While in most categories, brick-and-mortar retailers have long been fighting deep and ongoing revenue declines, so far, grocery brick and mortar has continued to enjoy modest growth.
Perhaps due to this, grocery and drug retailers have taken a different, somewhat slower path to omnichannel retailing; many are only now tackling the challenges associated with digital ordering and delivery of their unique mix or packaged and perishable goods.
People still like grocery shopping
Our recent survey of 500 US consumers might hold a clue to that success: 68% of respondents said that they like grocery shopping and more than 23% of them reported that they “really enjoy it.” Walking grocery store aisles is a multisensory experience: feeling, seeing and smelling produce are experiences not easily replaced online.
But, with e-commerce giants like Amazon aggressively seeking to encroach on the traditional grocery model, grocery stores are responding. The best are doing so in ways that let them blend what they already provide with the efficiency, customer experience and reach of digital.
Omnichannel is blurring lines
For CPG [consumer packaged goods] products in particular, physical and digital retailing are not discrete channels. Retailers are the source of goods, whether a consumer selects the products from a physical or digital shelf, picks them up or has them delivered. The experience should be frictionless and fun, while reflecting the unique advantages of the retailer brand. Omnichannel interactions will be seamless: retailers can expect to serve customers who shop in store, adding items to a digital cart on their phones to schedule for home delivery or pick up later; who shop from home and pick up in store; and who add to their carts in person when picking up online deliveries.
CPG retailers, such as grocery and drug stores, have a tremendous advantage over online-only retailers because they can provide the full range of this omnichannel experience, while offering consumers flexibility. Additionally, retailers that offer delivery services—whether through a partner or in house—enjoy significant advantages over newcomer e-commerce pure-plays, as they are geographically closer to customers and can beat competitors on delivery cost and speed.
Buy online, pick-up in store (BOPIS) is hot
Initially limited to densely populated urban areas where consumers are willing to pay extra for the convenience, digital ordering with offline pickup is beginning to expand rapidly even into suburban areas. Grocers like Kroger are seeing positive results from allowing customers to order products online, then having store staff pick and pack the orders and load them into cars when customers pick them up in store. This is a huge benefit to parents of young children everywhere, who appreciate not having to push kids around in carts loaded with groceries or argue with them about the treats they want to grab at checkout.
But what happens to brands when consumers skip the aisles?
If you’re a brand, you probably winced when you read that last sentence: “What will I do when the shopper skips my display?” This is actually an opportunity as much as it is a challenge. As omnichannel behavior increases, retailers and CPG brands have an unprecedented opportunity to work together, particularly if they can focus on their shared objective to get products into carts, whether they are in-store or virtual carts. Brands can achieve this by providing a frictionless add-to-cart experience at every digital touchpoint, and retailers who embrace and support these efforts will see more shoppers trying and adopting their digital offerings, such as BOPIS.
There’s no doubt that grocery shopping is moving omnichannel. For retailers that continue to facilitate the changing shopping habits of customers, leverage their prime last mile locations for fulfillment and embrace CPG brands as partners to extend consumer reach, this is an unprecedented opportunity for success.
SmartCommerce provides marketing technology for consumer packaged goods brands.
Favorite