Getting a head start on e-grocery
- November 23, 2018
- By: Brian Ross
- Type: Blog
In 2018, the TABS Analytics Sixth Annual Food and Beverage Consumables Survey found that only 17% of consumers currently shop for groceries online but go to a physical store more than six times a month. Given all of the trend stories about the rise of grocery e-commerce, that’s a shocking statistic. Some people may say it’s evidence that the rush to online is overblown. That misses the point entirely.
Yes, the majority of grocery shoppers still do their shopping in-store. But if you look at the rapid growth of digital and mobile purchases over the past few years, all signs indicate that the trend is changing–and quickly. Look no further than venture capital investments in grocery delivery for proof: They’re already more than $3.5 billion.
Remaining skeptical about the importance of online shopping is convenient, but not a solution. To succeed, you need to get started now. Here are a few things to keep in mind:
Be there first
It may sound simple but being the first of your competitors to offer a convenient, easy-to-use e-commerce experience could have serious long-term effects. Generally speaking, once shoppers have found an online shopping destination that meets their needs, they stick with it. Look no further than Amazon’s rise as an example of that principle in action. The company was an early adopter that took over the entire space by getting to know its customers and leveraging a strategy that prioritizes retention. Its success was built on great prices, convenient delivery and a seamless experience along every step of the shopper journey.
Most shoppers are likely to shift more of their grocery spend online over time, which means establishing your brand now as their preferred destination will be beneficial into the future.
Personalize the experience
Consumer expectations for online shopping are incredibly high. To meet them, your e-commerce platform has to be easy to use, but also personalized to each customer. Leveraging shopper data is the key to delivering here. Shoppers don’t like being bombarded with upsell suggestions and irrelevant product recommendations. Instead, you should take advantage of recommendation engines to develop living shopping lists for each customer that automatically adjusts based on how they shop.
Personalization should also carry into pricing, promotions and communications. Consider offering individual, lower prices to drive specific products. Send digital coupons for items you know shoppers will find valuable. Using relevant email and mobile push notifications to surprise and delight can add true value to customers’ experiences.
Get over the trust barrier
The biggest e-commerce hurdle for grocers will be the shopper trust barrier. Consumers are confident about buying such items as books and electronics online because they know exactly what they are getting for their money. Grocery is different.
Shoppers are used to being able to touch and smell fresh products in-store to ensure they get what they want and the best quality. You obviously can’t replicate that experience online, but you can take steps to help your customers feel confident ordering fresh ingredients online.
Through personalization, retailers can curate an e-commerce life cycle by guiding the customer to shop more and build trust. A great start is encouraging shoppers to buy centre-store nonfood items (paper towels, diapers, etc.) and then progress to shelf-stable products that don’t carry the same concerns about freshness and have established brand power. For a start, grocers can target high-potential e-commerce shoppers with personalized promotions and offers for trying/buying these products online. The other anxiety and trust barrier shoppers have about online shopping is timing and speed of delivery. To build trust, consider offering guaranteed on-time delivery.
Once customers start shopping online, trust will build over time, so long as you go out of your way to earn that trust and guarantee satisfaction. This means ongoing fast and on-time delivery, as well as great customer support and a money-back guarantee. Once that trust is established, many shoppers will eventually make the leap to buying fresh online. When they do, make sure it is fresh, ideally as much if not more so than what they’d get in the store–and be willing to stand by quality with guarantees.
Hema Fresh, Alibaba’s supermarket in China, is primarily focused on selling fresh food both in-store and online. To boost shopper confidence, everything the store sells has a barcode, which shoppers can scan to trace the product’s origin, nutritional information and expiration date. The business model ensures products travel from farm to customer within a 24-hour window, guaranteeing freshness. Customers can also pick fresh and live seafood, and have it cleaned and cooked in-store, or they can order fresh food online and have it delivered within 30 minutes (in a 3-kilometre radius). With this Fresh model, Hema drives a 60% online penetration versus a 3% average in China.
We may never reach the time when all grocery shopping is done online, but it’s a safe bet that e-commerce will continue to make up a larger portion of sales as we go forward. That means the time to invest in your platform is now–and you need to get it right from the start. If you don’t, you’ll risk playing catch-up for the next decade (or more).