eGrocery: Making the layers matter
by Michael Smollan. eGrocery continues to challenge traditional retailers, with online sales expected to surpass $100 billion this year.Wednesday, 27 Oct 2021
by Michael Smollan. Unless you have been Elon Musk’s test pilot living on Mars for the past two years, or maybe five depending on where you live, you will have realised that not only is ecommerce the biggest disruptor when it comes to the physical shopping experience, the eGrocery phenomenon – with online sales expected to surpass $100 billion this year – will only grow. You cannot escape it and as the old adage goes, “If you can’t beat em, join em”.
FMCGs or CPGs of all shapes and sizes have come to understand that COVID has provided the perfect testing ground for food shoppers and if you’ll excuse the pun, they kinda like the taste of it. The challenge is to get to grips with how to win at the digital point of purchase as well as in-store, confusing to say the least. Whether it is direct to consumer, retailer e-tailer, marketplaces, or the ecommerce version of your local ‘Super’, the waters are undeniably choppy to navigate.
In our business we have been doing a lot of thinking around making sure we not only take advantage of the huge upswing in the trial of ecommerce grocery, but also in the longer-term as we work around keeping the lifetime value of a consumer. The truth is, winning in digital, particularly in the grocery sector, is not that dissimilar to the physical environment. Sure, there are different types of platforms that support different consumer needs or a variety of brands, but as long as you get a few basics right, there is real advantage to be gained even in the initial stages.
In a digital world, your shelf presence is even more critical as the consumer can’t feel, touch or even necessarily really see the product. It therefore requires rich content, action shots, hero images and all the visual data you can imagine a consumer may need in order to make a purchase. All the tiny pieces that we overlook in a physical world because of our senses.
The tricky part is the fact that a supermarket user manual doesn’t exist because it’s been the same for generations, and to be fair it’s pretty easy to work out. That said, the online shopping experience is quite different for each generation. Considering how to overcome these nuances as part of an online experience becomes critical. Boomers like to browse – they like to touch and feel. Gen X who has the largest spend per household of all the generations – is cost conscious and needs deals, coupons, and broadsheets. While Gen Z and below are digital shopping natives for the most part, and they need interesting, fun, sexy brand connections, and are not interested in the mundane.
Platforms hold value for traffic, but they are treacherous for grocery given the fine margins; while direct to consumer brand sites really hold little appeal given their small ranges. In some respects, it can be akin to buying a lottery ticket as picking the right route for a grocery brand can sometimes only reveal itself over time. For now, in South Africa there is the safe harbour of traditional retailers and the power they wield but trust me, the competition will come. Tech and VC funding will supplement the supply chain cost problem and they will start to compete more.
So, whose is currently making their mark? London’s Jiffy only founded in April this year, and operates a network of dark stores to do fulfilment, enabling it to offer the promise of “fresh groceries in 15 minutes”. Going after the full weekly grocery shop, Jiffy’s typical customer base are families and middle-aged grocery shoppers who have switched to their app from using traditional supermarkets. US-based goPuff, similar to Zulzi in South Africa, delivers things like medicine, baby food and alcohol 24/7 – basically the stuff you will buy at your local supermarket. In South Africa, other notable examples include YeboFresh, CheckersSixty60, and Online Pantry.
The point is a strategy, specifically for ecommerce grocery platforms is required and we can’t hide between traditional retailers forever. The basics need to be put in place – the hard detailed work needs to be done and from there the fancy stuff will evolve. The fun digital advances and experiences are all based off a boring, line by line, data driven engine. Without the hard work, the layers on top don’t matter.
Main image credit: Pixabay.com.
Michael Smollan is Chief Growth & Innovation Officer of Smollan. Smollan is a leading retail solutions company that delivers growth for retailers and brand owners across five continents by covering every aspect of how their brand is managed at the point of purchase, from field sales to in store and digitally. Smollan partners with brand owners and retailers to deliver accelerated growth by increasing reach, driving availability and visibility, increasing efficiency and delivering superior shopper experiences; operating across emerging and developed markets, in modern and general trade, and across physical and digital channels.
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