Digital grocery shopping has completely changed the grocery game. For better or for worse, local and long established grocers are now competing with, a new category of competitors who are born out of the ‘direct to customer’ era. These new age grocery and niche grocery players ship everything from fresh dairy and organic meats to their own white label paper goods. With so much choice and category confusion it’s increasingly important for grocery retailers to invest in shopper loyalty and keep shoppers coming back and building their baskets.
A recent RichRelevance study into online grocery uncovered 59% of UK consumers and 63% of US consumers choose to shop online because of time saving benefits. Yet, for those of us with experience in shopping online, we know this isn’t always the case.
RichRelevance has uncovered through our experience working with a number of global grocery retailers, that there is a positive correlation between saving a grocery shoppers’ time and the ultimate size of their basket. The faster a shopper can locate the items they want to buy, the more likely the order will not only be completed but that it will be of a higher value.
The grocery sector presents some unique challenges for digital marketers impacting their ability to build profitable and sustainable online growth. From complex and expensive logistics, to an exploding ecosystem of ‘direct to customer’ competitors, already thin margins are being squeezed even further. However, with a wealth of customer data and insights, there is an enormous opportunity for grocery retailers to utilize technology and AI to strengthen the level of service they offer to their customers.
Given the personal nature of food and consumer goods preferences, the grocery sector is perfectly poised to introduce highly personalized experiences that stimulate better and more intelligent upsell, conversion and loyalty. Yet, digital grocery shopping presents many unique challenges for grocers that make it far more complex for grocers to transform the digital experience, than for their retail cousins. As a result of the nuanced challenges, digital grocers will never operate as ‘simply’ as most other ecommerce areas.
There are two contrasting trends emerging in retail – fast and frictionless verses experiential and time well spent.
Recent technological advancements in retail have focused on speeding up the customer experience, making it as efficient as possible, especially around the checkout; as we’ve seen in the Amazon Go stores, where it’s been eliminated completely. In contrast, the growing experience economy has placed greater emphasis on the notion of ‘slow retail’ – slowing down the shopping experience by creating even more ways for shoppers to engage with brands in a way that goes beyond transactions to memorable experiences. Think REI and their in-store rock face or Sweaty Betty and their in-store fitness classes.
Data Privacy and Consent Implications for Retail
With the laws tightening around opt-in consent from consumers impacting on marketable databases for retailers, it’s hard not to be pessimistic about the effect on the retail industry’s bottom line.
Retailers have not only seen their marketable databases dwindle, but they potentially lose valuable insights and data intelligence on their shoppers’ behaviour and preferences, essential to continually improve and optimize their efforts.