The pandemic changed many things. One of the things that changed irrevocably is our shopping habits. The majority became familiarized with and got comfortable shopping for everything online. This trend even spilled over into grocery shopping and grocers have started studying e-commerce while planning their sales growth. Online grocery shopping has now become second-nature to most Americans.
Digital grocery shopping as we know it became commonplace and e-retailers saw their valuations climbing as more and more people took to it. It also increased competition in the marketplace, with vendors trying to retain and attract customers.
As grocers compete for customers’ attention, experts believe that the ultimate winner will be the one who can offer a service that stands out from the competition in terms of pricing, convenience, and affordability.
The Rise of Online Grocery Shopping
As consumer baskets grow, online grocers are busy experimenting with different formats and value propositions to keep the customer coming back for more. Case in point – Instacart’s “How Homemade is Made” Campaign. Dishes shown in the campaign were instantly shoppable with live QR codes that will take the shopper to the recipe on the Instacart app. The Shoppable Recipes campaign allowed food creators to link their TikTok videos to shopping carts.
Online grocery shopping underwent a transformation as retailers found creative ways to keep customers engaged and cooking.
However, as the effects of the pandemic wane, shoppers have started returning to supermarkets, and tightening budgets, courtesy food inflation, have people nitpicking their carts.
The sentiment was echoed by Matt Hopkins from Board International, a business intelligence firm. “For online grocery retailers we are looking at an ‘S-curve’ growth online; post-covid trading patterns are gravitating back to store on many product categories,” said Matt Hopkins, Global Retail Director at Board. “With inflation now shaping demand and resulting in less disposable income, however, retail is set to be ‘never normal’. We are essentially talking about a short-term pause for online growth, with most grocers continuing to invest and innovating with ecommerce offers as part of their overall growth strategy.”
Hopkins told the Food Institute that as online grocery shopping matures, retailers will have to come up with different models. Whether it is instant delivery or convenience or attractive discounts on sizable wares, grocers must keep reinventing themselves to stay relevant.
In the US, everyone from Walmart to Kroger’s offers home delivery and has spent the last year building up infrastructure and technology to support their grocery lines.
According to Statista, the online grocery customer base counts roughly 150 million shoppers, which is close to half the country’s population, and is expected to grow in the coming years.
As numbers hoot through the roof, it is no surprise that grocery shopping will be determined by data driven insights and studying consumer habits. Hopkins recommends investing in business analytics as competition heats up in the digital grocery space.
The Future of Digital Grocery Shopping
Brands like Instacart, Amazon Fresh, Whole Foods, and FreshDirect have already made a name for themselves in the online grocery space.
Most offer home deliveries, loyalty programs, and even manage to keep prices low.
One of the most successful online grocery shopping services, Instacart, even has plans to go public. The Instacart IPO, albeit delayed, has been on investors’ radar for its phenomenal growth, thanks to a solid business model. There are over 500,000 Instacart shoppers across the US and Canada.
Tech giant Amazon too has entered the race and set up multiple centers and offer convenient two-hour windows, along with Alexa’s assistance. Ask Alexa stations in Amazon Fresh stores will get them any help they need instantly.
As per a recent report by the Food Institute, companies must invest in intelligent planning practices and processes that are customer-centric, and use this data to chalk out growth strategies. With online grocery shopping picking up, e-retailers must be equipped to handle the accelerated pace of orders the industry is witnessing.
Healthy eating, subscriptions, and personalized shopping will be the three main trends that rule digital grocery shopping. And as paying customers become more discerning, brands will be required to analyze and rely on data to fix supply chain issues and cater to customer needs.
