It was the mid-aughts, and the retail industry was at a crossroads. Up-start internet companies were radically changing the way consumers browsed and purchased goods while traditional retailers took a wait and see approach to online shopping.
Today, Amazon has a seat at the table because traditional department store chains were slow to build robust online shopping platforms. They could have leveraged their huge market share, distribution networks, advertising clout and branding to bury any upstart internet competitors. They didn’t, and now they stand on equal footing with a company that was a relative unknown just ten years ago.
The grocery industry stands at a similar crossroads today. Online grocery orders are 4 percent of the total U.S. grocery business, but that percentage is rapidly growing due to changing consumer habits.
E-retail adoption is nearly universal with people buying anything from airline tickets to diapers online, and while eGrocery is being adopted at a slower rate, a Booz & Company research report says that 54 percent of grocery customers have bought at least one item online—indicating that widespread adoption is right around the corner. But like Amazon ten years ago, web-only businesses are jumping into the eGrocery market. Fresh Direct, Google, and Amazon, the original e-retail disruptor, have all launched online grocery shopping in the past several years.
Online retail is the future for grocers
Traditional grocers have always been leery of selling fresh groceries online due to high delivery costs and complexity of the supply chain. However, wide adoption of omnichannel commerce that mixes online and in-store experiences with delivery, drive-though and buy-online-pickup-in-store shows that online retail for the grocery domain is inevitable.
However, its consequences, opportunities, and threats still remain largely unrecognized even by big players. Grocers need to develop a robust omnichannel strategy supported by a scalable eGrocery platform that they can use to provide consumers with an integrated, personalized user experience across all channels, giving them the flexibility to shop and consume grocery-related content anytime, anywhere on their preferred medium–whether that is in store, on the web, or with their mobile devices.
This omnichannel strategy would also give grocers a 360-degree real-time view of customer behavior— and product inventory across the supply chain, allowing them to create targeted marketing and personalized promotions to drive customer behavior and maximize returns. This is the biggest advantage traditional grocers have over web-only services.
Data collected and analyzed from engagements in store and online gives grocers valuable insight into user behavior they can use to cross- and up- sell, create custom promotions, implement variable pricing, enhance product search and better manage inventory systems in real-time.
If we have learned anything from department store conversion to online retail, it is that late recognition of the problem and slow adoption of digital strategies by traditional retailers represents a huge risk–not only in terms of missed opportunities but also for business survival.
