All recent reports during the coronavirus outbreak agree on one thing: E-commerce has seen a surge in demand. The estimated percentages vary, but more customers are turning to online grocery as they stay at home, hope to avoid bricks-and-mortar stores or simply want to try a new option.
During the Produce Marketing Association (PMA) Virtual Town Hall this week, four e-commerce representatives from U.S.-based Peapod, German-based HelloFresh, Dutch-based Picnic and Chinese-based Yiguo talked about shifting consumer behaviors seen online, the need for stronger supplier relationships and what the future may look like.
At the beginning of the pandemic, most people first could be found stocking up on nonperishables, everything from toilet paper to pantry staples, but buying fresh has now followed suit. Peapod noted that the fresh items customers are purchasing are those that are familiar and easy to make.
Yiguo also noted an uptick in ready-to-eat and ready-to-heat products.
While keeping service and experience top-of-mind during these times, all four companies acknowledged that customers are a little more forgiving when it comes to their deliveries.
Peapod has found that shoppers who didn't want to plan ahead before are now scheduling deliveries days or even weeks out because that's the time slot they can get. Yiguo traditionally shipped within one and a half hours after an order, but sometimes customers are waiting one or two days. As for Picnic, it had a wait-list of 60,000 hopeful customers before the pandemic, and that number has grown to 200,000. HelloFresh has seen high recipe scores and growing net promoter scores.
The entire supply chain has been greatly impacted by the coronavirus and HelloFresh, Peapod and Picnic are saying that communication is the most important thing when it comes to vendor relationships.
HelloFresh is looking for customization and creativity from suppliers, those willing to work with the meal kit company on smaller portion sizes.
Peapod discussed the need for shippers and growers to look at their digital strategy in terms of a digital image and packaging to keep up with technology. The industry is already seeing an increase in automated picking from a section of the store for e-commerce orders, and that is going to transfer into produce quickly. Packaging will need to align with the needs of automation.
The ways grocers are reaching customers is also changing as many are suspending the flyer. Picnic has been rethinking promotions where a number of customers receive a promotion one week, with additional customers not getting the same promotion until later. This rotating schedule helps lift sales at a more even rate instead of seeing one large peak.
The e-commerce upswing of the last handful of weeks can already be seen leveling out to some degree, but at a higher penetration than before the pandemic. Many studies show that people who order their groceries online once are more likely to do it again.
Peapod acknowledged that having a previous order list makes it that much easier to get customers to place additional orders moving forward. Grocers and e-commerce companies must then figure out how to meet demand whether it’s at the curb or delivery to the home.