As things begin to reopen, people are going to start revenge spending by eating out, shopping and going places that have been shuttered for months. Spending during the past year went from eating out to staying in to now eating out again — but that doesn’t mean that online ordering from grocery stores is going anywhere anytime soon.
Food and beverage will be the fastest-growing online sales category during the next several years, with a compound annual growth rate of 30% over the period spanning 2019 through 2024, according to a recent report by Forrester. Additionally, more shoppers will be coming back to your store and will use online tools to help shop more efficiently
That said, it’s still much more economical and healthier for people to buy food from their local grocery store and cook it at home than it is to eat out — even if they're ordering online and having those items delivered at an additional cost. As a grocery store owner, you need to anticipate that 20% of your sales will be from online orders.
Similarly, online orders are simply larger — what we’ve seen is that basket sizes are typically three to four times what they are in-store. The goal here is to build a strategy around those facts and work in your own creative way to upsell on opportunities you discover along the way.
Looking ahead, grocers should envision a way that they can allow on-site and digital shopping for their grocery section, as well as a fully online version of their deli counters with options for touchless checkout. Grocers will need to understand the value of focusing on ways that they can offer their customers unique deals and the convenience of choosing shopping preferences tailored to their specific needs.
The first step to being able to offer personalized deals to your customers is to own your data. Simply put, there's no other way to succeed online if the data that flows from a customer’s device through to your point-of-sale (POS) system is owned by a third-party provider. Let me repeat: If you don't own your historical customer purchasing data, you are giving up your edge. Without control of your own customer purchasing data, it’s impossible to compete against big vendors like Amazon or Kroger.
Once you have ownership of your data, the next step is to begin analyzing POS and online purchasing patterns to begin integrating this data with your existing loyalty program (if you have one).
While third-party platforms were great for companies that needed to get online during the pandemic to survive, they have become costly for many food and beverage retailers. With such uncertainty clouding these high-fee delivery services, grocers need to pivot to a more realistic long-term solution.
Information is Power
You need a robust IOS or Android app that’s constantly upgraded if you want to create more engaging online and in-store experiences for your customers. Our data shows that most online orders are placed via mobile apps, which means that grocers should think about how customers will use their apps in stores as well.
When they’re thinking of buying a new product, customers will use a grocer's app to look up information and search for any digital-only discounts on offer. This is great news, because when your customers are on your app searching, you will know immediately that they are interested in a product, and can push a digital coupon or offer them a multiple-item discount on the item at checkout, just as Amazon and others do it.
Another way to do this is if a customer is buying a bunch of ingredients that go together, you can have your app recommend a recipe for the possible combinations. Are you picking up prosciutto? Do you want to try our store-brand provolone to go with that? Here’s a coupon.
Build Customer Satisfaction Both in Stores and Digitally
In-store physical devices that connect to the web — kiosks — are great for offering better customer service. McDonald’s has one of the best examples of this. Whenever I visit McDonald’s, there’s usually a line. However, while I’m in line, I can order from one of the in-store digital kiosks. Or, if I want to save even more time, I can use an app to order in the store from my phone instead of one of the physical devices. Kiosk ordering used to be tied to in-store systems, but now grocers can implement kiosk-style menus into an app, and the concept can be applied to grocery and deli shoppers.
Where to Start
There’s no "magic bullet" to instantly generate online sales. Grocers need to ensure an inventory of items that they want to sell online and have an integrated system in place to monitor stock, fill orders, and deliver them to their destination or pickup. The biggest thing that turns the customer off is when they order something online and it’s out of stock, so digital stock-keeping and integration with the app is an absolute must.
Once you get the basics right, you can then customize things for your customers. Your online store needs to sell to your clients, not someone else’s. Just because it works for a national chain doesn't mean it’ll work for you.
Everyone wants a "hack" or a quick fix, but it’s up to you to manage the digital experience that you have with your customers. Get the basics in place, and then be creative with your unique proposition. You have to experiment. You need to A/B test and be willing to experiment. Most importantly, you need a platform that allows you to do this easily and earnestly, and then lets you create your own answers. You need to do things differently to succeed, because that’s how you’ve gotten to where you are today.