Tag Archives: purchasing

The Three Pillars of Grocery Shopping Decision Making & How It Relates to Your Business

This week marks the debut of Wegmans in the Boston area (I’m sorry Northborough, no one is driving that far for groceries on a regular basis). Wegmans is one of those retail chains that has a bit of a cult following around it: people have been to one when visiting family or on a road trip or they grew up near one and tales of its wonders have spawned envy and (once a local outlet is announced) anticipation. A year ago, Chestnut Hill played home to a similar phenomenon when the first Shake Shack in the area opened, and previous waves have included Pinkberry, Target, Sonic and Krispy Kreme. If In-N-Out Burger ever came to Boston with its secret menu and animal-style burgers the whole city might have to shut down.

I am not immune to this phenomenon by any means… the memory of a salted caramel milkshake in Manhattan had me standing in one of those lines at Shake Shack last summer, and both my parents and my mother-in-law live in previously established Wegmans beachheads where I have marveled at the cheap prices and quality goods they were hocking.

Inevitably, we end up being let down when they finally open. It might come on the first visit, where all of your expectations are dashed by the reality that you are just paying one more retailer for one slightly different thing. It might come when the newness has worn off and you start to see the flaws now that the dust has settled. Or it may come when the routine availability of what was once an exotic good becomes just that, routine.

And Now For Our Theory

But what got me thinking about this particular Wegmans opening is one unique aspect… it is probably the smallest Wegmans of their 80+ locations. And this fact is going to have a key impact on one of the pillars in my Three Pillars of Grocery Shopping Decision-Making Theory… which I just made up this week.

Convenience

Convenience isn’t JUST location… but it is most of it. How easy is it to get there, to park (if necessary), to find things in the store, to check out and to get home.

When I was leading product strategy for Modiv Media, our business was grounded in making a few of those convenience sub-elements better for the retailers we worked with – primarily making the checkout experience a lot better — but we couldn’t do anything about the store locations.

Price

People will go to great lengths to save money, depending on their circumstances they may spend more time saving money than making it. So, feeling like you are getting a deal (note that this is often a feeling and not a reality) can often determine where they take their wallets.

Selection

This is undoubtedly the most subjective of the pillars and therefore the one that is the most variable for any given consumer. If we all wanted to buy the exact same things there wouldn’t be so many stores. So, when you are a grocery retailer, your selection is going to not only be a competitive factor, but also drive what type of customer you attract. And while some might argue that “Quality” should be a fourth pillar, to me that’s just part of the selection – do you have quality goods or not?

Putting the Theory into Practice

Which brings us back to the “petite” Wegmans that just opened here in Chestnut Hill. Given that it is about two-thirds of the size of its mainstream grocery competitors, it is not going to have as many distinct SKUs to begin with. Then you have to factor in their commitment to prepared foods, which takes up a lot more room, as well as the fact that their selection will vary because they are a different chain with a different viewpoint. So where does Wegman’s fit in?

  • While they are convenient to my house, if you live another mile or two away you start to have several other places that are closer. They don’t offer self-checkout and their parking situation is a little weird since it involves a parking garage.
  • Their prices are cheaper, although not cheaper by volume than a Costco, and Market Basket and Trader Joes are probably pretty comparable.
  • And their selection, while distinctive, is not as comprehensive as a Star Market or Stop & Shop nor as specialized as Whole Foods.

  • So for a consumer like me, my Three Pillars of Grocery Shopping Decision-Making got a little more complicated. Wegmans is now the closest grocery store to my house, so if I am purely making a home-based shopping trip then it will likely win out. I know it will be across-the-board cheaper, so I’m not going to let price drive me away (unless it is for an item that a club-store-size bundle will provide too good a value to pass up). Therefore the pillar that will drive my decision is going to come down to selection – do they have the particular things that I want – and more often than not this will probably be the case, although I know there are times when selection will pull me toward another retailer instead.

    And Your Point Is?

    At this point you are probably saying, “OK, so that was fun, but what does this have to do with my non-grocery store business?” Well, the Three Pillars of Grocery Store Decision-Making Theory isn’t really that specific to grocery stores. Regardless of what you are selling, your customers are thinking about these same three things:

  • Convenience – How easy is it going to be to do business with you and get this product or service up and running?
  • Price – How do you compare to competitors? Is it a good value or ROI?
  • Selection – Does your product offer the right set of features for their particular needs? Does your solution offer the services they value? How does it compare to what else is out there?

  • And just like deciding where to buy your groceries, convenience and price are going to drive a lot of the decision, but it is ultimately going to come down to the selection you are offering.

    Customers have a problem or a need and they are looking for a solution. Obviously if someone they already do business with sells it or it is already compatible with what they are currently doing it is going to be more convenient than something from a new vendor that requires a lot of set up or integration. So, when you are thinking about what integrations to focus on and which platforms to support, you want to make sure those are the same ones your market is invested in and not just the latest and greatest thing from the Valley.

    If your customer truly has a need, then they are going to find the money to pay for the solution, and as long as you are in line with or better than the alternatives price will likely not be a major determining factor in which solution they ultimately select (obviously if you’re selling a true commodity a lower price may be THE determining factor). So you obviously have to know what your competitors are charging… and who your potential customers are considering as alternatives.

    So once again it comes down to selection – do you offer what they want or need or are you trying to sell them on a selection of features or services that doesn’t meet their requirements. This isn’t just about not adding bells and whistles when they want streamers and glitter, this is about truly getting to know your potential market and identifying what are the individual factors that matter most to them.