: What do you think that grocery store product managers can do to compete with Instacart?
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