Image Credit: Gilbert Mercier
Grocery product managers have gone a long time without having to make any big changes. However, in the past few years their job has become more and more challenging. The arrival of online shopping was in the process of fundamentally changing how their business was run. However, just to make things even more complex, the Covid-19 pandemic has changed how people shop for food. This means that grocery product managers now have to make even more changes to their product development definition, and they have to make them fast!
How The Pandemic Changes Everything
Supermarket product managers are using pandemic-driven changes in shopping behavior to accelerate the shift to e-commerce they have been seeking but have been slow to realize in recent years. These product managers are now devoting more of their floor space to fulfill digital orders in response to their customers’ increased food consumption at home and their growing reliance on online shopping. As an example, Albertsons the country’s second-largest grocer, is currently testing the use of dozens of 9-by-12 foot temperature-controlled lockers in select stores in both Chicago and California for customers to collect what they buy online. Their product managers are also introducing contactless payment in all of its more than 2,200 stores.
What the product managers want to do is to make things easier for the shopper. The pandemic has prompted the company to make a fundamental change by prioritizing digital investments. While many such technology investments were under way in the grocery industry before the health crisis, grocery product managers are now making bigger and faster bets in hopes of appealing to consumers who want to avoid shopping in person or at least reduce the number of visits. Recently online grocery purchases were up about 74% from a year earlier. This would look good on anyone’s product manager resume. The jump in digital sales is also creating new challenges, however.
Product managers realize that online purchases are less profitable than those made in-store because of the extra costs associated with fulfilling orders for customers. Grocers have to pay their own staff to pick and package items on shoppers’ behalf. Delivering groceries to consumers is also more expensive than having people pick them up because of the labor and transportation required. Compared to pickup, a grocery delivery typically adds $8 per order to retailers’ costs. Lowering costs is viewed as the only way for these product managers to move their online business to profitability.
Changing With The Times
For grocery product manager, expanding pickup can help to lower their costs. One chain is redesigning its stores to handle more pickup orders, converting parts of the customer-service area and building lanes of canopies outside its stores. The company is also in the process of fast-tracking plans to add self-checkout kiosks because customers are increasingly recognizing their convenience. It has added more than 1,200 kiosks in total to about half of its stores.
In addition to building up their online services, grocery product managers are making other adjustments throughout the stores. Many are reassessing inventory and expanding sections that have drawn more purchases in recent months, including the frozen and meat sections. Some retailers plan to increase the amount of square footage for seafood, meat and produce in new stores. The size of the sections will vary depending on the location. There is currently more demand for fresh items as consumers cook more at home.
Other grocery product managers are allocating more shelf space for nonfood items and larger sizes of groceries in high demand. One grocery chain recently directed all of its stores to display personal protective equipment at the end of aisles. Another chain plans to double space for quart-sized yogurt because it has been selling well among shoppers seeking larger packages. The product manager’s goal is to repurpose all the space that they can.
What All Of This Means For You
In the competitive world of grocery stores, for the longest time not that much changed. However, with the advent of online shopping, in the past few years there had started to be some change. However, with the arrival of the Covid-19 pandemic all of sudden those changes have been put into high gear. What grocery product managers have to find out is how they can use their product manager job description to best serve their customers during while a pandemic is going on.
The push to place grocery orders online has accelerated with the arrival of the pandemic. That means that more floor space at the grocery store has to be dedicated to digital orders. The pandemic has caused grocery product managers to accelerate their adoption of new technologies. Online orders are not as profitable as when customers come to the store because the goods have to be selected, packed, and delivered. The grocery product managers have to find ways to lower these costs. If the product managers can get their customers to come to the store to pick up their digital orders, then they can lower their costs. The products that the grocery stores carry is being adjusted to better meet the changing needs of their customers. The product manager’s new goal is to get the most value out of all of the space that they have in the store.
Changes were already happening in the grocery business. The pandemic just speeded things up. Grocery store product managers are now trying to find ways to deal with the new reality that they find themselves in. They need to understand that everything is going to change from how their customers buy food to how they arrange their stores. Grocery store product managers are going to have to learn how to deal with all of these changes. If they can do it successfully then the way that we buy groceries may have just changed forever!
– Dr. Jim Anderson
Blue Elephant Consulting –
Your Source For Real World Product Management Skills™
Question For You: When the pandemic is over, should grocery product managers try to get customers back into the store?
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What We’ll Be Talking About Next Time
Let’s face it: pandemics suck. Your best laid plans for how you were going to boost the success of your product at the beginning of the year got turned on their heads. As a product manager, you still have the same goals, it’s just that the rules of the game seem to have been changed. What you are going to need is some way to try to understand this new world that we all find ourselves living in. You need more information. Perhaps getting more data might be just exactly what you need to make it through this pandemic?