New routines for a new reality: the boom in e-commerce and its impact on grocery
Will grocery e-commerce stay the same?
It used to be that it was the most natural thing in the world to drive to the store, get one item after the other from your shopping list, get enticed by some additional things, pay for your stuff, and go home. In 2019, most grocers were seeing e-commerce penetration in the 1% to 3% range – nothing to get overly excited about.
But as the pandemic hit, online shopping and grocery delivery – or pick-up in store – suddenly became widespread, simply because it was safer. Within weeks, e-commerce volumes exploded, growing to around 10% of total grocery sales by the end of 2020 in many regions. But will this growth continue even after the danger of COVID-19 comes to an end?
Experts say yes. Many consumers, who possibly would never have thought of ordering groceries online before the pandemic, have now learned that online grocery shopping is not only safer, but more convenient. In many households, the old shopping list has been replaced by the virtual shopping cart – including practical reminders, recipe suggestions and much more.
The virtual shopping experience turned into an everyday habit. As a result, experts anticipate post-pandemic grocery e-commerce penetration to range from 15% to 25%. And this substantial increase requires grocers to restructure their supply chain networks.
The power of knowing what’s on whose shopping list
Grocers need to learn quickly, actively seeking feedback from their consumers and adapt to it. But while feedback is important, access to consumer and order data is vital. Full data capture is the holy grail for future growth.
Firstly, it allows for more personalized consumer experiences: knowing exactly what is happening with their order and when it will be fulfilled creates trust and customer loyalty. Secondly, the result of data visibility and control is better forecasting and replenishment algorithms for grocers, putting them in a position where they can create greater efficiencies in their supply chain. But to take advantage of that data, grocers first have to find the right strategies to get the whole picture. Automation on both the front-end and back-end, from UX design to order fulfillment, provides the data to future proof business operations.
Time to ramp up e-commerce for a new reality
Now is the right time to not just react to changed circumstances, but to strategically plan for future growth. Delivery companies such as InstaCart and Shipt have quickly dominated e-commerce sales for grocery stores. Their shoppers are packing aisles, creating frustration among regular grocery consumers.
Delivery companies are giving grocers themselves an even bigger frustration – they own consumer data, which prevents grocers from tying e-commerce purchases to specific users. To get the full data capture and make use of it, grocers must find a way to bypass the delivery companies. And the best way to do that is to offer their consumers the same service – but on their own platform that is closely linked to their own stores.
And how about that good ol’ shopping list? Are we to bid farewell to pen and paper soon? Probably not. But more and more, those lists are likely to be on our phones and computers as e-commerce creates new routines for new realities.
The role that Dematic plays
Dematic industry leading technology provides the automation to future-proof the grocery supply chain. Differentiated by the wide range of solutions offered and both global and local services to support them, the company considers each project as a partnership – one focused on customer success. So, Dematic not only works with its customers to find the right solutions, it also provides the help and expertise to ensure the value of those solutions, from software, hardware, and the people to support them.
Download the Automation Playbook to learn:
- Why traditional retailer fulfilment strategies don’t offer the flexibility to meet unprecedented consumer demand
- How retailers can future-proof their businesses from unexpected disruptions by making strategic investments in automation
- What are the critical factors for consideration when selecting an automation provider