3 Advantages of Independent Retailers
The dramatic rise of grocery e-commerce during the pandemic has made five-fold sales increases common for many independent retailers. While many of these operators had e-commerce systems active for years, others had zero-to-minimal online presence before the COVID-19 lockdowns kicked in.
Once the customer has the ability to select and pay online (as long as pricing and dependable delivery is comparable) and travel time, parking and waiting in line to pay and overall convenience is taken out of the equation, how much do shoppers really care where their groceries comes from?
This is where the entrepreneurial spirit of the independent grocer enters the picture. The smart and resourceful ones are taking the challenging circumstances of the pandemic and turning them into competitive strengths in three distinct ways.
The Power of Simplified Decision-Making
Launching an e-commerce operation is a little like building a house. No one really knows how long it should take, but it almost always took longer than anyone thought it would. An old saying among home builders is “if you want to go fast, go slow.” In other words, trying to rush things leads to more mistakes and setbacks. Doing fewer things, and focusing on doing them well, is the way to accomplish things faster.
Grocery chains have been rolling out online offerings in some form or another for years, and the online initiatives have typically been designed and run more as business experiments (with minimal expectations). The process of transformation to increasingly digital business models is a long one and that was acceptable in the pre-COVID era, precisely because it was not viewed as a strategic transformation.
The independent grocer, with a smaller number of executives exerting greater control over a higher volume of the business decisions necessary for strategic transformations to occur, is more likely to achieve online functionality that covers 100% of their customer base — quicker than a large chain.
For example, Bhanu Radadia and Gurbachen Bedi, owners of Bhanu Indian Cuisine & Market, a popular Indian grocery/restaurant in Southern California’s San Gabriel Valley, were able to implement online grocery in less than 30 days after discovering service provider Local Express.
The Value of Niche and Geographically Limited Markets
When it comes to niche markets, e-commerce creates somewhat of a level playing field between online and brick-and-mortar players in the grocery space. Before the lockdown, consumers in Bhanu Market’s region who searched online for Halal products, South Indian, Sri Lankan, Pakistani foods and rice, Ayurvedic items, and vegetarian-friendly foods might see Bhanu Market listed among the store locations that are nearest to them, but they would have to visit the store to discover the assortment.
Local Express created a digital shopping site for the chain that connects product files to ensure only available products are on the website. Integration to delivery and payment gateways provided the critical infrastructure to provide multiple fulfillment options. The result was about 60% of new Bhanu Market customers during the pandemic lockdowns were acquired through the online store and the store’s trading area expanded to roughly 25 miles, with most of the distant shoppers buying larger amounts to rationalize the delivery fee.
When business pundits speak of corporate adaptability, the usual discussion involves examples of organizations that failed to keep up with technology and cultural changes over time. Adaptability in the era of COVID-19 requires an approach that takes better advantage of technology emerging outside the realm of conventional vendors.
For example, once-predictable consumer habits were completely upended and changed on a daily basis which made it enough of a challenge to meet demand. According to Gary Saarenvirta, CEO of Daisy Intelligence, “for the grocery category, the data collected for decades on past consumer demand patterns and used to predict future demand is, charitably speaking, no longer useful.”
Brian Moyer, CEO of Freshop, a comprehensive grocery e-commerce solution, advises that “dramatic shifts including hoarding, limited stocks, social distancing and constantly evolving conditions at the local level require immediate changes in how grocers operate, both in-store and online.”
The key word there for independents is immediate. One of Freshop’s clients, South Dakota-based chain Kessler’s, had been doing online grocery for two years prior to COVID-19. During the first part of the pandemic, Kessler’s hired on 17 full-time new employees to meet skyrocketing demand for online ordering.
No discussion of independents versus chains/big-box is complete without covering customer service and interaction. The customer interactions with the helpful, friendly and knowledgeable employee does not have to cease with migrating to online.
Customer service was critical to the success of Bhanu Market’s rollout, especially since not all their customers were familiar with online ordering. In addition, Kessler's sends text messages to online customers with important information and updates, as well as personalized thank-you notes included in each order.