Market Context
Consumer Needs and How The Market Meets Those Today
U.S. grocery is a mature market, with many established players who closely follow customer needs. As a result, customers generally find most of their needs appropriately met (or even overmet), by the market.
There are some needs, however, where many customers say this is a very important need, but the average retailer performance on this need is relatively low. These needs, which we can think of as the customer biggest pain points with the grocery market in general, are:
- Promotion relevance (but not necessarily promotion depth or promotion volume)
- Base prices
- In-stock rates
- Retailer sustainability efforts
If retailers are able to clearly differentiate themselves from the rest of the market on these needs, they can be among a handful who solve for these pain points.
To the point of differentiation, retailers have clearly been able to differentiate themselves from each other on some customer needs, more than others. These areas of differentiation (green bubbles) are likelier than relative areas of parity (gray bubbles) to be driving differences in retailer outcomes, like financials and emotional connection with customers.
Two needs in particular stand out as candidates that are likely to be driving differences in retailer outcomes: base prices and promotion relevance. These are customer pain points within the grocery market, where some retailers are clearly perceived to be different than others.
Our Retailer Preference Index model and ranking reconciles all of these concepts – customer importance, customer satisfaction, customer pain points and retailer differentiation – to produce a clear answer as to who is best positioned to win over the long-term in grocery and why.