You might be preparing to start selling grocery items online. Or, like many grocers, you may be looking to migrate from your existing online grocery platform to a more agile and engaging extension of your in-store experiences.
Many online grocery buyers are looking to wield the power of choice in their ordering, reordering, pickup, or scheduled delivery experiences. All of them want the convenience of ordering on their preferred channel, and even though they aren’t entering your store, they want to feel like they are getting personalized services.
Digitally transforming your grocery sales experiences for the first time or taking them to a higher level is a big step. Yet it can reap great rewards and a competitive advantage over the long term.
This is where leveraging outside perspectives and expertise can speed up the process and help evaluate better alternatives. Digital is causing the current wave of disruption in grocery. Traditional retailers can and will survive, but the landscape looks very different five years out.
Online sales increased significantly during the pandemic, and many experts feel that consumers will continue to buy their household essentials over the internet for the foreseeable future. Online and “bricks and clicks” grocery chains have evolved to offer many options to shoppers who were reluctant to navigate the aisles of their local supermarket for health reasons and, in many cases, still are. Since international case counts are sometimes rising and subsequent waves are occurring, “post-pandemic” still seems premature to say.
Most food and beverage stores remained open during the pandemic-related shutdowns, but consumers expressed wariness about going into stores. Yet customer in-store hesitancy—which helped power a surge in online orders for delivery or curbside pickup in 2020—still persists in 2022. Convenience is a more important motivator for shoppers who order groceries online.
According to Statista, online grocery shopping sales in the United States grew from $62.2 billion in 2019 to $95.8 billion in 2020, and they predict sales to reach $187.7 billion by 2024 (US dollars). In many cases, grocery store merchandisers, cashiers, and other front-line staff received more appreciation than ever before during the first year or so of the pandemic. Many store employees switched roles from taking products out of boxes and putting them on shelves to boxing and bagging them for curbside, locker, or “designated area” pickup. The BOPIS (Buy Online Pick-up In-Store) era is alive and well.
As of August 2021, 38% of online grocery shoppers said they still avoided stores because they were nervous about COVID-19, according to a survey of 1,028 online grocery shoppers by Digital Commerce 360 and Bizrate Insights. But, in the same poll, 61% of shoppers cited “it saves me time” as a motivator. 57% of those surveyed said they purchase groceries online because they can shop at times convenient for them, and 46% said online shopping helps them avoid long lines at grocery stores.
Retail giant Walmart has cornered about a quarter of the US grocery ecommerce sales market ($27.1 billion in sales in 2020, with a forecast of $37.6 billion in 2022). Their closest competitors are Amazon (including Whole Foods and Amazon Fresh and Go stores) and Instacart(a sell-through channel for many grocers).
Yet Instacart takes over customer relationships, erodes margins, and establishes direct relationships with food and beverage brands, according to NielsenIQ. Many grocers and supermarket chains invest in online grocery store software to manage their online storefronts.
Physical Amazon retail locations reportedly see declining sales throughout the pandemic and reportedly have plans to close many stores. Although Amazon has introduced innovative technology like “Just Walk Out” contactless payment and price-tallying shopping carts, its in-store experience has struggled to gain traction beyond Whole Foods.
As grocery retailers move forward to whatever comes next in the pandemic, the most successful online grocers are those who are fast to market and focused on optimizing the end-to-end customer experience, including:
a) Simplicity in signing up for an account, picking up orders, and finding a local store.
b) Opportunities to personalize the experiences, such as subscribing to specialized services and offering customer surveys related to their preferred products and brands.
c) Various delivery and pickup options, including lockers, curbside, scheduled timeslots, and designated “click and collect” parking spaces.
d) Personalized services like creating and maintaining shopping lists for one-time or repeat orders.
e) Subscription-based deliveries of frequently used consumables like coffee or health and beauty products.
f) Support for loyalty programs integrated for in-store and online collection and redemption.
g) Pre-bundled items for promotional recipes or lifestyle choices like keto or vegan diets with nutritional information on products for adults, children, and pets.
h) Discounts for online payments before delivery or pick-up.
i) Personalized product catalog limited to include or exclude product categories and brands.
j) Saved payment details (within PCI security guidelines) to take the friction out of future purchases.
k) Real-time inventory visibility and smart recommendations for out-of-stock items.
l) Age validation for alcoholic beverages.
Successful online grocers need a scalable, secure, and flexible online grocery shopping solution that their customers can use on their preferred mobile or desktop device. You can get the best return on your grocery digital transformation investment in that solution by choosing a trusted digital transformation partner. Leverage the benefits of our products and our partnerships with digital platform vendors like Salesforce.com.
Our experienced team of ecommerce experts knows what it takes to establish your online grocery presence and implement strategies and practices that help you gain and maintain a competitive edge.
We expect that online grocery will continue to grow, making integrated retail even more critical for traditional brick and mortar retail operators, but one approach won’t fit all. Getting started is more accessible and more affordable than you might think when you have the resources of the OSF Digital team in your corner.
Each retailer and supplier need to find and maximize their advantage and develop a strategy defined by market factors to grow their most profitable customers. It’s not just about setting up an online grocery store website. Your goal is to establish a new, innovative sales channel where your customers are already taking their business. It’s up to you to meet them and their expectations of where they want to do business in the future.
Visit our Grocery Accelerator page for more information about how to extend your grocery sales and customer service channel with a proven platform and services that deliver measurable results and quantifiable value. Or check out our Grocery solutions page for success stories, service options, and more.