4 best practices for grocery digital transformation
Online grocery sales jumped 300 percent in the first few weeks of the pandemic. While that number eventually declined, online grocery sales still grew year-over year from 2019. In India, online sales, led mainly by grocery orders, are expected to continue to grow by 27 percent and reach USD 99 billion by 2024. And, according to Forrester, the global grocery market will reach $334 billion by 2022.
Many grocery stores had limited or no online ordering before the COVID-19 pandemic. To help you accelerate your digital strategy, here are four best practices for grocery digital transformation.
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#1. Make improvements to your online channel
Online grocery shopping, while easy, convenient and safe, is still new to some of your customers. So, what they need is a seamless transaction where ordering online is intuitive. Here are some things to consider when you’re either updating your online ordering or creating a new online shopping website:
- Do a thorough assessment of the items your customers usually pick up in your store and make them all available—that way, you can bring the most value to your customers. Lean on retail analytics from your POS system to help guide you and your IT provider(s) and think about upgrading your grocery POS platform if it doesn’t come with retail analytics.
- Make sure navigation is intuitive so online shoppers can easily find what they’re looking for.
- Give customers the easiest possible way to pay with plenty of choices and, if they’re picking orders up at your store, give them the information they need for a smooth end to their transaction.
- Take a customer engagement approach to all of the online changes you make to support Buy Online, Pick-up In Store (BOPIS) that connects your physical retail store with your online store.
- Have a strong digital marketing strategy to let shoppers know you offer online grocery shopping. You’d be surprised how often consumers are left in the dark about what online retailers and in-store retailers do and don’t provide (and don’t stop to ask)—so you may have a “hungry” audience waiting to receive your email, social media posts, texts and more.
#2. Shoppers want the fastest, most reliable final-mile delivery
One thing your customer doesn’t want to do is wait for their groceries—it’s the main reason some people are still only shopping in-store rather than ordering online; they know they can pop in and out quickly. To give them the experience they want, you’ll need to fill orders quickly and accurately to gain the most customers.
So, the faster the delivery the better. Same day delivery is likely to be your customer’s preference (unless they’re ordering through a site that delivers on a weekly basis and they’re planning around that). Be sure to put a plan in place to meet your customer’s expectations.
And some grocery retailers are looking to retail innovations to fill online orders as fast as possible. Safeway, for example, is using micro-fulfillment centers to fill orders five times faster with a mix of robots and employees.
Also, your customers are paying attention to which stores offer the best online grocery shopping service, including how fast orders are filled. Does your store make the list? See how Walmart, one of the online grocery leaders is using a five-pillar approach to handling a 74% surge in online shopping.
#3. Buying Online, Pick-up In-Store (BOPIS) is the perfect way for a retailer to drive in-store foot traffic
Consumers might be surprised to know retailers were moving towards BOPIS years before COVID-19; it’s another consumer trend that’s been fast-tracked because of the pandemic. And it’s the ideal way to give your online customers a reason to make a store visit, which can help you can gain two main things:
- More business. If they come to your store to pick up orders, there’s a decent chance they’ll remember something that they forgot and enter your store. All those impulse buys you were missing out on with online orders now enter the picture.
- More chance for engagement. For the time being, the engagement will be at a distance, but finding more ways to connect with your customers is important to increase their loyalty—and offline conversions. In fact, incorporating incentives for in-store visits into your loyalty programs (after COVID has been relieved) is a great way to make engagement a part of your program.
Before you make a major push for online shoppers to come inside, be sure your layout is efficient and effective so they can easily find what they need, pay and leave. That will certainly include robust self-checkout and a POS system that accepts contactless payments.
#4. Omnichannel approach bridges the gap between in-store and online shopping
Your customers are now going to have access to two very different looking grocery carts. One will be something they can wheel around your store. The other will exist virtually (for now) on consumer electronic devices. It’s likely going to feel strange to many of them to go back and forth, and particularly while getting used to an online grocery cart. For that reason and many more, an omnichannel strategy is vital. In fact, according to ProgressiveGrocer, omnichannel will forever change grocery shopping.
Similar to BOPIS, the omnichannel shopping experience is getting a big boost in 2020. Delivering the same experience across your in-store, online and mobile channels so your customers’ transactions are efficient, easy, convenient and, most important, uninterrupted, is what your customers will expect. And that way, you remove any gaps between your customers online and in-store shopping.
To boost your every-channel grocery customer experience, try these tips:
For your website. Make sure it’s easy to navigate. The last thing you want is to make it difficult for your online shoppers to find the items they are looking for. And make it possible for a customer to have a full online cart, just as they would if they were shopping inside your store.
For your store. Now that your customers enjoy ease and convenience with BOPIS, you’ll need to increase that in your stores, too. And fine tuning your supply chain (nailing down logistics to prevent any gaps in online orders and in-store shopping) so your shelves remain stocked is going to be doubly important. And, again, make sure your POS system accepts contactless payments and that, in general, they can enter and leave the store as quickly as possible.
Essentially, your online and in-store shopping experience should achieve exactly what omnichannel sets out to do—provide the same end-to-end service for both.
Why online shopping is here to stay: saving money and efficiency
At first glance, it may seem unlikely that the convenience and safety of ordering groceries online for pick-up or delivery can be cheaper. And while technically it isn’t, your customers can save money by ordering online. Here’s why:
Sitting alone at their computer, the house perhaps quiet, your customers can use a list to go online (with their most convenient, easy-to-use electronic device) to browse either your website or a third-party’s ordering system. And, they’ll likely do it in a more focused, organized way, buying only the items on their list.
So, those impulse buys? They’re not going to be as common when a bag of potato chips isn’t tempting a customer sitting on one of your shelves. Also, they’ll be able to track how much they’re spending when they look at their online cart, thinking twice about buying more as their total grows. And they’ll also save time which could equal less work interruptions, especially with home delivery.
Also, which of the two following scenarios do you think sounds more appealing to your customer when they are in a rush—when efficiency is their number one priority?
First: Getting a cart (making sure it’s sanitized), navigating each aisle—and in some cases searching for items that they can’t find—then making their way to the checkout (perhaps waiting in line), and then finally putting their bagged groceries in their car. All in a pandemic?
Or, second: Sitting in the comfort of their own home, perhaps peacefully choosing items online, placing and paying for their order and either picking it up at your store or having it delivered? Likely the safe, convenient and faster way will win out when time is of the essence.
So, online grocery stores are likely to continue to grow and innovating your online ordering will be very important to remain competitive.
Make that full digital embrace
Maybe you were toying with digital before 2020 with a mobile app tied to your loyalty program, or perhaps you had already launched a decent online ordering service. Either way, it’s clear that a full digital transformation can provide an intuitive, user-friendly, connected across all channels shopping experience tailored to your audience. So, you’ll be poised to grow your customer base, increase loyalty and raise your bottom line.
Online delivery is just getting started
Brick-and-mortar retailers will have to craft nimble strategies for integrating digitally enabled delivery and ordering experiences that can stretch far beyond the effects of COVID-19.
That’s because experts expect more change to come in the sector, particularly as more companies become publicly traded—DoorDash recently went public, and investors expect Instacart to conduct an initial public offering in the coming months.
What could those changes look like? J.P. Morgan analysts think that, as workers return to the office, some companies could “remove cafeterias entirely and offer employees a discount on every online food order.” Delivery providers could also likely see further waves of mergers and acquisitions, potentially driving the number of major companies in the U.S. market from four down to two as investors look for profits.
Through it all, delivery services will need brick-and-mortar partners to thrive. That means retailers need to stay informed about this rapidly evolving market as restrictions ease and the U.S. settles into a new normal.
