The U.S. population is expected to grow by 98 million from 2014 to 2060, and diverse populations are driving it. Hispanic, African-American and Asian-American shoppers have growing purchasing power. They are setting market trends, including a rising comfort level when it comes to digital interactions with brands.
These changes affect grocers and other brands who need to make sure that they stay up-to-date on not only the food trends that affect their inventory, but also the digital preferences that will enhance their overall customer experience. An identity-based marketing approach is critical for grocers to stay ahead of these changes in consumer preferences.
A growing, diverse population means change for grocers
The grocery retail landscape is being shaped by the growth of a multicultural society. The U.S. population is estimated to grow by nearly 100 million people in the next 40 years, and most of that population growth will be from “minorities, as well as in a growing mixed-race population.”
In the same way that all segments differ and have unique traits about their buying habits (for instance, it’s easy to see that moms shop differently than teenage girls), shoppers with different cultural backgrounds engage differently with brands.
For example, Hispanic shoppers tend to care about social responsibility: 57% of U.S. Hispanics are more likely to purchase brands that support a cause they care about (over-indexing non-Hispanic whites by 9%), and 58% of Hispanics are willing to pay more for environmentally safe products (over-indexing by 8%).
Minority shoppers are also more comfortable with digital interactions—in fact, most shoppers in these multicultural segments are already using digital channels to interact with their favorite brands.
For instance, 44% of the Hispanic population reads digital grocery flyers or circulars, and 35% of African-American shoppers use coupons on their smartphones at checkout.
With these growing populations also come growing opportunities to connect with them. How can you engage with customers in the right way? How can you be sure you have the right inventory for changing preferences?
The importance of identity for a multicultural society
Identity is critical for grocers. If you can identify your customers and know more about their backgrounds and product preferences, you can have more relevant conversations with them. With better identity management, you’ll be able to merge disparate data sets and have a holistic view of each person’s purchase history, online behavior and other key data points.
Then, depending on insights from that data, you can make the most out of your advertising spend by personalizing each interaction and offering products that are most relevant to each shopper.
According to a report from Acosta, 49% of Hispanic, 46% of Asian-American and 41% of African-American shoppers “buy grocery brands that are authentic to their ethnic heritage.” By knowing what type of food is relevant for each shopper, you can reach them with products that are specific to their unique purchasing styles.
There’s also a greater opportunity to build brand loyalty when you know who you’re talking to: 65% of African-American and 59% of Hispanic shoppers say that they’re passionate about their favorite grocery brands, which is higher than the overall population. So by reaching individuals with loyalty messaging that resonates with their interests, you have a greater likelihood of increasing repeat purchases.
Building up to an omnichannel approach
Some of the large players in the grocery market have sophisticated approaches to digital marketing. Walmart continues to expand their online delivery service, and Amazon shows no signs of slowing down, either. Their owned platforms let them know their customers intimately and deliver messages directly to those customers.
Target is another retail and grocery brand that has made strides in omnichannel marketing, particularly when it comes to reaching the Hispanic population. The brand realized that their demographic had shifted toward Hispanic, urban millennials who tend to be more brand-loyal than other segments, so they shifted their ad spend and approach. Their Spanish-only, social-focused “#SinTraducción” campaign, for instance, created conversations online with the Hispanic community. They also sponsored product placement within Jane the Virgin, a popular English-language telenova that follows a Venezuelan-American family.
Many mid-tier grocers, on the other hand, are falling short of their full potential. They aren’t using digital marketing to speak to their shoppers and prospects right now in a way that’s relevant to them. By continuing to build an omnichannel, identity-based approach to reach people of all cultures, even smaller players in the grocery industry can get in on the growth opportunities.
Get ahead with better identity
Accurately identifying your shoppers will better help you understand how they purchase in your stores. Once you identify your customers, you can start understanding each person’s individual wants and needs.
That leads to more relevant conversations across channels, which ultimately creates a huge revenue opportunity for grocery brands.
Interested in learning more about how we work with grocery brands? Visit our grocery page.