Charting a Path to Omnichannel Profitability
Having a strong omnichannel strategy is a must for grocery retailers striving to compete in an increasingly digital world. Progressive Grocer asked Mark Fairhurst, VP, Marketing at Mercatus — a leading SaaS grocery platform provider — to explain why that is such an important step in charting a path to profitability.
Progressive Grocer: Mercatus conducts a lot of grocery industry research. What you are seeing?
Mark Fairhurst: We’re seeing a surge in mobile commerce usage that will continue to grow. It currently accounts for 10% of all digital grocery sales, up from 6% a year ago.1
Grocery retailers deserve a native mobile experience that engages customers and offers a convenient shopping experience. A branded, first-party mobile app enables “always-on” shopping, which means customers can check out flyers and coupons, add items to their cart, and choose Pickup or Delivery anytime from anywhere. We’re also seeing a clear correlation between a mobile experience that amplifies value and grows brand affinity and a retailer’s online profitability.
PG: What does it take to build a sustainable, profitable eCommerce strategy?
MF: We look at eCommerce through the lens of control, cost, and convenience.
With our platform, retailers can take full ownership of their first-party channel experience online. Third-party marketplace solutions erode consumer loyalty. Grocers today are making investments towards owning their first-party channels. A strong first-party commerce solution lets grocers regain control of their brand experience, customer relationships, and long-term value.
Strategies that lower the cost-to-serve online customers are just as critical. With margins being what they are, retailers must be able to efficiently assemble and distribute orders and generate digital advertising revenue. Customers also don’t like the higher prices, extra fees, and tips that come with Delivery. Shifting customers to use Pickup means grocers can reduce third-party marketplace commissions and appeasement fees.
Flexible delivery times, ease of use, and personalization are some factors that go into delivering an “always-on” shopping experience. Most customers shop online because it’s convenient, so if grocers aren’t maximizing convenience from the moment they engage with customers they’ll likely lose them. That’s why it is important to focus on making things like basket building and checkout as frictionless as possible.
PG: What keeps grocery retailers up at night when they think about the impact of eCommerce?
MF: Retaining online customers. Data shows that 25% to 30% of monthly active online grocery shoppers regularly cross-shop between regional grocers and Mass merchants. A key component to Mass merchants’ success is their focus on making their online channels convenient to use. Grocery retailers must scrutinize their online buying experience, from the ordering process through to fulfillment, and make sure they’re doing everything possible to make it a convenient experience for customers.
PG: How can grocers reclaim some of the market share lost to Mass merchants?
MF: It goes back to strategy. How can grocers protect their brand and retain control of the first party channel experience? How can they cost-effectively operationalize fulfillment? How can they make the customer experience more convenient? Choosing a partner that can innovate with the retailer’s business interests in mind is a good place to start.
That’s the approach we took with our soon to be released next-gen mobile experience. Our new native app lets retailers customize promotions based on purchase history and browsing behavior, recommend products based on real-time customer data, and place branded products in strategic locations to catch a customer’s eye. The easy-to-navigate app lets shoppers complete checkout in just a few clicks, and offers a new Shop Landing Page with configurable aisles and tiles that encourage them to build their carts quickly and convert.
Going forward, grocery retailers will fuel online growth by providing a differentiated customer experience that blends technology, insight, and operational excellence to encourage more frequent repeat purchases. It comes down to knowing who your customers are, understanding what they want, and developing better ways to satisfy those needs.
Contact us today to learn how Mercatus Mobile can help pave your path to omnichannel success. www.mercatus.com
1 Harnessing Mobile Commerce for Customer Loyalty. PYMNTS. 2022.