GUEST COMMENT How online is keeping the grocery industry fresh
A dramatic shift in consumer behaviour is revolutionising the grocery industry with almost half (48%) of Brits now claiming to do their food shopping online. Amazon, launched its grocery delivery service, AmazonFresh, in London in June and the importance of an advanced digital offering will only increase as retailers such as Tesco and Asda continue to take steps to boost the number and quality of the digital experiences they provide. To thrive in this rapidly changing marketplace, grocery companies must take action to update their strategies and rival their competitors by offering dynamic online experiences to shoppers.
The adoption of new technologies is a key differentiator as the major supermarkets battle for market share. Earlier this year Tesco became the first British retailer to sign up to IFTTT (If This Then That), a service that allows customers to connect separate platforms in such a way that an action on one automatically triggers a reaction on another. This could be as simple as ordering a product when it drops below a certain price level, or at a specific point in the month or year. It could also mean linking to a weather app to ensure barbecue items are added to a shopping basket if the sun is shining, or to a health app to order a chocolate-based reward when fitness goals are met.
This automation of the weekly shop is just one of the many opportunities becoming available to grocery brands, so what other online shopping approaches can marketers use to keep the grocery sector fresh? Influencing the customer’s journey
There is a perception that online shopping reduces impulse buys as the consumer is less likely to see enticing products and place them in their trolley. However, grocery brands can turn this around and use technology to engage individual consumers and encourage more spontaneous purchases.
Supermarkets have worked hard to monetise the in-store shopping journey, offering numerous opportunities to disrupt the consumers’ chosen pathways and engage them along the way, such as point of purchase displays and free samples. The online space offers marketers just as many opportunities to reach consumers, if not more. Retailers are empowered to guide shoppers on a dynamic journey, placing related products together that would probably never be displayed alongside each other in a physical store. Customers searching for paddling pools or children’s swimwear could be reminded to order ice cream and sunscreen, while those placing frankfurters in their basket could be offered bread rolls, onions, ketchup, and beer.
Far from limiting impulse buys, this outcome-based technique increases the number of items in the shopper’s basket and enables more effective cross-selling with relevant products that would normally be located in separate departments in store. Offering instant gratification online
With online shopping, retailers can struggle to replicate some aspects of the in-store experience and one of these is instant gratification. If a customer decides they’d like a glass of wine with their dinner that evening, or spots a favourite movie in the TV schedule and wants crisps or popcorn to accompany it, online shopping has so far been unable to fulfil those needs.
But advances in online shopping – such as Morrisons’ partnership with Amazon – are changing that. Following the success of AmazonFresh in the US, consumers in a number of postcode regions in London are now able to place an order and have it delivered the same day. This fulfilment window will only continue to be decreased, offering grocery brands a huge opportunity to increase sales by instantly fulfilling consumer cravings.
The ordering process is becoming increasingly easy too, with services such as the Amazon Dash button empowering one-touch reordering of items that are running low. By using these devices, customers can benefit from the constant restocking of their most important groceries, with minimal effort, while brands reduce the risk of losing their audience to competitors’ promotions and deals. Along with click-and-collect, which allows consumers to receive their chosen items at the best time and location to suit them, these services give the consumer control over their shopping journey and ensure it takes a route that meets their daily needs.Connecting the dots between online and offline
Despite the continued acceleration of online shopping – already growing 13% this year – the majority of grocery sales still take place in-store. This makes it imperative for brands to connect online and offline interactions, for example understanding if a consumer’s online research has an impact on their offline purchases and vice versa.
Loyalty card programmes and e-receipts have traditionally been used to link online and offline interactions but there are limits to the information these provide. Innovative new solutions – particularly mobile apps – offer marketers deeper insights into consumer behaviour and allow them to join the dots between online and offline. Waitrose’s mobile self-scan provides consumers a useful tool that has a positive impact on the shopping journey, with a view to empowering marketers to deliver tailored offers in the future.
Supermarkets are also utilising beacon technology to reach consumers in-store, when they are most likely to make a purchase. By using low energy Bluetooth, beacons empower supermarkets to share geographically relevant information to customer’s smartphones while they browse the aisles and gain valuable insights, providing previously immeasurable data on how customers behave when shopping offline.
As the inevitable consumer shift to online continues, grocery marketers need to understand the needs of consumers who require convenience above all else. Supermarket shoppers are now buying fewer items, more frequently, and require high levels of choice whenever and wherever they choose to shop.
Retailers must embrace new and developing technologies to enhance shopping experiences while also influencing purchases, boosting revenue, and gaining an advantage over competitors. Ben Cooper is managing director, Europe at HookLogic