The grocery sector in Ireland is highly competitive. Across the country consumers have a choice between six main brands: Ireland’s own Supervalu and Dunnes Stores; UK supermarkets Tesco and Marks and Spencer’s; and German value brands, Lidl and Aldi.
With Dunnes and Marks and Spencer’s operating at the high-end of the scale, and Lidl and Aldi commanding the value market segment, Tesco and Supervalu compete in the mid-value market segment.
Tesco and Supervalu were being squeezed at both ends of the market – Dunnes and Marks and Spencer’s were dominating the higher-end market while Lidl and Aldi are planning to increase their market share, with Lidl alone investing €700 million in the Irish market.
Our client had recently redesigned their online shop to improve the customer customer experience. Following this they wanted to know more about how their customers move between online and offline channels.
- Industry: Grocery
- Position: UX Research
- Team: 3
- Year: 2016 – 2017
- Activities: Customer research, customer shadowing, client workshops, synthesis, service prototyping
Researching customer behaviour
To understand grocery shoppers’ behaviour we organised a series of research tasks designed to help us observe and interview typical customers.
In-Context Customer Interviews
Using personas developed during an earlier stage in the project we recruited matching candidates for interviews at home and in-store. During these two-hour long interviews we visited candidates in their homes and using a semi-structured interview, we began to understand how customers shopped.
Interviewing in context gave us great insights into how customers plan their shopping, how they used vouchers and discounts – including the mental models they employed around these, how they planned meals and large family events, and how they conducted their shop online and offline with the client and competitor shops.
Through user testing we already had a strong understanding of how customers conceptualised the online shopping experience and how they conducted their online shop. To understand how this behaviour related to in-store shopping we spent two days in a local store conducting shot interviews with shoppers.
We supplemented this with our previous user testing, survey and market research before conducting a week of in-depth analysis and synthesis.
This research showed us that customers we conducting more frequent in-store shops, picking up a small number of items each time. Larger shopping trips were becoming confined to family events, such as Easter, Christmas, birthdays and anniversaries.
For the brand, we discovered that loyalty, at least offline, was a matter of convenience. Customers are willing to shop anywhere provided that access to the store was convenient. One significant exception to this was fresh produce – butcher, fishmonger, baker produce – customers were very selective about where these were bought.
When shopping for goods such as clothes or technology, consumers will shop around (this form of shopping a leisure activity). But grocery shopping is a functional activity, once a consumer has created an account with a supermarket they will remain with the brand, until and unless the quality of produce delivered, or the quality of the delivery service, falls below expected standards.
For Irish supermarkets this means that the supermarket that provides the easiest to use account creation flow, most intuitive product selection process, and the most convenient delivery times, and product quality could capture and hold the largest share of online shoppers.
To put this another way, this was a two horse race between Supervalu and Tesco – the supermarket that provided the better digital service could quickly become the dominant online player.
If we look at the three key consumer needs
- account creation process,
- product selection process, and,
- convenient delivery times
- product quality
While each is important, a special emphasis should be placed on the account creation process. This account creation process is the only time when the customer can directly compare both supermarkets. And many users use this as an analogue for judging the overall delivery process – conversely, if the account creation process was overly complicated users would take the path of least resistance and use the easier option.
With these insights we we able to provide the client with a detailed assessment of how their customers shopped online and in-store and a strategy that encompassed product, marketing, digital, and business processes to convert offline customers into online customers, and to gain an edge over larger and hungry competitors.
With this strategy we were able to a clear view of the short-term challenges and the long-term opportunities for the client in the omnichannel space.