how grocery stores around the world are changing consumer behavior

Today product placement in grocery stores is influencing consumers to buy products that may not be necessarily healthy and may drive a behavioural change at a community level.

Dialysis is the new normal

A small town on the west coast had seen a sharp increase in dialysis cases over the years. That was happening because the entire city was very heavily dependent on meat and related products. There was an increase in obesity cases, and also early deaths were occurring in young adults. This alarming increase in deteriorating health concerned a resident until they decided to take things in their hand. He realised that there was no supply of enough green vegetables in the town. Moreover, because the entire city was so meat dependent, the household conversations never addressed the impacts of having healthy greens. The unending lines to the dialysis centre was a normal phenomenon.

There is a pattern that one can notice here. Products of a certain kind are pushed to the consumer. The consumer believes that that is the right thing for them. As a community, there is a behavioural change noticed - household conversations only happen around meat.
Because of an increase in demand, the suppliers ramp up the meat production, leading to an increase in cattle production. Thereby meat selling companies fight for more and more space on the shelves where it is accessible by consumers. Grocery store owners piggyback on the profit of a category that is now a very regular purchase of every other person living in this town.

A brief history of grocery stores

Originally there were no grocery stores, just a typical general store with one person sitting puts all the necessary grocery items into smaller packets or bags from one big bin. People only purchased what was required. Most of it was locally sourced and fresh - free of massive preservatives, or so it was believed. Eventually, for ease of use, aisles were introduced.

To prevent theft, stores developed an entry and exit point. To make things faster, multiple cashiers were introduced. This led to the modern aisle system now knows as a conventional grocery store or sometimes referred to as the supermarket. To fast track the purchase amongst the buyers, stores kept the preferred products on the top shelves where people could easily see and pick them up - all of this was an optimal height, so the buyer didn’t have to bend down.

This induced a behavioural change where the items on the top shelves or at an eye-level were preferred and picked up more. Using this trend, suppliers started bidding for premium spaces to be more visible.

Saving supplier relationships

Eventually, it was imperative to have great supplier-buyer relationships. Supplier, in this case, a particular food brand and the buyer being the grocery store owner. The competition is brutal, leading to corruption and bribery for premium shelf spaces at times. For this fight of the first aisle, the products displayed have changed from most needed by the consumer to most desired or must-haves but not necessarily functional.

There was a particular rise in products that were processed and contained high levels of sugar. Today all processed foods have high levels of sugar, which are not healthy, and studies are proving that. This has led to an entire generation of people changing the way they have their breakfast. When a whole generation of users develops an eating pattern, it becomes the new normal. People are more aware, however a sense of nostalgia is not able to break the consumption pattern.

Fight to the aisle

Over the years, we see more and more products being pushed to the top or eye-level aisles. However, this is limited to the commissions paid by the suppliers and other systemic factors such as the storage, distribution, freshness, look, and colour of the product. 

If they are perishables, they are highly modified to look perfect. Stores want the perishables - especially fruits and vegetables to have the same shape, colour and freshness levels. To give a fresh look, wax is used over the perishables, especially fruits and vegetables. This has also led to an increase in freezing & storage infrastructure as well as electricity overheads - increasing the overall cost of the product.

Because of these increased costs, grocery stores and the entire supply chain stakeholders are forced to consider alternatives to reduce costs. There is often an easy way out by procuring sub-standard products, alternative brands with preservatives and canned products with a longer shelf life.

Buyers are forced to purchase products that are unhealthy - a fundamental change of buying behaviour in the community is seen because grocery stores want an extra profit margin. This is fair because the profit margins can be meagre and on an average of 1.45%. So how can there be a middle ground for all the stakeholders here? 

Over the years, new ways to minimise costs and overheads have been continuously developed. Like self-checkout option, buying groceries online and picking up groceries at the supermarket or even a complete online shopping experience.

Digital push and post covid behavioural changes

To reduce the retail costs, the next best possible direction has been to move everything online. Similar to physical aisles, digital banners are pushing out products and deals. The physical store is replicated digitally.

Moreover it takes a pandemic to drive a global change in buying products. As we have seen, people have started hoarding or buying in excess. What has happened because of this the packaging has been modified. Large boxes or larger quantities have now started seeing the light of the day. Even if you want smaller portions as a buyer, one is forced to buy a lot of food in large quantities, eventually leading to more wastage or decay.

Rephrasing the Problem Definition

How do we create a system where the grocery stores do not push out products to the consumer to influence them but help them make better lifestyle choices? Especially when it comes to freshness, packaging, storing and buying experience and ensuring that a profit margin is maintained to sustain users' uncertain buying patterns and offset the supplier payments for shelf spaces wars.