The Meteoric Rise of E-Commerce Grocery, and What it Means for the Future
It’s no surprise that shopping for groceries online saw a major upswing in the past year and a half, but what may be a revelation is the number of shoppers who plan to continue using this service indefinitely. According to a study by Deloitte, 90% of e-grocery customers said they plan to continue to shop online, while only 7% will return to brick-and-mortar stores. We’ll cover what this means for the grocery industry and how, with a few simple changes, your store can be well equipped for the new normal.
E-Commerce Grocery by the Numbers
Before the global pandemic hit in 2020, U.S. online grocery sales totaled $1.2 billion. By June of the same year, those sales had increased to $7.2 billion. Over the same course of time, online grocery shoppers increased in number from 16.1 million to 45.6 million, according to Forbes Magazine. The significant growth of online grocery likely comes as no surprise–as the pandemic sent students and many workers home and strict shelter-in-place requirements were implemented, many shoppers looked for safer ways to attain their groceries. What’s more surprising than the dramatic increase in e-commerce grocery sales between the beginning and mid-point of 2020 is the way this digital industry has maintained growth in the months and year following. According to a study by Mercatus and Incisiv, it is predicted that online grocery will continue to grow, becoming 21.5% of total U.S. grocery sales by 2025. “This comprehensive survey proves that COVID-19 has fundamentally changed the way shoppers approach their grocery options,” says Sylvain Perrier, CEO of Mercatus–and those changes aren’t going away any time soon. Although change is never easy, this shift may be good news for grocers across the country. Even for retailers that choose to eschew online sales altogether, these drastic shifts in the market are creating new opportunities for experimentation, growth, and improved customer trust across the industry.
Online Grocery and Brand Loyalty
According to the study by Mercatus and Incisiv, a majority of online shoppers have remained brand loyal, despite the move away from brick and mortar stores. Even when faced with greater options in the digital space, most shoppers chose to continue to order from the retailers they frequented pre-pandemic. This insight into customer loyalty to a brand, and even a specific store location, can help grocers across the industry make decisions about how to maintain client trust. According to Perrier, “The growth of online grocery in 2020 and its predicted long-term impact, coupled with customers’ continued loyalty to brick-and-mortar, makes it clear that these avenues must complement each other in creating great customer experience across a grocer’s entire brand.” Although Perrier encourages grocers to “bridge both online and offline shopping journeys,” companies that chose not to offer online options can still tap into the deep brand loyalty held by their customers. It’s no secret that customers want to feel like a company cares about them. One way in which brand loyalty can be developed is by adopting new protective measures in stores to minimize the risk of COVID-19 transmission. By taking tangible measures to ensure shoppers’ safety, brands can improve loyalty and grow trust with their customers. The years 2020 and 2021 have also shown an increase in social awareness, particularly in the areas of employee care and recognition. Retailers that can show they are providing a competitive wage or offering other benefits to workers, as well as adding jobs during a difficult time, will be able to strengthen their relationship with clients.
Brick-and-Mortar Changes
Ultimately, what does all of this mean for the in-person grocery experience? By and large, there is now an opportunity for retailers to implement a wide variety of changes and reinforce successful measures in order to grow client trust and increase sales.
A. Adding Cabinetry and Signs
For some stores, change will come in the form of adapting physical spaces. Many grocers have added cubbies and coolers to be used by curbside, delivery, and third-party shoppers. Retailers may also require signage both in store and outside, particularly to designate reserved parking areas for curbside pickup. When it comes to adapting physical spaces, some retailers are even choosing to implement “dark stores” that are set aside online-fulfillment shopping only. Finally, as the changes wrought by 2020 are settling in, retailers may consider installing more permanent health stations that include wipes and cleaning options for carts, hand sanitizing, and even masks.
B. Simplifying Flow
Clearly, the growth of online shopping is a symptom of customers’ needs for safety and expediency during these uncertain times. Research shows a clear decline in the amount of time customers spend in store, even though they are purchasing more than ever. Grocers that have chosen to direct resources towards alternatives to online shopping will still need to consider the changing patterns of the modern shopper. Customers now are looking for a friction-less experience, where they are able to move easily throughout the store without bottlenecking or having to break social distancing protocol. These expectations may require grocers to reimagine the layout or flow of their store: widening aisles and space at registers, designing a space that funnels shoppers in a particular pattern, or even designating a directional path or one-way aisles.
C. Prioritizing Staples
To achieve ease of use, grocers across the industry are also reimagining the organization of their stores and stocking priorities. For example, end caps that used to display new or experimental items are now often filled with staples and customers’ go-tos in order to make shopping easier and faster. Stocking as a whole has shifted with customer priorities–shoppers now are looking for the same reliable products each week, instead of wandering the aisles looking for new things to try–and retailers have followed the trend, emphasizing shelf-stable and high-selling products.
Whether grocery retailers decide to take advantage of the online shopping trends or tap into customer loyalty through other means like low prices, product quality, employee recognition, or health and safety measures, there is no denying that a significant shift is underway in the industry, requiring change across the board and opening new opportunities for growth and customer loyalty.
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