How Grocery Retail Innovations Change Customer Behavior

Research into new in-store amenities, digital shopping formats, and partnerships reveals their unexpected costs and benefits.

- By Stanley Frederick W.T. Lim

Grocery retailers are racing to reinvent the customer experience. As omnichannel shopping becomes the norm — with 90% of consumers now purchasing food through both online and offline channels — grocers are deploying new tactics to attract shoppers, build loyalty, and drive profitability. But do these customer experience investments actually pay off?

My research partners and I examined three specific tactics that grocers are increasingly adopting: adding experiential services like bars to existing stores, partnering with third-party delivery apps like Instacart, and launching delivery subscription programs. Through our research, we uncovered how each strategy affects customer spending patterns, hidden operational costs that many retailers overlook, and unexpected benefits that can significantly impact the bottom line.

Our findings challenge conventional assumptions about these popular strategies. While grocers expect straightforward returns on the millions of dollars they invest in customer experience improvements, the reality is more complex. Some tactics deliver surprising windfalls in unexpected areas while others create unforeseen operational burdens that can erode profitability.

Here, I'll share strategic recommendations based on our research insights to help grocery managers make informed decisions about which customer experience investments will deliver the greatest value for their specific operations and customer base.

Boost in-Store Experience With a Bar or Restaurant

Since the pandemic, grocery retailers across the country have placed an emphasis on revitalizing the in-store experience to reconnect with their customers. One of the most common tactics grocers are deploying is the addition of a bar, restaurant, or cafe to an existing store.