Convenience Economy grows grocery shopping online

By Alex Wörz, Chief Executive Officer, Mr D. For many South Africans, ordering goods online has become part of their daily routine – and not just for high income households purchasing premium goods. As more people opt into the convenience economy, the pool of online shoppers is becoming far more varied, as is what they’re choosing to buy, with groceries nearing the top of that list.

The shift in how people shop online is reflected in the Kantar eCommerce On 2022 study. Based on an analysis of shopper behaviour in 19 countries, the study found that 60% of e-commerce shoppers now use Rapid Grocery Delivery (RGD) services. And in South Africa, we’re seeing something similar. Better known as on-demand grocery delivery, this option has become increasingly trusted and adopted by South Africans. Why? The simple answer comes down to convenience and value.

Once reserved for luxury goods or high-income households only, on-demand grocery delivery has rapidly widened its local scope. Critical to this shift has been the way businesses have had to adapt to providing the convenience of delivery, while still offering products at in-store prices, or as close to those as possible.

Various factors contribute to achieving this parity, and in some cases higher value for customers. Here are three critical ones we’ve identified through our own business:

1. The Power of partnerships

Partnerships between businesses — especially homegrown ones — have real power to deliver value for consumers. By combining each partner’s strengths with the motivation to unlock more consumer value, partnerships can help on-demand grocery delivery move beyond simple convenience to providing exactly what customers want.

Take our recently announced partnership with Pick n Pay. Pick n Pay has a large national store footprint and an established track record as a high quality operator with deep grocery expertise. This established presence brings with it to the partnership a brand respected by many consumers, not to mention access to over 18,000 food and grocery products.

Mr D, in turn, brings deep expertise in building apps and leveraging technology, building from ground up compelling solutions to customers’ changing wants and needs, and in truly scaling delivery networks. These capabilities have taken years of investment and learning. By partnering, we have already achieved an almost comprehensive coverage of Mr D’s users at over 97%, with more than 300 Pick n Pay stores active on the Mr D platform in six months since going live.

2. Adoption through innovation

Fostering adoption of on-demand grocery delivery means finding innovative ways to provide value for money and time. It begins with convincing consumers new to the service that on-demand grocery delivery is worth the added fee — which in itself has been determined to be less than the cost of transport and parking at typical grocery stores. One of the ways we’ve done that is by making sure we provide products at the same price as in store. We have also ensured qualifying shoppers can earn eBucks or Vitality HealthyFood cash back rewards on their purchases.

Another useful approach has been to give customers regular access to free delivery codes or grocery vouchers when they shop through the app. There is also a lot of value to be found through the way we present products on the app. By adding useful new categories that help guide customers, we’re able to make the shopping experience easier and, quite often, more cost-effective.

Currently, shoppers can select back-up items should their primary item not be available in store for picking. The app already remembers your previous selections, making follow up shops increasingly effortless. As we progress in this space, we aim to make the online shopping experience much more efficient by personalising the experience and making it effortless to find what you want as quickly as possible. Embracing technological advancement to simplify and excite customers during their online journey is core to these plans.

3. Keeping consumer’s best interests at heart

The reach of on-demand grocery delivery in South Africa has massive growth potential, servicing large cohorts of South Africans. For many, the biggest obstacle to grocery shopping is the additional cost of transport. On-demand grocery delivery is able to overcome this challenge by operating at a competitive rate, which makes it a value-adding offering for many people to use it more often.

Making this viable is where collaboration is key. Combining the value chain infrastructure of a well-established delivery fleet such as MrD’s, with the reach and range of a retailer like Pick n Pay, we’re able to actively save consumers time, and money. The added benefit of not having to leave the house or transport groceries home, adds a further incentive of security into the mix. While grocery retail is a mature industry, the on-demand portion of it is still in its infancy. We will continue soliciting insights on the wants and needs of South African shoppers to continue innovating and iterating as this sector grows and matures.

In the end, delivering on these three ingredients makes for a win-win situation. As businesses, we’re able to support our operations while helping the economy to grow — all while delivering ever greater value to South African consumers across the board.

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