Accurately measuring customer satisfaction in the cutthroat-competitive grocery marketplace is key to avoiding defections. This is especially true as newcomers seemingly emerge every day, and none more frightening than Lidl.
Fresh of its successes in Britain, the German grocery giant known for combining low prices with high quality private label goods is set to invade the United States’ east coast, where it will open 30 locations this summer and have 100 up and running within the next year.
Walter Loeb, President of Loeb Associates, did not mince words when describing the coming threat US grocers face: “It is time that the U.S. food retailers wake up to this competitive threat. The huge success of Aldi and Lidl in Great Britain is a warning to the industry.”
That means an already brutal landscape, with roughly 38,000 US stores boasting annual sales greater than $2 million, is about to get a lot more competitive. According to Mike Paglia, Director of Retail Insights at Kantar Retail: “I think it’s safe to say that Lidl’s entrance in the U.S. will be one of the biggest events in U.S. retail over the next couple of years.”
How then can grocers, national and independent alike, withstand this forthcoming Lidl Grocery Invasion? As recent analysis by marketing firm Interactions indicates, the key to maintaining a competitive advantage in such a tumultuous market is to know your customers, understand their priorities, and anticipate and then exceed their expectations.
Easier said than done, right? Not necessarily.
Understanding your customer is as simple as finding the right combination of market research methodologies and analyses. There is no one-size-fits-all approach, but a robust research program may combine any of the following four tactics:
- Customer Satisfaction Surveys to understand your service gaps and key differentiators
- Mystery Shops to ensure in-store standards are being met and exceeded, as well as to provide competitive benchmarking from an unbiased perspective
- Customer Intercepts to gain insights into the customer experience and to benchmark for future initiatives
- Shop-Alongs to understand purchase drivers, particularly as related to to private label offerings
Combining these methodologies, as one grocer recently discovered, will provide on-the-ground and higher-level intelligence to avoid losing market share in the short term as well as shape future long term strategies.
Perhaps your customers are willing to spend a little more for the exemplary service you already provide and you have little reason to panic. Perhaps your customers are generally dissatisfied and are just waiting for a more cost-effective opportunity to jump ship. Or perhaps it’s somewhere in the middle.
You will never know until you put in the research to find out.
Learn more about the rapidly-evolving grocery industry in our 2016 Grocery Industry Report and keep up to date with the latest grocery happenings on our Trends blog.
