The online grocery market is breaking out of its shells and entering a new era as it out paces traditional channels on growth, fueling increased investments. A multi-pronged battle is on as traditional grocers and modern ecommerce giants fight for future relevance and dominance.

A recent study by Bain & Google revealed consumer’s mixed response to online groceries and a strong home store bias driven by a perception of inconvenience. Considering most brands tout & advertise convenience as a theme, the study proves a strong undercurrent. It cannot be explained away as an inertia to change. What is the deficit?

As we started building Sympl foods, we realized the gaps and complexity impacting the market beyond supply chain and last mile complexity. Today’s online grocers are at different stage of digital maturity. Traditional ecommerce or in-store experiences impact their digital channel experience. Lack of visual cues, unimaginative search experience, lack of data, catalog issues, display issues to mention a few that have an overlapping and cascading impact.

Experience Deficit – The act of shopping online for groceries is harder than traditional shopping.

Grocery shopping behavior is a complex trait of intent based, time limited, un-involved, habit driven and yet highly conscious & personal activity. In layman’s terms, a husband and a wife do not always shop the same way while they may shop the same items!

Draining the fun: Like I said, shopping is personal if not fun. The different age groups, needs, paths and patterns. It is impossible to replicate store strategies, online. However it is important to reduce the cognitive load while creating an online strategy. Looking at the current catalog and display strategies of many online grocers, I have one question: Do consumers read while buying groceries?

Simple Tasks: Consumers tend to compare brands on quality, size, price & nutritional preferences before picking up an item. This generally takes 30 seconds to a minutes. The same experience is an impossible feat on most online stores. One can use search on some stores and cascading filters on subset to achieve something similar. Unfortunately lack of data or uniformity makes it still impossible to compare instantly.

Sizes & Assortments: Most online stores while working based on an existing store inventory still needs a product, size and assortment strategy. I generally believe wholesale clubs could soon be a thing of the past. Optimal sizes, reinforced with re-order incentives will be more effective for CX, warehouse efficiency, fulfillment efficiency and costs. As we start working our way around different aspects of the grocery buying, we have to focus on optimizing for CX before everything else.

Customer target: It’s murky out there. Decisions hinge on the simple task of figuring out the target customer and their needs.  With online grocery, economic strata isn’t a reliable marker. In laymans terms, you have customers switching from neighborhood stores, Aldi’s, Walmart, Costco or Wholefoods and not just one of them. In this context, consider an Amazon Prime Now using products & pricing from Wholefoods. And to make things murkier, consumer preferences and cooking patterns or lack thereof are making merchandising & personalization strategy complex.

Adoption deficit – Going beyond convenience.

While online grocers fix their experience deficit, they need to buck up on messaging. We could learn from other industries. One of the most adopted mobile solutions are from the banks. Banks leveraged every incremental innovation like fingerprint login, notifications, alerts, check deposits and most recently card lock protection to advertise beyond convenience. Considering that repeat purchases improves overall perception and creates habit, brands should focus on app marketing and influencing adoption.

Bottomline: There is a mixed field of competitors with different strengths. The likes of Amazon and FreshDirect have a leg up on experience, Kroger & Walmart have physical presence & institutional knowledge of grocery ecosystem. And it’s time to gear up for a decade of investments to usher in the age of Imagination!

Karuna Kathiresan

Author Karuna Kathiresan

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