Time to Rethink the Omnichannel Approach: Pulse Panel
Over the next decade, the number of Americans shopping for groceries online will rise from 23 percent to 72 percent, with shopper spend doubling during that time. In fact, by 2025, 40 percent of center store food and nonfood sales will be fulfilled digitally.
These insights came from – and preceded a panel discussion moderated by – Mark Baum, chief collaboration officer of Arlington, Va.-based Food Marketing Institute (FMI), during the final session at Pulse 2017, which took place June 13-14 in Chicago and was hosted by Progressive Grocer, its sister brand Retail Leader and FMI.
“It's time to think about a new model about aligning resources together to win in the digital age,” he stressed. If a consumer goes online and the digital experience isn't an exact representation of the physical, the consequences will be huge.
The panel comprised four grocery technology experts: Linda Crowder, senior director of Peapod Interactive at Ahold-Delhaize's Skokie, Ill.-based Peapod subsidiary; Cheryl Black, CEO of Brisbane, Calif.-based digital offer firm YouTechnology, a Kroger division; John D'Anna, EVP and chief strategic officer at Tyler, Texas-based Brookshire Grocery Co.; and Linda Corn, VP of retail analytics at Schaumburg, Ill.-based research firm Nielsen.
Raising, Meeting the Omnichannel Bar
When it comes to omnichannel, the “bar has been constantly raised,” Crowder said, and it's “very important” to move fast to keep up and constantly achieve at a high level.
“But at the same time, we're a grocer,” she reminded the audience, so speed alone isn't the best solution, as it can lead to mistakes and damaged goods. Execution has to be fast and flawless.
“It's a much more complex supply chain, and last mile is expensive,” Black said.
So grocers interested in investing in the future need to look into each market and make sure they can offer the appropriate delivery experience in each one, Crowder added. One tip she offered: Follow fresh.
“The future is going to be where fresh goes,” she noted, as when fresh is perfected in grocery delivery, that's when consumers will go from once-in-a-while users to loyalists.
And ecommerce isn't a zero-sum game, she pointed out: Consumers who shop across channels are actually the most valuable. Most will look across the whole food experience, giving grocers the opportunity to capture them across more channels. But they have to deliver on consumer expectations in each one.
They also have to do more than just throw money at digital to move in the right direction. In marketing, more retailers are shifting ad dollars to the digital realm, something Black said she expected sooner, but is moving more quickly now. However, Corn pointed out that companies aren't seeing the ROI they expect – they also need to get their organizational strategy in line, skill sets in place, and more.
Questions to Ponder
D'Anna noted that a lot of retailers are saying that they have to get into click-and-collect. That's not necessarily the answer, however – they need to ask themselves some critical questions first.
“What is your digital strategy? How are you going to engage your consumer digitally? How are you going to work with your supply chain? How are you going to track it?” he questioned.
And how will you handle categories from channel to channel? Crowder assured the audience that shoppers don't want just a product, but also “inspiration, a solution, excitement and engagement.” It's a lot more work to create a solution than it is to stock shelves. But it's also a “wonderful opportunity” to build a basket and loyalty because you're helping to solve a problem.
“It's about 'How do you help me make my life better? How do you help me make my life easier?'” she asked.
Black added that if grocers can develop that relationship and get shoppers to trust that they will deliver the right item via the right channel, then they'll increase basket size.
“If your digital strategy doesn't have personalization down to the individual, you're missing the point,” D'Anna warned, noting that customers are more segmented than ever.
Closing the discussion, each panelist offered his or her “takeaway” recommendations to grocers:
- Seamless integration is required, Corn stressed – grocers need to integrate the path to sell with shoppers' path to purchase. She pointed to the “three C's” for guidance: Consumer, and having a 360-degree view of shoppers; Capabilities, with the need to build strategy, tactics and enablers; and Collaboration, to really think about partnerships with technology and supplier partners.
- D'Anna added that grocers need to sit back and really determine their strategy when it comes to digitally engaging customers. Retailers have to figure out how they will transform their entire organization, as digitally engaged customers will be crossing channels. Looking at everything holistically, and figuring out strengths and how to portray them online is critical.
- But grocers still have to be nimble and react quickly, Black emphasized. Digital isn't different; it's just another channel. Grocers have to “blow up” the way they organize things, and then deliver across all channels appropriately.
- And of course, it's important that grocers continue to remember that ecommerce doesn't mean just taking the grocery store online – they also are reinventing how customers look for food, Crowder noted. “If you think you're only taking what your store is and putting it online, you're missing an opportunity,” she said.