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Grocery Shopping As We Know It Is Changing—Are You Ready?

By : Bonnie Lawrence

November 16, 2015 09:00 AM

Back when my kids were small, I would have given almost anything for online shopping options from my local grocer – especially in the winter. Unfortunately for me, my timing was off.

 

Early pioneers such as Webvan had already failed, and the second wave of online grocery hadn’t yet hit the broader market. I knew even then that it was only a matter of time before US grocers gave online shopping offerings another try. And I’m happy to report it appears as if that time is now, and it looks like grocers are getting it right!

 

Anyone in the grocery business knows that retailers have to operate on “razor-thin” margins, in the neighborhood of 1% - 3%. This doesn’t allow for much added cost for building out an online presence or the infrastructure for home delivery.

 

Just a few years ago, most grocers didn’t have websites or social channels to engage with their customers. Online grocery shopping meant building out both the IT and the logistics platforms from the ground up.

 

Today, online and social engagement with customers is standard practice, and in most areas, companies are finding that in-store pick-up is just as popular and successful as a home-delivery model. Retailers of all kinds now recognize their customers shop in multiple ways, across different channels, and that providing online shopping won’t lead to the death of brick-and-mortar retailing.

 

I recently came across an article from Forbes from 2011 that detailed 10 reasons why online grocery shopping was failing. Let’s take a look at a few of the challenges referenced in the article (which I’ve summarized below for simplicity) and see how in just 5 years, retailing has changed significantly and paved the way for a successful online grocery retailing today:
 

  • Grocery shopping is social
     

The suggestion here was that without a brick-and-mortar experience, shoppers wouldn’t feel engaged with the retailer or the products they purchased. The absolute explosion of social marketing has transformed the online experience such that today, buying online is social.

 

  • Customers dislike delivery windows & freshness is a challenge
     

Back in the day of Webvan, the theory was customers shopping online wanted to stay away from the store. This meant having to invest in delivery networks, and customers were often given 4 hour delivery windows that were as inconvenient as waiting for a cable repair appointment.

 

This was also bad for retailers, since they had to try and keep food orders fresh and at the proper temperatures with these long and inefficient routes. Many grocers today offer store pick-up options, which means the order is ready and staged when the consumer is ready to swing by the store.

 

Plus, picky customers can go inside the storeand add to their orders, while the rest of the order is ready to go.
 

  • The “right” technology hasn’t been applied

 

There were a few different challenges caused by technology limitations. Early websites required customers to create shopping lists, and this was a time-consuming process. Not to mention, lists always change – customers almost never place the exact same order twice.

 

Second, early websites had challenges with presenting item data and allowing for fast and easy sorting and filtering of results. Itwas actually faster and easier to walk a store and find your items on the shelf than on a grocery website. 

 

Today, with barcode scanning apps available for most devices, faster internet connections, and more widely-available media-rich item data, websites can be as fast and engaging as the in-store experience.
 

  • Customers like to select their own produce & fish/meat are best purchased by sight
     

This remains the biggest challenge that grocers face with online shopping success. Shopping for cereal, sugar, coffee and other “center store” items is fairly simple. The products are shelf-stable, pre-packaged and as long as customers select a brand they know, they know exactly what they’re going to get. Not necessarily so with the perishable items.

 

However, smart retailers have devised ways to even solve this challenge – custom preferences built into store-picking solutions to ensure the associate who shops the orders knows exactly what the customers like.

 

One of these solutions is NCR’s Power Picking - our latest addition to the NCR eCommerce Click and Collect portfolio. With the online shopping portal, I can fill out my preferences and keep my product purchase history. For example, back when my son was on a very specific brand and type of baby formula,

I could mark that as a no-substitute item. And, I could describe what shade of yellow I like on my bananas (mostly yellow, green at the stems, little or no brown) – and these preferences will display for the associate selecting my order.

 

This means I’m almost never disappointed or surprised, and the store can more efficiently make decisions about my order that will keep me coming back for more. Even though my kids are older now, I’m still counting the days until my local grocer invests in these technologies and simplifies my grocery shopping experience.

 

We will be showcasing our NCR Power Picking solution at the NRF 2016 Conference held on January 17-20, 2016 in New York City. Visit us at Booth #3105.

Bonnie Lawrence

Marketing Leader, Retail Solutions Division

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Bonnie helps to execute marketing strategy for the Global Enterprise Merchandising and Supply Chain Solutions business unit worldwide. She has also worked as Product Manager and was an integral member of the team that launched the new product, Power Mobile.