Ecommerce: Are you getting enough bang for your buck?

Published May 17, 2022

Ecommerce is the latest big trend to hit the grocery sector. Everyone who is anyone is doing it. With eCommerce projected to expand to $1tn by 2025 businesses will need to ensure that their platforms can keep pace with the growth.  However, not all eCommerce platforms are created equally. If you choose a provider who does not give you control over your brand experience, then you could be missing out on a great opportunity. Your eCommerce solution will be lackluster, inefficient, and ineffective. Most importantly of all, you may struggle to keep your customers loyal to your brand.

Ecommerce – latest trends

Total eCommerce sales for 2021 were estimated $870.8bn, an increase of 14.2% over the previous year according to data from the US Census Bureau. Grocery sales will grow to make up a considerable portion of eCommerce.  By 2026 eCommerce is predicted to make up around 20% of all grocery sales compared to its current level of 9.7%, according to data from an Incisiv study. That’s a marked increase from predictions before the pandemic with sales coming in via a range of channels, including online delivery and in-store pick up. 

The pandemic tended to accelerate trends that were already in development. Lockdown restrictions and a natural desire to avoid face-to-face contact pushed many customers who might have previously been more resistant to eCommerce to revisit that shopping option. Grocery stores that might have been reluctant to implement – either due to cost or security concerns – had little choice if they want to keep up with customer demand has had to act up by incorporating buy online, pick up in-store (BOPIS) or delivery.  Whatever the motivations behind the move, both store owners and their customers have seen the benefits. They have enjoyed the additional flexibility and convenience eCommerce brings, which means store owners and their customers will continue working in this way even once the threat of COVID-19 has receded.

A number of platforms have emerged and matured that help businesses integrate eCommerce. They provide the infrastructure, the technology and the expertise to make eCommerce work.

However, there is a problem. Not all ecommerce platforms are created equally. They vary in terms of how they work, the features they offer and how much control they give you.

Ownership of the customer experience

The most important thing to consider with a grocery eCommerce platform is the impact on your customer experience. Your customers who come to your stores chose you for a reason. Whatever that reason is, you need to carry that on into the digital environment. That means a full control over your branding, your messaging, and every aspect of your interaction with your customers. That way, you can mirror your in-store experience.  A great way to do this is with your own eCommerce site, over which you have full control. It comes with your own branding and your own messaging. All interactions are your own and are under your control.

When looking for an eCommerce provider, you may have noticed, some platforms are generic and inflexible. Without a white label app option, it becomes much more difficult to put your own unique stamp on the process.

Grocers miss the opportunity to maintain their engagement with customers and may find it more difficult to deliver promotions, pricing and other loyalty schemes – this inconsistency is a major miss in many ecommerce solutions today.

Online shoppers have come to expect a seamless multi-channel offering in which the in-store experience is mirrored online. Generic ecommerce solutions don’t offer that. On the other hand, anything which allows you to tailor your experience will bridge that gap.

Related: The state of ecommerce in 2022

Control over brand loyalty

Generic ecommerce providers also limit control over brand loyalty. Many will not give you full control over pricing and may limit your ability to make special offers or run personalized promotions.

Personalization has become pivotal to brand loyalty. Twenty years ago, Amazon’s founder, Jeff Bezos said:

"If we want to have 20 million customers, then we want to have 20 million 'stores.' ... Our mission is to be the earth's most customer-centric company."

He recognized the value of personalization. Advances in technology and the ability to have complete control over Amazon would enable his company to ensure everyone’s brand experience of Amazon would be slightly different. Today when you log on, you’ll be presented with options which are based around your previous activity on the site. That includes suggested products and personalized offers.

For example, if you have control over your customer data—which you don’t with marketplace-style ecommerce options— you can develop personalized loyalty plans and special offers which are designed specifically for that customer.

If you do not have the same control, it will be difficult to get a competitive edge. The customers will be given a two-dimensional brand experience in a world in which your competitors are beginning to provide personalization from every angle.

Related: Allegiance Retail develops customized online shopping experience

Maintaining a competitive edge

In an ideal world, you want to create an experience that is unique to your platform and tangibly better than any of your competitors. You want a faster, more convenient solution than anything else out there.

If you’re using a marketplace-ecommerce solution, many of your competitors might also use, you lose the opportunity to find a point of differentiation. At the very best, you’ll provide an experience which looks exactly like your competitors.

At worst, your experience will be lagging behind those who have decided to take matters into their own hands.

Platforms such as Instacart can also have problems with integration and compatibility with your existing systems. Generic platforms will not be designed with your systems in mind, which means they may not be able to integrate with your existing POS or loyalty programs.

Reputational risk

That lack of control and integration can also create a number of reputational risks. If you’re engaging with third parties, you open yourself up to significant issues. Their quality delivery standards are often lower than the expertise of your trained staff. If they fail to meet customer expectations, it will reflect poorly on you as a company, with dissatisfied customers coming straight to you as the source. For example, if you’re using a company such as Instacart for your grocery ecommerce, you lose control over the process: their delivery driver may not be trained to the same standards or have as much understanding of your brand quality levels as one of your employees would, presenting significant risk to your brand reputation.

If the customer receives disappointing products because of the driver’s poor performance, they won’t complain to Instacart— they’ll be knocking at your door instead. As soon as you engage the services of a third party, you assume liability for the quality of service they offer. If they underperform, you, as the retailer, look bad.

Ownership of data

Lastly, you also need to retain control over your data. We are living through the big data revolution, and that’s critical for ecommerce. Even if you have what looks to be an outstanding ecommerce platform, if you don’t have ownership of your data, you could be struggling without actively realizing it.

That’s one of the big downsides of many ecommerce platforms. While each platform has largely similar benefits for retailers, it opens the digital storefronts, often without the involvement of the retailers themselves. They cede control over the process and their data in the midst of this, which can create serious problems. This means ecommerce strategies lack synergy with the company’s broader strategies – there’s simply a disconnect.

Without control of your data, you could suffer in a number of ways:

  • You’ll lose control of your customer experience and pricing.
  • You will not be able to effectively integrate your loyalty and promotions solution(s).
  • You will struggle to configure items or display rules.

Data is valuable, which means anything that causes you to give up control or limit your own access to data will – in the long run – prove to be expensive. Your shoppers will no longer be your shoppers.

Designing your own bespoke ecommerce system

When thinking about selecting an ecommerce provider, you want a solution that is fast, proactive, and designed with you in mind. Take a close look at what bang for your buck you’re getting with your eCommerce provider. Is it purpose-built for grocery? Do you control your customer experience and brand quality standards from end to end? What do your profit margins look like once fees are taken into consideration, and is this a provider you can truly trust?

You can try to build your own system. This will give you control over your own data and the customer service solution but doing so is a massive undertaking. The majority of tech projects businesses undertake fail, often because they are working in an area that is outside the scope of their own areas of expertise. Building your own system comes with enormous risks about performance, integrity and scalability.

There are three key considerations:

  • Will there be any glitches that you haven’t considered?
  • Will it be capable of matching the performance of best-in-class solutions?
  • Will it scale as you grow?
  • Is it one you can trust?

Instead, consider choosing an outsourced provider carefully – one which is purpose-built for the grocery sector and has the flexibility to be tailored around your demands. Instacart’s work with the grocery sector has taught it an enormous number of lessons. At some point in the future, they could decide to become a retailer in their own right.

If that were to happen, any retailers using Instacart would face a conundrum. They willingly gave Instacart all of their data and pulled back the curtain to the secrets of success in retail. The question they would have to face is: what happens to their business once Instacart enters retail and decides to cut them out of the transaction? And with their eCommerce services shut off, their customers will no longer be able to online shop through their brand. Once they're off the Instacart platform, there is no viable way for their eCommerce to continue and the investment is lost.

The key takeaway is that ecommerce represents enormous value for businesses. It opens up a whole new revenue stream which can be transformative for retailers. However, not all solutions will take all grocers to the next level. Retailers will need something which gives them control over their data, allows them to customize their solution and, crucially, will be a trusted and responsible business partner.

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