Grocery shopping was transformed in 2020 as the pandemic drove a massive acceleration in digital ordering and online delivery. Purchase behavior may have been impacted forever as consumers continue to use different digital services to buy different goods.
“With grocery shopping behaviors in 2020, people tried a lot of new services for the first time like Click & Collect for instance,” said Orchid Bertelsen, Head of CX Innovation at Nestle USA. “People have tried new services around grocery shopping and so their behavior might be more fragmented than ever before because you are not just going to make one trip to a single store. You may go to Costco for your bulk items, you go to Kroger for standard pantry items and you go to Whole Foods for groceries.”
Even as the vaccine becomes more widely available and consumers are more comfortable going back to the store, their digital adoption is likely to continue further fragmenting the grocery shopping experience this year.
“As things continue to open up, you are going to see this continued fragmentation when it comes to how people acquire their groceries, which is becoming a very interesting space because now instead of a couple of common consumer journeys, you may have infinite consumers journeys,” said Bertelsen. “And I think planning through that and finding where your brand can be most helpful is going to be really challenging.”
Bertelsen will be speaking about these issues and how brands can innovate in this new year on the first day of our three-day Brand Innovators 2021 Kickoff Summit next week. We caught up with her before the big event to discuss what she is up to at Nestle, what CPG will look like this year and what viewers can expect to see in her session next week.
What key initiatives are you working on in 2021?
The charter for my team is really to improve the consumer experience through technology. We have quite a few things we will be launching in the coming months. For 2021, we have quite a few things on the docket. We will continue to push in voice technology. We are very interested in social commerce. Through COVID, you have really seen that acceleration in the growth of online grocery and changed consumer behaviors in some sense making people more comfortable with shopping for groceries online.
Social commerce has been something that has been under development for a few years now, where you are really making your engagement so that it is more shoppable. Groceries have always been a challenging space because people tend to build baskets rather than buy individual products, so that is something that we will continue to focus on and to test this year.
What will CPG look like this year and how is this impacting how you are creating customer experiences?
Through 2020 user behavior and consumers have really adopted more technology into their lives, technology and ecommerce, largely because they had to. So we really saw the pendulum swing really far in giving us a peak into what a primarily digital future can look like.
Now that we have a vaccine and as things start to open up again we don’t expect that consumers will continue to adopt technology at the pace that they did in 2020, but we do believe that some of those behaviors will stick. So it is more important than ever for the consumer experience to be completely seamless and frictionless.
Consumers have a higher expectation now when they want to do something, especially digitally, that it is just going to magically happen. There is less of a consumer tolerance for any kind of friction in their overall experience or specifically in their path to purchase.
As digital experiences become more core to the customer experience at home, how do you measure innovation?
The way that we measure innovation is really about the idea of ROI but not in the traditional sense. For us, it is more return on insights. For innovation, timing is everything. If you test too far in advance, you might not get great performance just because consumer behavior hasn’t changed quite yet. And so timing really is a part of innovation. If you are testing something where you are measuring it based on whether or not it is going to be a very strong alternate revenue stream or drive strong return on investment, then maybe you aren’t pushing it far enough. Innovation is really about a test and learn mentality that we talk about quite often, which is we have this hypothesis and we are going to build a solution that solves a particular consumer problem. Now it is our time to start testing that and see what resonates and making optimizations. So with innovation, nothing is ever one and done, it is absolutely an ongoing process.
You have spoken in the past about how innovation should go beyond product. What do you mean by this?
For a lot of large food and beverage companies or more incumbent CPGs, innovation really speaks to product innovation, flavor innovation, maybe it is packaging, maybe it is format, but all of the innovation is around the product itself. For us and our team, which is focused on digital innovation, it is about innovating on that consumer experience, because the way that consumers interact with your brand is far beyond when they directly engage with the product itself. So the innovations that my team is focused on is building digital services and platforms that enable a better consumer engagement with the brand. So when we talk about solutions, we are talking more about technology solutions or opportunities where it makes sense for one of our brands to solve a consumer problem far beyond the product that they hold on their hand.
You are speaking at our kickoff event next week. What are some key things readers should look out for in your session?
I will be speaking with Kat Cole [Outgoing President & COO, Focus Brands] who is literally one of my favorite people. We have been having this conversation about the new house of brands and what that looks like.
2020 saw a lot of mergers and acquisitions and just a lot of activity in standalone brands being a part of house brands. She and I speak quite a bit about shared technologies and shared services. How does a house of brands act versus a branded house. And that is a debate that large companies have been having for years. We will speak to some pros and cons, some things like technology that really enable and build the foundation for discreet or disparate brands to operate in a more efficient and impactful way.
