Capturing the online grocery opportunity

Opportunities online grocery
As e-commerce becomes a center of growth opportunities in the North American retail food, win over tech-savvy consumers depends on the fulfillment of the logistical challenges of online food sales coupled with an understanding of the needs and desires of customers. While pure-play online retailers have an edge with their business flexibility and speed to market, physical presence is still important to connect with customers. traditional food retailers can take advantage of their existing assets as they build their digital capabilities and improve their online offerings. Consumer product manufacturers will need to develop online strategies and tactics are specific to capture and share growth, ensuring leverage digital assets while integrating with the platform web retailer and go-to-market mobile phones.

In the end, the winner of the online grocery retailer will balance traditional and online capabilities, segments and penetrate most attractive market opportunity, and delivers seamless meaningful consumer proposition involved buyers. Win CPGs will combine online version of promotional and shopper marketing best practices of traditional with the new approach enabled by the digital world. There is no longer a question of whether to enter the online food sales – but how to build an online capability to capture customer trust, loyalty, and wallet.

Who’s buying?
The number of people who buy groceries online is increasing over the past year in all sectors. While some segments of the population buying online more than any other, an overall increase in the use of online groceries across all age groups, income levels, and regions. Some of the major trends including:

All age groups are embracing the online grocery. Buyers in the 25-34 age group (37 percent) had the highest percentage of buyers who say that they have bought groceries online, but penetration increased more than five times in some other segments. For example, a quarter of buyers 65 and older said they bought groceries online in the past year (see figure 2). Demographically, the urban population (41 per cent) and people earn more than $ 75,000 (22 percent) of online shopping is also more than the periphery and rural and lower income levels.

Buyer still use the website as a mobile grows. online shoppers use both websites and apps to shop for groceries, with some increased activity in social media, such as be a better choice available. However, among older buyers, the website continues to be the focus, while the non-selection for online shopping sites (such as applications and social media) are less popular. That said, as smartphone adoption continues to accelerate, we expect mobile and social to play an increasingly important role in groceries online. The challenge now there is for application developers to take advantage of mobile and social to create the experience more immersive and attractive to buyers.

Some of the old barriers remain – but they erode. Even as online grocery becomes more widespread, some old market growth obstacles remain. Nearly two-thirds of respondents said they would buy more groceries online if they can guarantee the quality and freshness of the product; 58 percent said that the price of competing better with people in stores and free or cheap shipping would also encourage the purchase online (see figure 3). “I worry about the freshness of the food,” said one respondent. “Who picked out?” As a result, the most popular online category is non-durable: personal care, beauty, food packaging, and baby food

That said, even as shoppers continued to express concerns about the long-lasting freshness, some of these views are softening. Andrew Nodes, head of business development at the East Main Instacart, online grocery delivery service, said, “Customer perception and action is a different customer. Customers believe that they do not have to buy durable online for freshness, but they really do. Durable among our best performing categories. “The bottom line is that the obstacles that exist online food market is starting to erode and will continue to do so as a buyer to gain experience and confidence to buy food online, and retailers continue to enhance their capabilities.

Buyers want value, but will pay for the convenience. When it comes to cost, many customers say they are still avoiding online grocery because of the perception that the cost is higher. Our respondents said they want savings – coupons (71 percent), compare prices between stores and other sites (67 percent), and loyalty programs (65 percent)

At the same time, they want the convenience and speed. Nearly two-thirds of respondents said they would spend more online if they offer convenient checkout and have the ability to quickly reorder items. In addition, many are willing to pay more for the convenience of not having to go to the store. Eighty percent of respondents said they are willing to pay for home delivery rather than going to the store for pickup – especially when it comes to same-day service – even the majority still visit the store to shop. Nodes comments: “We have seen [that home delivery is more to pickup] and had heard from traders that they had trouble with getting traction on a pickup.”

Mobile apps can enhance the store experience. Apps that enable price comparisons, the ability to search for and find items in stores, and scan for faster checkouts are cited as features that could increase in-store convenience and positively impact the shopping experience.