Looking Ahead: Opportunities for Grocery E-commerce

Looking Ahead: Opportunities for Grocery E-commerce

The pandemic has led to a rapid evolution of the grocery e-commerce space. In the past, consumers would buy from online stores for convenience and flexibility. However, consumers are now shopping online for reasons of personal health and public safety.  Consumers who were once loyal to offline modes now form the first time buyers segment, prompting e-tailers to cater to this need.  In this article, we discuss how brands capture this new demand early on by building a strong online presence.

Amazon and Other Marketplaces for Driving Sales: Amazon is at the forefront of the rising demand in the grocery segment.  In India, the platform observed a 1.3x spike in page views and a 4x increase in “Add to Cart” during the lockdown, leading to a 2x boost in sales in the post-lockdown phase. For grocery players, the key areas to consider include:

  1. Channels of Distribution: To tap into this demand, grocery retailers must explore options such as AmazonFresh (invite-only basis), Amazon Pantry and Prime Now. These options allow a quicker distribution network with faster delivery times for customers. In India, there is an invite-only delivery option, Multi Seller Flex, which allows grocery retailers to sell low margin products at a cheaper cost while having the benefits of FBA.
  2. Inventory Requirements: You must ensure the quality and safety of the packaging along with specifications such as expiration, net weight and dietary claims pertaining to potential food allergens. In the case of perishable products, the shelf life of the product becomes critical for a timely delivery. 
  3. Pricing and Promotions: Since monthly expenses, including groceries, are planned in the first week of the month, sellers must focus on having competitive prices, deploying coupons, and implementing an aggressive ads strategy during this period. In India, the first seven days of every month are promoted by Amazon as Super Value Days, a period where grocery sellers go aggressive on discounts, deals, and paid ads. Additionally, increasing the average cart value through the ‘Subscribe and Save’ option is an effective way to grow your sales in the grocery category.  

Website Marketing for Driving Visibility and Maximising Profits: While marketplaces offer immense opportunities, having your own website can drive higher margins. It also allows you to have more control over consumer data and provides valuable insights so you can respond to evolving trends and behavior in real-time. Let’s look at the factors to consider while running an online grocery store:

  1. Organic Search: You must use highly relevant keywords in your website’s content so consumers find you seamlessly. Using terms such as fresh, natural and organic (as applicable)in titles are known to drive CTR. You can also create blogs which help users in their buying journey and are link-worthy from authoritative websites. For instance, partnering with a popular chef or food blogger will act as a vote of confidence amongst loyal followers in addition to helping your store rank higher on SERPs. Also, implementing a recipe schema, wherein the recipe page links to the product page can lead the consumer a step further in the conversion funnel. In case you supply to physical stores, add the store list and add local schema.
  2. Paid Traffic: Periodic remarketing ads are a great way to drive users to the website as grocery shopping follows a set pattern in most households. For first time users, deploying special coupons can help in incentivising them to make their first purchase. In the case of fresh produce, since the average selling price is relatively low in some cases, subscription models and brand awareness campaigns will have higher long term returns compared to product-driven ads. One more point special about the grocery segment is that the repeat order rate is quite high and you may, at times, make a little loss in acquiring a customer.
  3. Engagement: The next step after bringing in relevant traffic to the website is to improve the conversion process. Auto-complete searches and high-quality imagery play an important role here. To ensure continued interest in your products, provide key information such as nutritional facts, ingredients and product availability. Furthermore, high website speed can aid seamless user experience.
  4. Conversion: Frictionless checkout process and flexible payment modes can lead to quicker conversions. Build in shipping costs (including cash-on-delivery costs in case of Indian players) in the product price itself as an additional cost at the checkout stage may hamper conversions. For existing customers, we recommend offering discounts for customers buying bulk items during checkout and thereby increasing the average order value for non-perishable products. 

Social Media Reach for Reinforcing Brand Loyalty: Social media channels such as Twitter, Instagram, and Facebook drive consumers to your store and help make a strong brand presence by strengthening customer relationships. You can share recipes that include ingredients available at your grocery store and thus, drive visits. There will also be comments on your posts to complain or report an issue with your store. You can use this opportunity to address questions and concerns. One of the secret tools behind Whole Foods’ social media success is its rapid response to customers’ feedback on Twitter and Facebook. They respond to upwards of 100 users each day, thus kick-starting growing conversations around the brand.

Latest Technology for Enhanced User Experience: With over 60% of the cumulative e-commerce sales generated from mobile channels and a 73% boost expected in 2021 (according to Statista), PWA (progressive web apps) is becoming an intrinsic feature in the competitive marketing landscape. It gives users native app-like experience even with websites. The grocery and food segment is one of the best examples of repeat buyers and PWA has the highest impact on websites where repeat rate is high. Better speeds and higher conversion rate make PWA even more lucrative. Additionally, advanced features such as personalization, optimized search and upselling using machine learning and AI can exponentially improve the overall user experience if you are a large brand.

Apart from the aforementioned points, it is also crucial to overcome storage challenges for perishable grocery products. This can be done through well-equipped infrastructure, built-in inventory management API, and reliable mode of conveyance. All in all, e-tailers must take a more holistic approach while attempting to replicate an in-store experience online. To keep the first-time buyers loyal, it is eminent that grocers focus on every stage of the journey through organic as well as paid mediums. Prepare to craft new solutions for marketplaces and user-first technology for your website to gain market share and dominate the space as a grocery retailer.

Want help with establishing a strong online presence for your e-grocery store? Hit reply and let’s connect.

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