10 Reasons Grocers Should Rethink Their E-Commerce Strategy

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10 Reasons Grocers Should Rethink Their E-Commerce Strategy

By Joseph McMenamin - 10/05/2020
10 Reasons Grocers Should Rethink Their E-Commerce Strategy Online Grocery Pickup Click-and-Collect
Grocers of all sizes, from major player Kroger to small independents, have seen a huge uptick in online grocery pickup adoption since the COVID-19 pandemic began.

When Amazon first set its sights on the grocery store market, the industry had yet to fully comprehend the future of its livelihood. “Finally!” I thought. For the grocery business has been, shall we say, not exactly a trailblazer for evolution and technological advancements. The Amazon news instantly set the grocery market on a course that will eventually redefine what “grocery shopping” actually means to the both younger Gen Z and aging Baby Boomer generations. From my perspective, in this case, “Change is good.”

In attempting to begin offering what has become known as an online grocery pickup (OGP) option for their customers, grocers have been left scrambling for answers. We have seen traditional brands, third-party players and automation technologies inserting themselves into the market at a pace that's much faster than the industry’s traditional rate for innovation. The cloud of confusion created by the COVID-19 pandemic, and what its ultimate influence on the world will be, has also led to a flurry of questions and uncertainty.

So, what does all of this mean? Deep-pocketed companies have spent money, hoping to demonstrate to their customers and stakeholders that they’re “making moves” in the segment. Regional brands are taking smaller approaches, while too many don’t recognize that they’re already becoming dinosaurs, destined to be extinct in the next five to 10 years.

The objective here is for you, the reader, to recognize and accept that while we don’t know what will happen, it’s our duty to forge ahead. Why? Because OGP isn’t going away. Furthermore, it’s only by working together that the grocery industry will be able to advance. These points are meant to be a reminder, or a guideline, to illustrate that the decisions being made about your brand’s future growth are an ongoing, never-ending process. Everyone needs a good devil’s advocate from time to time, so let’s get started.

Here are 10 reasons that you may want to rethink your grocery e-commerce/OGP strategy, and what it tells us about our industry:

1. You're not creating your own strategy

Copycats, beware: You may not even realize it, but outside influences are swaying you. Your focus should be on what has brought your brand success. Search for effective ways to take care of your customers in ways that speak to them already. You may be surprised at the results by starting this way.

2. You’re not maximizing your existing store footprint

Instead of looking at what you don’t have, focus on what you do. Can we add onto to the existing sales floor for staging purposes? Do we have space out back to build a micro-fulfillment facility on-site? Don’t overlook existing assets before exploring unnecessary costs.

3. Your data is good ... or not so good?

Don’t take your data and information at face value. Besides, data doesn’t tell the whole story. Satisfying the unique needs of your customers should be the driving force when building your OGP order-fulfillment process.

4. You’re focusing on noncritical aspects of integration

It’s undeniably true that the user interface is essential to an effective OGP system, because it’s what the customer touches. But how about filling the orders in a timely fashion? Cold storage? Staging? Labor force needed? Think through the entire process, right down to the dull, but ever so important, details for execution.

5. The new, shiny toys are blinding you

The majority of us get bored with what we know, and fall in love with whatever the great new “thing” that your friend down the block just acquired. Not everyone needs a new state-of-the-art fulfillment center. Be conscious of how you comprehend the possibilities, and keep your focus on execution – and the customer.

6. You’re not thinking outside the box

Like the general manager of a sports team, you’re tasked with making critical decisions that will have long-term ramifications on your future. Don’t be afraid to take a chance on something that may be considered too different or far-fetched because it’s not the easy choice. Do your homework, and see what options are out there.

7. You haven’t asked the right questions

The common problem is that many companies can’t admit that they don’t have the answers. Furthermore, they don’t know which questions they should be asking. Now is not the time to play it cool. Ask everything! Grocery e-commerce is new and unknown – and incredibly critical to your future success. Use every available resource to help turn the odds of success in your favor.

8. You’re struggling with the plan

Can you accomplish what you’re trying to do in the segment? Is it feasible for your company to achieve the strategy? Are you too far involved to change course? Stubbornness can cause you to double down when it’s unnecessary or ill-advised. Instead, conduct a thorough but dispassionate review of your operation to identify (and fix) any weak points.

9. You didn’t go with the right team

Now isn’t the time to throw your longtime pals a bone because they stuck it out with you, even though this new venture isn’t something they have experience with or have ever done before. This segment is different; don’t forget it. Use companies that know how to build the proper infrastructure that’s necessary to execute your strategy.

10. You haven’t put the plan together holistically

This story is already beginning to sound all too common. You come up with a plan that looks great on paper. Approvals are complete, and you execute the design. Executives roll through for updates. The PR staff has new, positive content to send out. All is going according to plan. Then the lights go on and the design isn’t working as planned. Suddenly, you realize that no one took a minute to look at this from a collective standpoint. Was this design reviewed beyond their portion (i.e., robotics, refrigeration, order quantity, fulfillment speed)? I can’t stress this enough – don’t ignore checking the system from a holistic perspective. Not considering every angle can be catastrophic both financially and to your customers if anything at all is overlooked.

About the Author

Joseph McMenamin

Joseph McMenamin

Joseph McMenamin is the director of e-commerce for Fort Worth, Texas-based KPS Global Inc., a provider of climate-control solutions for various retail formats, including e-commerce online grocery pickup (OGP).  Read More