eCommerce & Merchandising

Why online grocery is the next frontier in eCommerce

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The following is a guest post by Brian Fetherstonhaugh, Global CEO & Digital Marketing Expert/Speaker.

Omnichannel. Multichannel. Convergence. Continuous Commerce. Whatever you call it, the seamless integration of end-to-end experiences across multiple channels is the prize, and one of the biggest untapped opportunities in eCommerce lies with online grocery.

US online grocery sales reached $6.5 billion last year, accounting for 1.2% of today’s market. But in 10 years, online shopping will account for as much as 17% of all grocery sales. Despite its growth, online grocery shopping has not exhibited the same levels of growth and engagement as the retail industry at large: 92% of survey respondents reported having the option to online shop, while only one percent actually consider this as their major mechanism for grocery shopping.Supermarkets must plan for the future, especially in the face of increased competition from warehouse clubs and drugstores.

Up until now, grocery retailers in the US have been reluctant to invest heavily in multichannel digital marketing and customer engagement activities. Some have used third-party enabling solutions to give them a digital foothold but retailers globally have struggled with the basics of running a profitable online grocery business.

AmazonFresh and Walmart have started to address this and are driving significant uplift with their own unique propositions. Retailers recognize that times are changing and that they need to position themselves more advantageously against the competition. The physical and digital worlds have converged, and major advances in technology and science have created disruption in grocery retailing.

Eighty-five percent of Americans still think grocery shopping could be better. As they have become more empowered and digitally enabled, they expect more from retailers. They demand commerce experiences that are seamless. They want fast, rewarding, personalized – and they want it all at once. They want retailers who will engage with them on their own terms and deliver superbly over and over again.

Leaders in eCommerce agree that the key to success lies in three engagement principles:

  • Provide anytime, everywhere access to products and purchases and information and services across digital and physical environments
  • Ensure seamless, consistent, individualized experiences with the brand, across and within all touchpoints
  • Build trusted, mutually beneficial relationships that go beyond one-time transactions

Grocery shopping is already part of consumers’ daily routines. If a grocery store could provide an experience that makes the daily routine easier, more convenient and more enjoyable, people would continue buying from that store. And they would buy more.

Imagine if shoppers got reminders from the grocery store about special offers, possible savings and recommendations based on their shopping history. What if they were able to review freshness ratings and were given the option to pickup in-store so as to save time and money? What if shoppers were notified whenever someone else in their household started a new shared grocery list, allowing them to add items?

Now imagine allowing shoppers to ask retailers questions, and sending them special recipes and ideas. And letting them redeem coupons as they check out online. When they choose to pick up their groceries, their pick-up time is confirmed. And when they arrive at the store, they receive more special offers. After shoppers receive their groceries, they can subscribe to receive certain items on a regular basis, making their lives even easier.

If stores could provide omnichannel solutions that are synched to the rhythms of daily life, they could deliver personal experiences and become a meaningful, valuable part of consumers’ lives. The result would be long-lasting and profitable relationships. And since even a 5% increase in customer retention can increase profitability by 75%, the time for retailers to get started is now. The next frontier in eCommerce awaits.

This article was originally posted on LinkedIn.

About the author:

As Chairman & CEO of OgilvyOne Worldwide, Brian has a unique vantage point on how brands are built, how corporate cultures are created, and what happens as the world goes digital. He is a frequent lecturer at distinguished institutions including Yale, Harvard, MIT Sloan School, Columbia, and McGill.

In the course of the past 25 years, Brian has worked hands-on with many of the world’s leading brands, including IBM, American Express, Cisco, Coca-Cola, BlackRock, Ikea, Unilever, and Nestlé. He’s spent over 20 years in marketing, on the client and agency side.

Born and raised in Montreal, Brian graduated from the McGill University business school. For over 15 years he has been a Board Member for Goodwill Industries, a not-for-profit organization, for the Toronto, New York and Worldwide Boards. Brian plays hockey every Sunday night and plays guitar and harmonica for a rock band called Plan B.

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